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SR 02-27-2024 11B City Council Housing Authority Report City Council Meeting: February 27, 2024 Agenda Item: 11.B 1 of 27 To: Housing Authority, Mayor and City Council From: Oscar Santiago, Director, Finance Department, Budget Subject: Financial Status Update and FY 2023-24 Midyear Budget Recommended Action Staff recommends that the City Council and Housing Authority: 1. Appropriate FY 2023-24 midyear revenue and expenditure budget adjustments and approve corresponding adjustments to the FY 2024-25 budget plan. (Attachment A) Staff also recommends that the City Council: 1. Receive an update to the FY 2023-24 through FY 2027-28 Five Year Financial Forecast; 2. Adopt a Resolution establishing new classifications and adopting salary rates for various positions (Attachment B); 3. Approve the position and classification changes (Attachment C); 4. Adopt a Resolution abolishing unused and obsolete classifications and associated salary rates (Attachment D); 5. Authorize the City Manager to accept a grant award in the amount of $200,000 from the California Department of Aging’s Local Aging & Disability Action Planning (LADAP) Grant Program in support of strategic planning efforts to address the needs of older adults and people with disabilities, and to execute all necessary documents to accept the grant and all grant renewals; 6. Authorize the City Manager to accept a grant award in the amount of $135,000 from the U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) through the State of California, Governor’s Office of Emergency Services (CalOES) for the Office of Emergency Management in the City Manager’s Office, and to accept all grant renewals; and 7. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines. 11.B Packet Pg. 232 2 of 27 Summary The Midyear Budget Review is an important touchstone in the City’s monitoring of its economic recovery and is an opportunity to assess whether adopted budget projections are on track. The midyear outlook is positive, reflecting an economy that continues to recover. The current investments in our community, approved during the FY 2023-25 budget, have positioned us to maintain our progress towards addressing community needs, and revenues are projected to marginally exceed previously budgeted amounts. However, the City continues to navigate various challenges, ranging from economic uncertainty resulting from inflation and high interest rates, volatility of the insurance market and increased medical costs, consumer and work behavior changes, the need to address deferred infrastructure and equipment maintenance, and contingent liabilities from additional claims stemming from allegations of sexual abuse by a former employee and volunteer and over a request to transition to district elections. Therefore, while there are positive signals in the City’s revenue streams, the combined impact of these challenges limits the City’s ability to bring forward enhancements to programs and services beyond what was approved in the FY 2023-25 budget adopted last June. The February 2024 Five Year Forecast for all City funds includes the updated revenue and expenditure budget adjustments proposed in this report as FY 2023-25 Midyear adjustments, as well as updated revenue and expenditure projections going forward. In keeping with the momentum of the recovery, the General Fund Forecast shows a balanced budget on an annual basis for the current and next five fiscal years. This is made possible through the use of working capital reserves that supplement revenue growth in the short term. The majority of the non-General Funds will remain self- sufficient during the forecast period. The Midyear Budget Review provides an opportunity to adjust the current budget based on eight months of actual data. Budget adjustments are important, as they inform future year projections and assist staff in updating the five-year financial forecast and the budget targets for the FY 2024-25 budget plan. The revenue and expenditure adjustments are further detailed below. A complete list of all adjustments are included in Attachment A. 11.B Packet Pg. 233 3 of 27 Proposed budget adjustments for Fiscal Year 2023-25: Revenues (in millions) Fund FY 2023-24 FY 2024-25 General Fund $ 1.18 $ 6.40 Other Funds $ (0.16) $ (2.41) Total All Funds $ 1.02 $ 3.99 Expenditures (in millions) FY 2023-24 FY 2024-25 Fund Operating Capital Operating Capital General Fund $ 0.00 $ - $ 4.45 $ - Other Funds $ (0.21) $ 8.64 $ 3.14 $ 1.21 Total All Funds $ (0.21) $ 8.64 $ 7.59 $ 1.21 All proposed staffing adjustments, including additions and deletions of positions with net zero cost impact and those funded by the reallocation of funds within departments’ current budgets are detailed in Attachment C. The report also includes recommendations to adopt resolutions to establish new classifications and salary rates for various positions and to abolish unused and obsolete classifications and associated salary rates; and to approve the acceptance of grant awards from the California Department of Aging to support strategic planning to address the needs of older adults and people with disabilities and from the U.S. Department of Homeland Security FEMA to support the preparation of the City’s Local Hazardous Mitigation Plan. Background On June 27, 2023, the City Council adopted the FY 2023-25 Biennial Budget (Attachment E). The operating budget provides a plan, built upon community-driven priorities, to continue to rebuild, restore and reenergize our community through strategic investments informed by the five priority areas Council identified at its workshop on March 11, 2023. The investments were funded using new revenue sources coming 11.B Packet Pg. 234 4 of 27 from voter approved measures, public and private partnerships, rate adjustments, reallocated funding, working capital reserve funds, and successful grant applications. The FY 2023-24 Adopted Capital Improvement Program (CIP) Budget is focused on strategic investments in maintaining and enhancing critical City infrastructure and City facilities essential to providing services. The City’s audited financial statements as of June 30, 2023, published in the Annual Comprehensive Financial Report and posted on the City’s website in early February 2024, confirm that the City’s General Fund realized sufficient revenues in FY 2022-23 to 1) maintain its working capital reserve funds, which will help maintain service levels in the short term while revenues continue to recover and 2) enable us to increase the General Fund operating contingency reserve, which protects our ability to provide essential services during emergencies and economic fluctuations, by another 0.5% to $52 million. While this is a positive milestone towards rebuilding General Fund reserves, it is important to note that the City’s General Fund reserve level is still significantly lower than it was in pre-COVID years. As of June 30, 2023, General Fund total non-restricted reserves amount to approximately 50% of what they were as of June 30, 2019. Since 2020, demands on reserves have been impacted by a severe loss of revenues as a result of the pandemic (estimated at $170 million through June 30, 2023), and legal settlement payments related to allegations of sexual abuse by a former employee and volunteer. Of the total $229.8 million paid in legal settlements, $159.6 million was covered using General Fund reserves, while the remainder was covered by insurance funds and reserves from the City’s Housing Trust Fund, Water Fund and Workers Compensation Fund. Drawing on reserves and borrowing from other funds has limited the City’s ability to bring forward programs, services and capital projects that meet current council priorities and community and organizational needs. Discussion The national and State economies continued to recover in the fourth quarter of (calendar year) 2023. National economic growth as measured by Gross Domestic 11.B Packet Pg. 235 5 of 27 Product (GDP) grew over 4.8% and 3.3% in the third and fourth quarters of 2023, respectively. The deceleration in GDP in the fourth quarter was primarily due to slowdowns in federal government spending, residential investment, and consumer spending. Economists project that growth in the U.S. economy in 2024 and 2025 will be tempered (less than 2% annual GDP growth) as interest rates remain high and inflation rates slowly recede. It is projected that interest rates will remain relatively unchanged until mid to late 2024 when the Fed is expected to begin cutting. In December 2023, the UCLA Anderson Forecast indicated that the threat of eminent recession has faded, fueled by continued strength in the labor market; expansionary government policies; new national policy to encourage infrastructure, green energy and computer chip development in the U.S., which has pumped billions into the economy; and consumer spending, which remains strong. However, some economists still believe a recession could happen. Santa Monica’s economy continues to show recovery in consumer spending and the tourism sector. Property values in the City remain the third highest in Los Angeles County. As interest rates moderate or are reduced, it is projected there will be an increase in home sales and that prices, which are leveling off or declining, will rebound – thereby increasing assessed property values. This will have a positive impact on the City’s property tax and real estate transfer tax revenues. General Fund Five-Year Financial Forecast Update The February 2024 General Fund Five-Year Financial Forecast incorporates the revenues and expenditures budgeted for FY 2023-25, as revised with midyear budget adjustments. The Five-Year Financial Forecast shows the balance of General Fund revenues less expenditures on an annual basis for the next five fiscal years. The Forecast assumptions and results were updated from those presented in the March 11, 2023 Council Workshop (Attachment F). 11.B Packet Pg. 236 6 of 27 Notes: *includes the use of one-time working capital. Chart reflects Master Facilities Use agreement with SMMUSD expiring June 30, 2027. Forecast assumes that Measure YY/GS agreement with SMMUSD, which expires on June 30, 2028 is renewed. See discussion below. As shown in the chart above, with the help of working capital reserves, the General Fund maintains a balanced budget until FY 2027-28 when revenues are anticipated to exceed expenditures. Revenue Projections: The revenue forecast is informed by actual revenues generated in the first half of the year and updated assumptions based on economic trends and projections by hospitality industry, sales tax and property tax experts. These factors inform the midyear changes that are included in the forecast. On the revenue side, staff proposes adjustments to increase General Fund revenues by approximately $1.2 million and $6.4 million in FY 2023-24 and FY 2024-25, respectively, as compared to the original budget. While the FY 2024-25 change is a significant increase, it is primarily due to continued recovery in the tourism sector, which is impacting Transient Occupancy Tax revenues, and to increases in Business License Tax revenue from greater than projected gross receipts reported by businesses in FY 2023-24 and 11.B Packet Pg. 237 7 of 27 focused compliance efforts resulting from a dedicated business license inspector position. The additional midyear revenue allows the City to continue to have a balanced budget using essentially the same level of working capital reserves ($27.6 million), as in the 2023 forecast, to fill the gap between revenues and expenditures, while addressing midyear expenditure changes, cost increases throughout the forecast for items such as pension rates informed by recent portfolio earnings trends, healthcare rate increases due to inflation at an annual rate of 10%, significant increases to contributions towards property insurance and general liability/auto self-insurance, ongoing funding for the Police Department crime data center, and funding to implement and pay for the ongoing costs of a new permitting system. Staff projects that growth across all General Fund revenue streams will moderate to an average 3.7% for the remainder of the forecast. It is anticipated that General Fund revenues will not recover to the level projected prior to the pandemic until FY 2026-27. While the City has already experienced a loss of nearly $170 million since 2020, revenues will lag behind pre-pandemic projected growth by nearly $34 million more over the next five years, for a total revenue loss of approximately $204 million over 7 years, as shown in the chart below. 11.B Packet Pg. 238 8 of 27 Expenditure Projections: The Forecast has been updated to include projected cost of living increases; pension rates informed by recent portfolio earnings trends; healthcare rate increases due to inflation at an annual rate of 10%; significant increases to contributions towards property insurance and general liability/auto self insurance, based on an independent actuarial analysis of the fund, to ensure sufficient resources are available to cover claim expenses and increased excess insurance premiums; ongoing funding to cover the costs of the Police Department real time crime center once grant funding is exhausted; and funding to implement and pay for the ongoing costs of a new permitting system. Additionally, the General Fund forecast includes payments starting in FY 2027-28, to the Information Technology and Vehicle Management Funds to pay deferred internal service contributions that were suspended during the pandemic. These funds had to defer replacement schedules as a result of two years of suspended contributions. As a result of having to address these expenditure increases, the General Fund does not currently have sufficient funding available to restore programs and services above current levels. 11.B Packet Pg. 239 9 of 27 Use of Working Capital Reserves: The General Fund will require the use of $27.6 million in working capital reserves to fill budget deficits in fiscal years 2024-27. While the use of reserves to cover ongoing expenditures is not a sustainable financial practice, this is a short-term measure as staff expects revenue growth to moderate for the next few years. Funding was previously set aside as working capital reserves to support operations while revenues recover. Master Facilities Use Agreement with Santa Monica-Malibu School District: The City of Santa Monica and the Santa Monica-Malibu Unified School District (SMMUSD) have enjoyed a long-standing partnership in serving the Santa Monica community. This has resulted in a series of joint revenue measures and joint-use agreements between the City and school district. In 2012, the City and SMMUSD entered into a Master Facilities Use Agreement that provided the City with access to various SMMUSD facilities. This agreement was extended in 2022 and expires in 2027. In 2018, the City entered into the Measure YY/GS Master Facilities Agreement, which provided the City with access to additional SMMUSD facilities. The original term of the Measure YY/GS Master Facilities Agreement expires on June 30, 2028 and may be extended for an additional 10 years, subject to the approval of the governing bodies of both the City and SMMUSD. Unlike the Master Facilities Use Agreement, the resources transferred to SMMUSD pursuant to the Measure GS/YY Master Facilities Agreement result from advisory measures approved by the voters that specified that half of the City’s transaction and use tax revenues should be allocated to SMMUSD for various purposes. Finally, in 2022, the voters approved Measure GS, which requires that the City transfer the first $10 million in resources generated by this property transfer tax to SMMUSD. The chart below illustrates the resources transferred to SMMUSD under these various agreements from FY 2019-20 to FY 2024-25. 11.B Packet Pg. 240 10 of 27 Given that the Master Facilities Agreement expires within the five-year forecast period, the City’s forecast demonstrates the financial impacts to the City if the agreement expires and a scenario in which the agreement is perpetuated based on existing terms. If the Master Facilities Agreement expires in 2027, it is anticipated that the City will generate a surplus in FY 27-28 that is currently projected at $13.3 million, whereas if the agreement is extended pursuant to existing terms, the City would generate a mild surplus of about $500,000 in FY 27-28. Given that the Measure GS/YY Master Facilities Agreement results from voter approved initiatives, the forecast assumes that the agreement will be extended in 2028. Resources from the expiration of the Master Facilities Agreement could be deployed to restore critical City services, however, the impacts of potentially not having access to certain SMMUSD facilities will have to be evaluated. Contingency Reserves Gradually Restored: In FY 2023-24 the General Fund budget will be backed by a Rainy Day fund totaling 13.5% of ongoing expenditures. The Forecast assumes that the City will continue to rebuild its Rainy Day fund, reaching 15% of ongoing expenditures in FY 2026-27. Strong reserves are necessary to provide 11.B Packet Pg. 241 11 of 27 essential services and retain jobs during emergencies and economic fluctuations. They are also a signal of a City’s financial health and critical to maintaining the City’s AAA credit rating. Capital Improvement Program: Prior to the pandemic, the General Fund allocated $21 million a year to its Capital Improvement Program (CIP). This amount was reduced to $7.3 million in FY 2020-21. The Forecast shows funding restored to $21 million in FY 2025-26. Of the $21 million set aside for capital projects, the majority of it is budgeted for required ongoing maintenance, vehicle and technology replacement, safety-related repairs and debt service, leaving less than one-quarter of the funding available for community amenities and enhanced services. The reduction of the CIP over the last four years has resulted in deferred infrastructure, technology and vehicle maintenance replacement. In addition, over $358 million in citywide projects remain unfunded. More information on General Fund funded and unfunded projects is included in the CIP Addendum included in the Proposed FY 2023-25 Biennial Budget. Other Funds Financial Forecast Update Among the larger funds contributing to the City’s operations, the Water, Wastewater, Big Blue Bus (BBB), Airport, Resource Recovery and Recycling (RRR), Cemetery and Housing Authority Funds have sufficient revenue to cover operational and capital needs during the forecast period. The Pier and Beach Recreation Funds are projected to require General Fund assistance. Continued revenue constraints, including the partial closure of the Pier Deck parking, and pending plans to adjust beach parking rates, are significantly contributing to the situation. FY 2023-25 Midyear Revenue and Operating Expenditure Budget Adjustments Midyear budget adjustments are made to reflect updated revenue projections, and to facilitate continuity in key service areas, for the reasons noted below. 11.B Packet Pg. 242 12 of 27 Revenue Adjustments – General Fund: Staff projects General Fund revenues to reach approximately $436.1 million in FY 2023-24. This projection is based on actual data from July 2023 to February 2024 as well as anticipated changes in economic conditions and community behaviors over the remainder of the fiscal year. These projections require adjustments to increase FY 2023-24 Revised Budget revenue targets in the General Fund by approximately $1.2 million. A summary of the significant budget adjustments is shown below. Attachment A lists all revenue budget adjustments by department and fund. Sales Taxes Including GSH transaction and use tax Revenues are anticipated to be $0.7 million and $0.6 below budget in FY 2023-24 and FY 2024-25, respectively, primarily due to corrected allocations of Santa Monica’s share of the Countywide use-tax pools, the continued impact from the consumer shift from brick-and-mortar purchases toward online sales, and a shift in consumer spending away from tangible goods and towards services that are not subject to sales tax. Starting in FY 2025-26 revenues are projected to increase by a 3% average growth for the remainder of the forecast period. Transient Occupancy Tax (TOT) FY 2023-24 estimated revenues are about $0.2 million (0.3%) below budget, primarily due to the delayed reopening of the Regent Hotel and the impact of the hotel worker strikes. FY 2024-25 revenues are projected to increase by about $4.2 million (6.0%) over budget plan reflecting greater than projected TOT revenues from the delayed closure of the Fairmont Miramar for renovation and gradual recovery in the tourism sector. The forecast reflects stronger business, group and international travel growth starting mid-2024 and reaching peak 2019 levels by late 2025/early 2026 at annual increases ranging from 6 to 15%, as tourism recovers and as hotels that closed and will close for renovations reopen by the end of the forecast period. Parking Facility Taxes FY 2023-24 revenues are anticipated to be about $0.05 million (0.4%) below budget, 11.B Packet Pg. 243 13 of 27 reflecting changing behavior patterns of parkers, including the increased use of free 90-minute parking in the structures, prevalence of telecommuting and hybrid work schedules and use of alternative modes of transportation. FY 2024-25 revenues are expected to increase by about $0.21 million (1.9%) due to higher revenues from private parking facilities, offset by revenue loss at the Pier and the 1550 Lot during the Pier Bridge reconstruction project that will start in spring 2025 and last about two years. The forecast reflects moderate annual growth of 1.75%, reflective of changing behavior patterns of parkers. Staff is currently in the process of evaluating the potential to place a General Tax on the November 2024 ballot to increase the parking facility tax to reduce traffic congestion and the risk of traffic fatalities and serious injuries in Santa Monica, while preserving free 90-minute parking in the downtown lots. Property Taxes FY 2023-24 revenues are expected to be $1.5 million (1.8%) above budget, which is consistent with the 2% CPI adjustment applied per Proposition 13 this year and robust revenues derived from the former redevelopment project areas. FY 2024-25 revenues are expected to increase by $1.2 million (2.6%) following the same trend as FY 2023- 24. As interest rates moderate or are reduced, it is projected there will be an increase in homes sales and that prices, which are leveling off or declining will rebound - increasing assessed property values. This is reflected in the revenues over the forecast period, which are projected to increase in the range from 2.7% to 5%. Business License Tax Business license revenues are anticipated to be about $3.4 million and $2.7 million above FY 2023-24 and FY 2024-25 budget, primarily due to greater than projected gross receipts reported by businesses in FY 2023-24. This trend is anticipated to continue throughout the forecast. Additionally, another factor for the revenue increase are the focused compliance efforts by the Business License Inspector, a position that was added in FY 2022-23. It is projected that the increases will moderate between 0.3% and 2.2% annually during the forecast period. Staff is currently undertaking a 11.B Packet Pg. 244 14 of 27 major effort to modernize our business license tax program, which had not been significantly reviewed in over two decades. The impact of this project has not been included in the forecast. Parking FY 2023-24 revenues are approximately $0.2 million less than budget primarily reflecting a change in behavior patterns of parkers, including the increased use of free 90 minute parking in the structures, the prevalence of telecommuting and hybrid work schedules, and use of alternative modes of transportation by visitors to Santa Monica. FY 2024-25 revenues are expected to increase by about $0.8 million (2.3%) due to moderate economic growth and one-time revenues associated with Cirque du Soleil’s return to Santa Monica in the winter of 2024. The forecast reflects moderate annual growth of 1.75%, reflective of changing behavior patterns of parkers. Staff is currently in the process of conducting a citywide parking study, with recommendations expected back in late 2024 to inform potential parking rate changes that would be brought to the City Council and submitted to the California Coastal Commission in 2025. Fees/Charges/Other FY 2023-24 revenues are anticipated to be approximately $2.5 million below budget, primarily due to a later than projected receipt of the first supplemental payment (per Development Agreement) for the Miramar development project due to project delays, less than projected printing and passport services revenues and decreased revenues from commercial inspections by the Fire Department. FY 2024-25 is expected to be $1.0 million lower than budget plan, primarily due to an adjustment related to the Miramar development project. The budgeted amount for the Miramar project reflected annual additional supplemental payments of $3.6 million once the hotel closed for construction, however, due to project delays it is projected that the City will receive the first supplemental payment of $2.0 million instead. The decrease is partially mitigated by increased permitting fees due to the additional building inspectors to help expedite the permitting process. 11.B Packet Pg. 245 15 of 27 Revenue Adjustments – Other Funds: FY 2023-24 and FY 2024-25 revenue changes in the Other Funds result in decreases of approximately $0.2 million and $2.4 million, respectively. Significant revenue adjustments in other funds are summarized below. All revenue budget changes are detailed in Attachment A. • Big Blue Bus Fund – Decrease of approximately $1.9 million in FY 2023-24 and $2.3 million in FY 2024-25, reflects a deferral of anticipated capital revenue due to the rebidding of 7th street activation project and timing of procurement and acceptance of 15 battery electric buses. • Housing Authority Fund – Decrease of $0.7 million in FY 2023-24 and $0.8 million in FY 2024-25, primarily from lower voucher utilization of Emergency Housing Voucher (EHV) and Housing Choice Vouchers (HCV)/Section 8 HAP Vouchers due to the prolonged period of time it takes a voucher holder to successfully find and lease a unit. The decreases also reflect lower voucher utilization of Section 8 HAP vouchers due to a delay in the lease-up of 57 project- based units at 1413 Michigan Avenue. Decreases are partially offset by a disbursement from the U.S. Department of Housing and Urban Development (HUD) for retroactive reconciliation of administration fees. • Miscellaneous Grants Fund – Increase of approximately $1.8 million in FY 2023- 24 related to grant awards. The increase primarily reflects funding for the Douglas Park Playground Reconstruction project, funded through a combination of local funds and grant funds from the Los Angeles County Regional Park and Open Space District under the Los Angeles County 2016 Measure A grant program. Increases also include two new grants to support the needs of older adults and people with disabilities living in Santa Monica and for the preparation of the City’s Local Hazard Mitigation Plan. FY 2024-25 reflects a decrease of $0.7 million, primarily to correct the 2021 UASI Grant, which has been closed out but was inadvertently budgeted. 11.B Packet Pg. 246 16 of 27 • Resource Recovery and Recycling Fund – One-time increase of $0.6 million in FY 2023-24, reflecting security deposit forfeitures due to non-compliance by construction and demolition-related contractors. • Risk Management Administration Fund – Increases of $0.3 million in FY 2023-24 and $0.8 million in FY 2024-25, reflect increased payments from various funds for their share of property insurance costs based on the September 2023 actuarial analysis, to ensure the fund is sufficiently funded to cover increased insurance premiums. • Self-Insurance, Bus Fund – Increases of $0.3 million in FY 2023-24 and $1.0 million in FY 2024-25, reflecting the payment by the Big Blue Bus Fund based on an actuarial analysis conducted in September 2023 to ensure the self-insurance fund has sufficient funding to cover expenses. • Self-Insurance, Comprehensive Fund – Increases of $0.5 million in FY 2023-24 and $3.1 million in FY 2024-25, reflecting payments from various funds for their share of the City’s general liability costs based on the September 2023 actuarial analysis, to ensure the fund is sufficiently funded to cover claims and increased insurance premiums. • Vehicle Management Fund – Increase of approximately $4.5 million in FY 2023- 24 and $1.6 million in FY 2024-25, primarily reflecting a one-time contribution from the RRR Fund for the purchase of six new RRR vehicles and associated ongoing costs, as well as an expected increase in contributions from other funds as a result of increased costs, associated with cost of living increases, for delivering the services. • Water Fund – Decreases of approximately $4.9 million in FY 2023-24 and $5.0 million in FY 2024-25 reflecting decreased water sales resulting from water use reduction as mandated by the City’s Water Conservation Ordinance, partially offset by an uptick in large development permits and the associated development fees. 11.B Packet Pg. 247 17 of 27 Operating Budget – General Fund – Expenditure Adjustments: Staff proposes General Fund operating expenditure adjustments that result in an approximate $1,848 increase to the General Fund budget in FY 2023-24 and a $4.5 million increase in FY 2024-25. The net increases to the General Fund expenditures are projected to be offset primarily by greater than projected tax revenues, described earlier in this report, as well as new field permit and building permitting fee revenue. While Attachment A details all expenditure adjustments, highlights are noted below. • $2.6 million increase in FY 2024-25, reflecting increased payment to the Self- Insurance, General Liability and Auto Fund for the General Fund’s share of the City’s general liability costs based on the September 2023 actuarial analysis, to ensure the self-insurance fund is sufficiently funded to cover claims and increased insurance premiums. • $0.4 million increase in FY 2024-25 reflecting increased payments to the Self- Insurance, Risk Management Fund for the General Fund’s share of property insurance costs based on the September 2023 actuarial analysis, to ensure the self-insurance fund is sufficiently funded to cover increased insurance premiums. • One-time increase of $36,000 in City Council Discretionary funds and $14,000 for travel expenses ($2,000 to the Mayor, Vice Mayor, and each Councilmember), funded by staffing adjustments in the City Manager Office and the reallocation of funding in Non-Departmental from an item that is no longer needed, but inadvertently budgeted. Council travel and discretionary funds will be discussed later in this report. • One-time cost of $93,125 to retain the consulting firm of Fetterman Dunn to undertake the necessary research, estimate staff and legal resources needed, and prepare a conceptual Tenant Protections and Right to Counsel program for Council consideration in Summer 2024. This item is funded by the Housing Trust Fund. • One-time cost of $95,500 to purchase a Below Market Housing (BMH) software enhancement to the current online portal, which will create a more efficient and streamlined customer service experience for affordable housing waitlist 11.B Packet Pg. 248 18 of 27 applicants, housing providers, and staff. This item is funded by the Housing Trust Fund. • The addition of 1.0 FTE limited-term Project Support Assistant in the General Fund to support the Airport Conversion project, funded by the Airport Fund. • Appropriation of $302,752 in FY 2024-25 for 2.0 FTE Building Inspectors to improve permit processing time. The positions are funded by one-time department savings from reduced overtime and professional services expenditures in FY 2023-24 and additional Building and Safety revenues starting FY 2024-25. • Appropriation of $28,098 in FY 2023-24 and $70,965 in FY 2024-25 for 1.0 FTE Guest Services Assistant to improve customer service for Community Recreation facilities, including the issuance of outdoor sports facility permits. The position is funded by increased field permit revenues. • Reduction of $26,250 in FY 2023-24 and $102,750 in FY 2024-25 related to GSH related allocations to Santa Monica Malibu School District and the Affordable Housing Trust Fund, as a result of reduced Transaction and Use Tax revenues. • One-time $1,170,000 adjustment to the City’s pension contribution related to the unfunded liability in FY 2024-25. The new amount is based on the revised valuation reports provided by CalPERS. Operating Budget – Other Funds – Expenditure Adjustments: Staff proposes operating expenditure adjustments in the Other Funds, that result in an approximate $0.2 million decrease and $3.1 million increase, in FY 2023-24 and FY 2024-25, respectively. Attachment A details all expenditure adjustments. Significant increases are summarized below: • $0.5 million and $0.5 million increases in FY 2023-24 and FY 2024-25, respectively, reflecting increased payments from various funds to the Self- Insurance, General Liability and Auto Fund for their share of the City’s general 11.B Packet Pg. 249 19 of 27 liability costs based on the September 2023 actuarial analysis, to ensure the fund is sufficiently funded to cover claims and increased insurance premiums. • $0.3 million and $0.4 million increases in FY 2023-24 and FY 2024-25, respectively, reflect increased payments from various funds to the Self- Insurance, Risk Management Fund for their share of property insurance costs based on the September 2023 actuarial analysis, to ensure the fund is sufficiently funded to cover increased insurance premiums. • $0.3 million and $1.0 million increases in FY 2023-24 and FY 2024-25, respectively, reflect increased payments from the Big Blue Bus Fund to the Self- Insurance, General Liability and Auto Fund based on the September 2023 actuarial analysis, to ensure the fund is sufficiently funded to cover claims and increased insurance premiums. • A transaction to transfer funds in FY 2023-24 from the operating budget to the capital improvement budget as follows: $522,327 in the Miscellaneous Grants Fund and $67,673 of Transportation Impact Funds from the Special Revenue Source Fund, for the Santa Monica Boulevard Safety Enhancement study resulting in net zero impacts to each fund. • $0.4 million increase in FY 2024-25 in the Resource Recovery & Recycling Fund, reflects payment to the Vehicle Management Fund, and the corresponding $0.4 million appropriation in the Vehicle Management, to pay for the ongoing maintenance of six new vehicles. • A decrease of $1.7 million in FY 2023-24 and $0.3 million in FY 2024-25 in the Housing Authority Fund, representing lower Housing Assistance Payment (HAP) voucher utilization primarily due to a delay in the lease-up of 57 project based units at 1413 Michigan Avenue as well as lower voucher utilization due to a longer lease-up period on the Emergency Housing Voucher and Serial Inebriate Programs. Staffing Adjustments – All Funds: The combined midyear staffing adjustments in all funds result in a net increase of 9.3 permanent FTE positions (7.3 in the General Fund) 11.B Packet Pg. 250 20 of 27 partially offset by deletion of 8.0 FTE temporary positions in the General Fund. The changes are summarized below and detailed in Attachment C. Unless otherwise noted, any changes that would result in a fiscal impact will be offset by the reallocation of budgeted funds within departments’ budgets, resulting in a net zero impact to FY 2023- 25 budget. Attachment B is the Salary Resolution detailing new classifications and salary rates. The City Manager’s Office is proposing changes to realign resources to focus on the City’s 911 dispatch center’s Computer Aided Dispatch (CAD) software, ensuring round-the-clock functionality and connection of CAD with the City’s integrated public safety systems, as well as to centralize supervision of the City’s video production staffing and resources. These changes result in no new FTE. The City Attorney’s Office is proposing a change to better align a position with the duties performed. The cost of the increase will be absorbed within the department’s existing budget. This change results in no new FTE. The Community Development Department proposes the addition of 2.0 FTE Combination Building Inspectors in the General Fund to create greater capacity to perform inspections, thereby ensuring compliance with the City’s building regulations, reducing permit processing time, and improving the City’s permitting process. As discussed in the expenditure changes section, the positions will be funded by one-time department savings from reduced overtime and professional services expenditures in FY 2023-24 and additional Building and Safety revenues starting FY 2024-25. This change results in 2.0 new permanent FTEs. The Finance Department is proposing several changes to help create career progression opportunities, align positions with duties performed and improve staff recruitment and retention. These changes result in no new FTE. The Human Resources Department is proposing changes to better align resources to the department’s current priorities managing the day-to-day administration of the 11.B Packet Pg. 251 21 of 27 department. The changes will enable HR to be better positioned to support employee and organizational development, including refocused efforts on citywide staff training. These changes result in no new FTE. The Information Services Department proposes the net addition of 1.0 FTE in the General Fund. Leveraging the recent vacancy of a management position, the department is proposing to add a GIS Technician to better support GIS Services including the implementation of the technology, video systems and development of the GIS layers required for the new Real Time Crime Center, and to add a Business Process Technology Analyst to provide focused support for the new Permitting and Land Management system. The Department is also proposing some changes to ensure we safeguard the city from the increasing threats to our digital environment and improve our long-term resilience as well as create opportunities for inter- operational support, rather that siloed functions. These changes result in 1.0 new permanent FTE. The Library is proposing a change to address the growing needs of the Library’s Literacy Education for Adults and Families (LEAF) program, which is being expanded to include enhanced English as a Second Language (ESL) services. LEAF comprises seven flagship services and a variety of outreach events offering free literacy services to all ages. This change results in no new FTE. The Public Works Department proposes the addition of 1.0 FTE limited-term Project Support Assistant in the General Fund to address the current backlog of maintenance and construction projects at the Airport and will be funded by the Airport Fund. In addition, the Department proposes the addition of 2.0 FTE positions in the Vehicle Management Fund to improve preventative maintenance required for the safety of City staff, reduce downtime of vehicles and lessen disruption to City operations, and ensure compliance with State and Federal regulations. These changes result in 1.0 new limited-term FTE in the General Fund, funded by the Airport Fund and 2.0 new permanent FTE in the Vehicle Management Fund. 11.B Packet Pg. 252 22 of 27 The Recreation & Arts Department proposes the net addition of 3.3 permanent FTE, offset by the deletion of 8.0 FTE temporary positions and additional revenues, to activate the Miles Playhouse and Camera Obscura facility and expand arts and culture programming throughout the City, enhance access to park facilities for community use, and to improve customer service for Community Recreation facilities including the issuance of outdoor sports facility permits. The cost of the added positions will be offset by additional field permit revenues and by repurposing existing staff resources within the department. These changes result in 3.3 new permanent FTE and a reduction of 8.0 temporary FTE. The Department of Transportation is proposing a change to centralize the financial and administrative tasks for the Mobility division, which has not had a permanent, budgeted analyst since the budget restructuring process in 2020. The change will provide critical oversight of all Mobility grants, fees, contracts, financial reporting, and budget development. It will also allow the department’s Transportation Planners to focus on their core functions advancing city priority projects, including capital projects that protect the safety of all roadway users and advance equity by lowering household transportation costs, as well as regional transportation coordination, particularly as the city prepares for major events including the World Cup and LA28 Olympics. This change results in no new FTE. Resolution to delete obsolete position classifications As part of its efforts to maintain the City’s classification plan, the Human Resources Department recently conducted a review of the classification plan to determine which classifications were no longer being used and for which there is no foreseeable need. Human Resources Department staff, after consultation with the relevant City leadership, has determined that the identified classifications presented in the attached resolution (Attachment D) are obsolete and may be removed from the classification plan. Therefore, Human Resources Department staff recommend these classifications and associated salary rates be abolished. 11.B Packet Pg. 253 23 of 27 Capital Improvement Program (CIP) Budget Adjustments Recommended changes to the FY 2023-24 CIP budget include a net budget increase of approximately $8.6 million and $1.2 million in FY 2024-25. The budget changes are detailed in Attachment A and summarized below. Non-General Funds – Capital Budget: Vehicle Replacement Program – changes include $4.0 million in the Vehicle Management Fund to pay for the purchase of six (6) new vehicles, including 2 new bulky item collection vehicles. This increased cost in the Vehicle Management Fund is offset by a corresponding $4.0 million reimbursement, as an internal service contribution, from the Resource Recovery and Recycling Fund. Santa Monica Boulevard Safety Enhancement Study – increase of $590,000 funded by grant funds in the amount of $522,327 from CalTrans and a required local match of $67,673 from Transportation Impact Fee funds. The Santa Monica Boulevard Safety Enhancement Study was approved by Council on November 14, 2023. Staff requests that funds be moved to the Capital Improvement Program. Grant Related Changes Acceptance of Grant Awards California Department of Aging – Local Aging & Disability Action Planning (LADAP) Grant: On November 13, 2023 the City of Santa Monica was awarded a $200,000 grant through the competitive, statewide Local Aging & Disability Action Planning (LADAP) Grant Program. The local age-and disability-friendly plans developed through this opportunity are aimed at improving a community’s livability for people of all ages, centering on equity, cultural competency, community engagement, and disability inclusion principles and practices. Staff recommends that Council authorize the City Manager to accept the LADAP award so that staff may proceed with development of a strategic plan to address the needs of older adults and people with disabilities living in Santa Monica. If authorized, the Human Services Division (HSD) will begin planning activities in Q1 2024, including the release of a Request for Proposals (RFP) to identify a subject-matter expert to help lead the planning process 11.B Packet Pg. 254 24 of 27 alongside City staff, non-profit partners, Commissions, and key stakeholders. HSD plans to return to Council in Q1/Q2 2024 with an RFP award recommendation. U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP): The U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) through the State of California, Governor’s Office of Emergency Services (CalOES) awarded the Office of Emergency Management a $135,000 grant to support the preparations of the Local Hazard Mitigation Plan. Staff recommends that Council authorize the City Manager to accept the FEMA grant so that funds can be utilized to conduct a social vulnerability analysis that builds upon the City’s Local Hazard Mitigation Plan. A consultant would identify and assess the City’s social vulnerabilities in relationship to local natural hazards, focusing on the Pico Neighborhood, Census Tract 7018.10. The consultant would also present constructive recommendations on community-based, equity-focused mitigation measures may improve community resiliency. The analysis and plan would be conducted with a heavy emphasis on community engagement, including consensus- building events to better educate community members on local hazards and collect feedback on community-driven priorities. The findings and final plan would be provided in an accessible format for community members and create a distribution strategy to better prepare Santa Monica residents. Additional Grant Funding California Office of Traffic Safety for the 2023 STEP (Selective Traffic Enforcement Program) Grant: The Santa Monica Police Department (SMPD) was previously awarded a $306,000 Selective Traffic Enforcement Program (2023 STEP) grant from the California Office of Traffic Safety (OTS) for a year-long program of education and special enforcement efforts to help prevent traffic-related deaths and injuries. SMPD was recently awarded an additional award amount of $31,600. California State Library Zip Books Project: In FY 2022-23, the California State Library awarded the Library a grant of $2,690 from California Library Services Act 11.B Packet Pg. 255 25 of 27 funds to purchase books that are not available at local libraries (“Zip Books Project”.) The California State Library recently awarded the Library additional funding of $2,787 for the Zip Books Project for FY 2023-24. Council Discretionary Funds: Included in the FY 2023-24 midyear adjustments is a one- time appropriation of $36,000 to Council discretionary funds. With this change, the amount unprogrammed for FY 2023-24 will be $80,681. The annual appropriation of Council discretionary funds occurs once a year at budget adoption and is adjusted annually for cost of living. The FY 2023-24 Adopted Budget amount was $125,150. On June 27, 2023, Council directed staff to reappropriate unspent FY 2022-23 individual Councilmember travel budgets at the end of the year to the FY 2023-24 Council budget, to supplement existing Council discretionary funds. The reappropriated amount was $9,762. As of February 8, 2024, Councilmembers have collectively spent 35% of the $59,486 in their individual travel funds, and there are remaining funds of $38,601. Staff recommends permanently adopting the practice of reappropriating unspent travel funds to supplement existing Council Discretionary fund allocation. Past Council Actions Meeting Date Description 06/27/2023 (Attachment E) Adoption of the First Year and Approval of the Second Year of the FY 2023-25 Biennial Budget Adoption Environmental Review The FY 2023-24 Midyear Budget is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The Midyear Budget is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA. 11.B Packet Pg. 256 26 of 27 Financial Impacts and Budget Actions Recommended FY 2023-24 midyear budget adjustments, and related FY 2024-25 adjustments, result in: • Revenues: FY 2023-24 and FY 2024-25 citywide increases of approximately $1.02 million and $3.99 million respectively In millions FY 2023-24 FY 2024-25 General Fund $ 1.18 $ 6.40 Other Funds $ (0.16) $ (2.41) Total All Funds $ 1.02 $ 3.99 • Expenditures: FY 2023-24 and FY 2024-25 citywide increases of approximately $8.43 million and $8.80 million respectively In millions Operating FY 2023-24 FY 2024-25 General Fund $ 0.00 $ 4.45 Other Funds $ (0.21) $ 3.14 Total All Funds $ (0.21) $ 7.59 In millions Capital FY 2023-24 FY 2024-25 General Fund $ - $ - Other Funds $ 8.64 $ 1.21 Total All Funds $ 8.64 $ 1.21 • FTEs: The combined midyear staffing adjustments in all funds result in a total net increase of 1.3 FTEs. Permanent Temporary General Fund 7.3 (8.0) Other Funds 2.0 0.0 11.B Packet Pg. 257 27 of 27 Total All Funds 9.3 (8.0) Details of FY 2023-24 and FY 2024-25 budget adjustments are in Attachment A. Prepared By: Jennifer Young, Budget Manager Approved Forwarded to Council Attachments: A. Attachment A - Budget Adjustments B. Attachment B - Salary Resolution C. Attachment C - Position and Classification Changes D. Attachment D - Abolishment Resolution E. Attachment E - June 27, 2023 Staff Report – FY 2023-25 Budget Adoption (Web Link) F. Attachment F - March 11, 2023 Staff Report – Council Workshop (Web Link) G. Written Comments H. PowerPoint Presentation 11.B Packet Pg. 258 ATTACHMENT A Adopted Budget Year to Date Approved Appropriations (A) Midyear Appropriations Revised Budget after Midyear Approved Budget Plan Year to Date Approved Adjustments Midyear Adjustments Revised Budget Plan after Midyear General Fund 438.69 (3.76) 1.18 436.11 451.90 0.40 6.40 458.70 All Other Funds 396.26 35.87 (0.16) 431.96 418.72 0.09 (2.41) 416.40 Total 834.95 32.10 1.02 868.07 870.62 0.49 3.99 875.10 Adopted Budget Year to Date Approved Appropriations (A) Midyear Appropriations Revised Budget after Midyear Approved Budget Plan Year to Date Approved Adjustments Midyear Adjustments Revised Budget Plan after Midyear General Fund 423.37 1.19 0.00 424.57 443.63 0.40 4.45 448.48 All Other Funds 288.82 8.11 (0.21) 296.72 296.35 0.15 3.14 299.65 Total 712.19 9.31 (0.21) 721.29 739.98 0.55 7.59 748.12 Adopted Budget Year to Date Approved Appropriations (A) Midyear Appropriations Revised Budget after Midyear Approved Budget Plan Year to Date Approved Adjustments Midyear Adjustments Revised Budget Plan after Midyear General Fund 13.50 - - 13.50 14.99 - - 14.99 All Other Funds 103.36 1.33 8.64 113.33 83.75 - 1.21 84.96 Total 116.87 1.33 8.64 126.84 98.74 - 1.21 99.95 SUMMARY OF CHANGES TO FY 2023-25 ADOPTED BIENNIAL BUDGET A Reflects year-to-date budget appropriations approved by Council on 7/18/23 (items 5-B and 5-G), 8/22/23 (item 5-H), 9/26/23 (item 5-C), 10/24/23 (items 5-E, 5-I, and 11-A ), 11/14/23 (item 5-C). FY 2023-24 FY 2024-25 Revenues (in millions) Capital Expenditures (in millions) Operating Expenditures (in millions) FY 2023-24 FY 2024-25 FY 2023-24 FY 2024-25 Page A-1 of 14 11.B.a Packet Pg. 259 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) General Fund Non-Departmental Represents reductions in Sales and Transaction and Use Taxes (TUT) primarily due to corrected allocations of Santa Monica’s share of the Countywide use-tax pools, the continued impact from the consumer shift from brick- and-mortar purchases toward online sales, and a shift in consumer spending away from tangible goods and towards services that are not subject to sales tax. $ (677,829) $ (623,744) General Fund Non-Departmental Represents a reduction in Transient Occupancy Tax (TOT) primarily due to the delayed reopening of the Regent Hotel and the impact of the hotel worker strikes. FY 2024-25 increase reflects greater than projected TOT revenues from the delayed closure of the Fairmont Miramar for renovation and gradual recovery in the tourism sector. $ (201,105) $ 4,209,734 General Fund Non-Departmental Represents a reduction in Parking Facility Tax reflecting changing behavior patterns of parkers, including the prevalence of telecommuting and hybrid work schedules and use of alternative modes of transportation by visitors to Santa Monica. $ (45,000) $ (110,000) General Fund Non-Departmental Represents an increase in Property Taxes to align with Proposition 13's CPI adjustment and robust revenues derived from the former redevelopment project areas. $ 1,489,546 $ 1,198,764 General Fund Non-Departmental Increased Business License Tax revenue represents greater than projected gross receipts reported by businesses in FY 2023-24. This trend is anticipated to continue throughout the forecast. Additionally, the revenue increase is also attributed to the focused compliance efforts by the Business License Inspector, a position that was added in FY 2022-23. $ 3,380,500 $ 2,649,200 General Fund Transportation Represents changing behavior of parkers, including the increased use of free 90 minute parking in the structures, prevalence of telecommuting and hybrid work schedules and use of alternative modes of transportation by visitors to Santa Monica. $ (195,000) $ (70,000) General Fund Non-Departmental Decrease is primarily due to delay in the first supplemental payment of $2.0 million from the Miramar Project. Per the terms of the Developer Agreement, the first supplemental payment was to be issued with filing of the plan check application for the project’s first building permit. Due to project delays, the initial payment is now projected to be received in FY 2024-25 with the additional supplemental payments projected for future years. $ (2,000,000) $ (1,600,000) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS Page A-2 of 14 11.B.a Packet Pg. 260 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS General Fund Records and Election Services Represents a one-time revenue reduction based on actuals to date for printing and passport services. The Passport Agent position remained vacant for the first half of FY 2023-24. $ (169,700) General Fund Library Represents an increase in room rental revenue due to the expansion in service hours at the library. $ 6,000 $ 8,000 General Fund Police Primarily represents an increase in auto impound fees due to increasing visitors to the City and normalization of staffing levels. $ 133,150 $ 193,150 General Fund Fire The reduction represents a revenue shortfall in commercial inspection fees due to staffing vacancies in the Fire Prevention division. The division is now fully staffed. $ (300,000) General Fund Finance Represents a one-time increase in State claims revenues due to receipt of prior year reimbursements. $ 2,401 General Fund Housing and Human Services Represents revised projections based on higher childcare program participation (13% increase) and reduced need for financial assistance where 62% of families are paying full fee. $ 57,102 $ 42,676 General Fund Recreation and Arts Represents higher than expected demand for park building rentals, as well as additional field permit revenues offsetting the cost of permanent staffing. $ 103,098 $ 145,965 General Fund Public Works Represents the removal of 56 utility pole lease sites that are no longer needed due to the T-Mobile and Sprint merger. $ (49,050) $ (50,500) General Fund Transportation Represents increased contributions from the Beach and Pier funds to support the growing costs of parking operations due to increased usage of the Beach and Pier lots. $ 200,000 $ 200,000 General Fund Transportation Represents a decrease in traffic control fee revenue primarily due to Southern California Edison and telecom companies finalizing major infrastructure enhancements in the city, potentially leading to a reduction in utility work requiring Temporary Traffic Control Plans $ (180,422) $ (180,422) General Fund Community Development Represents an increase in building fees offsetting the cost to add 2.0 FTE building inspectors to address permitting demand. $ 302,752 General Fund Community Development Represents a one-time shift in timing of receipt of condominium tax revenue due to the postponement of major condominium projects as a result of the updated Housing Element. $ (106,000) $ 182,000 Page A-3 of 14 11.B.a Packet Pg. 261 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS General Fund Community Development Represents one-time decreases in enforcement revenue due to staff vacancies. $ (116,092) General Fund Community Development Represents a decrease in plan check and seismic fee revenue due the postponement of projects due to interest rates and uncertain economy. $ (152,375) $ (100,000) Total General Fund Revenue Changes $ 1,179,224 $ 6,397,575 FY 2023-24 FY 2024-25 Community Development $ (374,467) $ 384,752 Finance $ 2,401 $ - Fire $ (300,000) $ - Housing and Human Services $ 57,102 $ 42,676 Library $ 6,000 $ 8,000 Police $ 133,150 $ 193,150 Public Works $ (49,050) $ (50,500) Records and Election Services $ (169,700) $ - Recreation and Arts $ 103,098 $ 145,965 Transportation $ (175,422) $ (50,422) Non-Departmental $ 1,946,112 $ 5,723,954 $ 1,179,224 $ 6,397,575 Funding Source Department(s)Description FY 2023-24 FY 2024-25 General Fund Revenue Changes by Department Grand Total General Fund Revenue Changes Page A-4 of 14 11.B.a Packet Pg. 262 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS Airport Fund Public Works Represents greater hangar vacancies than originally anticipated and early lease terminations. $ (250,000) Airport Fund Public Works Represents higher than anticipated demand for events scheduled at Barker Hangar and other venues at the Airport. $ 40,000 $ 40,000 Airport Fund Public Works Represents a reduction in filming revenues due to industry strikes in FY 2023-24. $ (4,000) Airport Fund Public Works Represents one-time collection of three large violation fees. $ 4,000 Airport Fund Public Works Represents an increase in revenue to reflect a minimum annual property management fee of $65,000 under a new agreement with Santa Monica College. $ 18,815 $ 17,429 Airport Fund Public Works Represents a reduction in retail/office rental revenues due to unexpected lease vacancies and the exercise by Santa Monica College of its option to expand its leasehold on non-aviation land further reducing retail/office space at the Airport. $ (205,000) $ (112,400) Beach Fund Community Development Represents a one-time decrease in Filming permits due to less demand resulting from the SAG and WGA strikes. Revenues are expected to return to normal in FY 2024- 25. $ (50,000) Big Blue Bus Fund Transportation Represents updated funding from Measure R capital grants. $ 14,610 Big Blue Bus Fund Transportation Represents capital revenue to be used as local match for bus procurement, which will be received in a year later than projected - in FY25/26 due to timing of receipt and acceptance of buses. $ (2,367,267) Big Blue Bus Fund Transportation Represents deferral of anticipated capital revenue associated with the 7th street activation project. The project has been delayed as a result of unsuccessful bids for the project scope of work. Revenues will not be received until project expenses are incurred when the project moves forward. The timing of the project is unknown at this time. $ (1,965,868) Big Blue Bus Fund Transportation Represents increase in revenue associated with Low Carbon Fuel Standard credits (LCFS) for fleet conversion to battery-electric buses (BEB). Pending the availability of funds, revenue is expected to increase overtime as fleet transitions to 100% BEB. $ 60,000 $ 60,000 Citizens' Option for Public Safety (COPS) Fund Police Dept Represents increases of actual Citizens' Option for Public Safety (COPS) revenues received from State of CA. $ 15,000 $ 15,000 Gas Tax Fund Public Works Represents recently released Department of Finance's allocations of Local Streets and Roads (LSR) funds to cities and counties through the Highway Users Tax Account (HUTA) and the Road Maintenance and Rehabilitation Account (RMRA). $ (183,147) Housing Authority Fund Housing and Human Services Represents disbursement from HUD for retroactively reconciled Admin Fees as well as higher than projected increase in Admin Fee rates. $ 298,254 $ 217,669 Housing Authority Fund Housing and Human Services Represents lower voucher utilization and a reduction in housing assistance payments due to a longer lease-up period. $ (1,047,373) $ (1,057,297) Page A-5 of 14 11.B.a Packet Pg. 263 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS Miscellaneous Grants Fund City Manager Represents the award of a new grant from the U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) through the State of California, Governor’s Office of Emergency Services (CalOES) to support the preparation of the Local Hazard Mitigation Plan. $ 135,000 $ - Miscellaneous Grants Fund Housing and Human Services Represents funds not being committed to City's Human Services Grants Program (HSGP) for FY 2023-24 and beyond. Housing Authority will repurpose funds for another use. $ (14,121) $ (21,672) Miscellaneous Grants Fund Housing and Human Services Represents the loss in subsidies from the State of California when it deemed that neither the PAL nor the VAP Summer Food Service Program sites met the definition of being low-income in 2023 based on census data. The PAL and VAP sites will reapply in 2024. $ (10,000) Miscellaneous Grants Fund Housing and Human Services Represents a correction to transfer revenues between Funds. The revenue for the Childcare Linkage Fee is being moved from the Miscellaneous Grants Fund to the Special Source Revenue Fund. $ (35,000) $ (35,000) Miscellaneous Grants Fund Housing and Human Services Represents the acceptance of a new Local Aging and Disability Action Planning (LADAP) Grant to retain a consultant to develop a strategic plan that will address the needs of older adults and people with disabilities living in Santa Monica. $ 200,000 Miscellaneous Grants Fund Information Services Represents a cleanup item to eliminate budget from FY 2024-25, as no additional funding is expected for the Urban Area Security Initiative (UASI) 2021 grant cycle. $ (692,153) Miscellaneous Grants Fund Library Represents an increase to the award amount for the new California Library Literacy Services (CLLS) grant to provide enhanced English as a Second Language (ESL) services. $ 15,500 Miscellaneous Grants Fund Police Dept Represents a cleanup item to correct remaining available funds from the Urban Area Security Initiative (UASI) 2020 grant cycle and the California Office of Traffic Safety for the Selective Traffic Enforcement Program (STEP) 2021 grant cycle. $ 30,873 Miscellaneous Grants Fund Police Dept Represents the additional award amount from the California Office of Traffic Safety for the 2023 STEP (Selective Traffic Enforcement Program) Grant for education and special enforcement efforts to help prevent traffic-related deaths and injuries. $ 31,600 Miscellaneous Grants Fund Public Works Represents the award of a new grant from the Los Angeles County Regional Park and Open Space District under the Los Angeles County 2016 Measure A grant program, which will finance the Douglas Park Playground Reconstruction project. $ 1,443,700 Pier Fund Community Development Represents an increase in outdoor dining revenue due to retroactive payments of amounts due and revenue from new licenses. $ 30,000 $ 30,000 Page A-6 of 14 11.B.a Packet Pg. 264 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS Resource Recovery & Recycling Fund Public Works Represents revenue from performance security deposit forfeitures as a result of non-compliance by construction and demolition-related contractors. $ 600,000 Risk Management Administration Finance Represents increased payments from other funds for property insurance due to higher renewal premiums than what was originally anticipated by the City's broker due to California's natural disasters, such as wildfires and hurricanes, and carriers leaving the market altogether. $ 312,526 $ 800,402 Self Insurance, Bus Fund Non-Departmental Represents increased payment from Big Blue Bus fund based on the September 2023 actuarial analysis completed by an independent actuary to ensure self- insurance fund has sufficient funding to cover expenses. $ 300,000 $ 1,000,000 Self Insurance, Comprehensive Fund Non-Departmental Represents increased payments from other funds based on the September 2023 actuarial analysis completed by an independent actuary to ensure self-insurance fund has sufficient funding to cover expenses. $ 482,039 $ 3,100,004 Special Revenue Source Fund City Manager Represents a correction for the Kiwanis donation, which was received a year later than expected. $ 70,000 $ - Special Revenue Source Fund Housing and Human Services Represents a correction to transfer revenue between Funds. The revenue for the Childcare Linkage Fee is being moved from the Miscellaneous Grants Fund to the Special Source Revenue Fund. $ 35,000 $ 35,000 Special Revenue Source Fund Non-Departmental Represents a correction for the revenue from the fees paid by cable operators, which was inadvertently omitted from the FY 2023-25 Budget. $ 207,000 $ 207,000 Special Revenue Source Fund Transportation Represents a decrease in Transporation Impact Fees based on updated revenue projections analyzing actuals in the last three years. $ (275,000) $ (275,000) Vehicle Management Fund Public Works Represents lower than anticipated increase in Southern California Gas rates. $ (300,000) $ (300,000) Vehicle Management Fund Public Works Represents the increase of vehicle maintenance revenue charged to non-General Funds into the Vehicle Management Fund associated with adding 1.0 FTE Senior Mechanic and 1.0 FTE Mechanic I. $ 57,961 $ 180,029 Vehicle Management Fund Public Works Represents revenue into the Vehicle Management Fund from the Resource Recycling and Recovery (RRR) Fund, associated with the purchase of six new RRR vehicles. $ 4,025,703 $ 977,912 Vehicle Management Fund Public Works Adjustment to revenue from vehicle maintenance charges billed to user departments. The increase adjusts the budgeted projections for cost of living increases on expenses to capture full cost recovery on vehicle maintenance services. The cost for services charged to user departments will increase resulting in increased revenue to the fund. $ 715,300 $ 715,300 Water Fund Public Works Represents reimbursements from Stormwater and Wastewater Funds for staff time expended on behalf of those funds. $ 54,443 $ 40,017 Water Fund Public Works Represents an uptick in large development permits and the associated development fees. $ 500,000 $ 500,000 Page A-7 of 14 11.B.a Packet Pg. 265 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES REVENUE BUDGET ADJUSTMENTS Water Fund Public Works Represents the decline in water consumption as a result of continued water conservation efforts and the expectation of another extreme wet winter. $ (5,500,000) $ (5,500,000) Total Other Fund Revenue Changes $ (157,685) $ (2,409,527) FY 2023-24 FY 2024-25 total fund Airport Fund $ (396,185) $ (54,971) total fund Beach Fund $ (50,000) $ - total fund Big Blue Bus Fund $ (1,891,258) $ (2,307,267) Citizens' Option for Public Safety (COPS) Fund $ 15,000 $ 15,000 Gas Tax Fund $ (183,147) $ - total fund Housing Authority Fund $ (749,119) $ (839,628) total fund Miscellaneous Grants Fund $ 1,782,052 $ (733,325) total fund Pier Fund $ 30,000 $ 30,000 total fund Resource Recovery & Recycling Fund $ 600,000 $ - total fund Risk Management Administration $ 312,526 $ 800,402 Self Insurance, Bus Fund $ 300,000 $ 1,000,000 Self Insurance, Comprehensive Fund $ 482,039 $ 3,100,004 total fund Special Revenue Source Fund $ 37,000 $ (33,000) total fund Vehicle Management Fund $ 4,498,964 $ 1,573,241 total fund Water Fund $ (4,945,557) $ (4,959,983) $ (157,685) $ (2,409,527) $ 1,021,539 $ 3,988,048 Total Revenue Changes All Funds Grand Total Other Funds Revenue Changes Other Fund Revenue Changes by Fund Page A-8 of 14 11.B.a Packet Pg. 266 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) City Manager $ 19,416 City Attorney $ 23,035 Records and Elections Services $ 6,172 Community Development $ 54,999 Fire Dept $ 160,615 Finance $ 20,660 Housing and Human Services $ 104,708 Human Resources $ 9,394 Information Services $ 59,566 Library $ 16,535 Police Dept $ 574,592 Public Works $ 1,269,537 Recreation and Arts $ 30,652 Transportation $ 216,436 Transportation $ 147,672 Non-Departmental $ 295,344 City Council $ 50,000 City Manager $ (27,923) $ 198,679 Non-Departmental $ (22,077) $ (198,679) Housing and Human Services $ 93,125 Non-Departmental $ (93,125) Housing and Human Services $ 95,500 Non-Departmental $ (95,500) Public Works $ 46,946 $ 116,763 Non-Departmental $ (46,946) $ (116,763) General Fund Community Development This net zero adjustment reflects the addition of 2.0 FTE Building Inspectors, offset by one-time savings from overtime and professional services expenditures in FY 2023-24 and ongoing additional Building and Safety revenues starting in FY 2024-25. $ 302,752 DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES EXPENDITURE BUDGET ADJUSTMENTS General Fund Represents increased payments to the General Liability and Auto Fund based on the September 2023 actuarial analysis completed by an independent actuary to achieve a 75% confidence level (statistical certainty that an actuary believes funding will be sufficient to cover claim expenses, excess insurance premiums and program overhead). General Fund Represents increased payments to the Risk Management Administration Fund for property insurance due to higher renewal premiums than what was originally anticipated by the City's broker due to California's natural disasters, such as wildfires and hurricanes, and carriers leaving the market altogether. General Fund This adjustment reflects the addition of 1.0 FTE Project Support Assistant (limited term thru 12.31.2028) funded by the Airport Fund. This net zero adjustment reflects a one-time increase to City Council's discretionary funds and travel accounts; equity adjustments within the City Manager's Office; and the addition of 1.0 FTE 911 CAD Administrator, offset by the deletion of 1.0 FTE Administrative Analyst and reallocation of non-departmental funds. General Fund This adjustment reflects the Tenant Protections and a Right to Counsel program as part of the City's Homeless Prevention Strategy, funded by the Housing Trust Fund.General Fund General Fund This adjustment reflects the purchase of Below Market Housing (BMH) Software Portal Enhancement for Tenants and Landlords, funded by the Housing Trust Fund. Page A-9 of 14 11.B.a Packet Pg. 267 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES EXPENDITURE BUDGET ADJUSTMENTS General Fund Recreation and Arts This adjustment reflects the addition of 1.0 FTE Guest Services Assistant for Outdoor Sports Facility permitting, Memorial Park front office and providing enhanced customer service and support for the Community Recreation Division, offset by additional field permit revenues. $ 28,098 $ 70,965 General Fund Non-Departmental This reflects adjustments to the Measure GSH allocation for SMMUSD and affordable housing transfer corresponding with lower than projected Transaction and Use Tax (TUT) revenue. The TUT revenue budget is also being reduced. $ (26,250) $ (102,750) General Fund Non-Departmental Adjustment related to CalPERS pension contribution increases related to the unfunded liability in FY 2024-25. The new amount is based on the revised valuation reports provided by CalPERS. $ 1,170,000 Total General Fund Operating Expenditure Changes $ 1,848 $ 4,450,300 FY 2023-24 FY 2024-25 City Council $ 50,000 $ - City Manager $ (27,923) $ 218,095 City Attorney $ - $ 23,035 Records and Elections Services $ - $ 6,172 Community Development $ - $ 357,751 Fire Dept $ - $ 160,615 Finance $ - $ 20,660 Housing and Human Services $ 188,625 $ 104,708 Human Resources $ - $ 9,394 Information Services $ - $ 59,566 Library $ - $ 16,535 Police Dept $ - $ 574,592 Public Works $ 46,946 $ 1,386,300 Recreation and Arts $ 28,098 $ 101,617 Transportation $ - $ 364,108 Non-Departmental $ (283,898) $ 1,047,152 $ 1,848 $ 4,450,300 Grand Total General Fund Operating Expenditure Changes General Fund Expenditure Changes by Department Page A-10 of 14 11.B.a Packet Pg. 268 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES EXPENDITURE BUDGET ADJUSTMENTS Airport Fund Public Works $ 12,953 $ 14,341 Community Development $ 11,617 $ 12,863 Public Works $ 27,020 $ 29,916 Recreation and Arts $ 6,752 $ 7,475 Cemetery Fund Public Works $ 9,847 $ 10,901 Community Development $ 12,371 $ 13,696 Police Dept $ 2,905 $ 3,216 Public Works $ 52,963 $ 58,638 Resource Recovery & Recycling Fund Public Works $ 121,430 $ 134,441 Risk Management Administration Finance $ 11,805 $ 13,069 Vehicle Management Fund Public Works $ 12,248 $ 13,561 Wastewater Fund Public Works $ 138,188 $ 152,994 Water Fund Public Works $ 61,940 $ 68,576 Airport Fund Public Works $ 59,656 $ 68,168 Public Works $ 441 $ 504 Recreation and Arts $ 15,776 $ 18,028 Big Blue Bus Fund Transportation $ 71,378 $ 81,562 Cemetery Fund Public Works $ 12,774 $ 14,596 Community Development $ 59,229 $ 67,679 Police Dept $ 537 $ 614 Public Works $ 93 $ 106 Resource Recovery & Recycling Fund Public Works $ 707 $ 808 Risk Management Administration Finance $ 187 $ 214 Vehicle Management Fund Public Works $ 27,880 $ 31,857 Wastewater Fund Public Works $ 10,412 $ 11,897 Water Fund Public Works $ 49,562 $ 56,633 Big Blue Bus Fund Transportation Represents increased payment to the Transit Liability Fund based on the September 2023 actuarial analysis completed by an independent actuary to achieve a 75% confidence level (statistical certainty that an actuary believes funding will be sufficient to cover claim expenses, excess insurance premiums and program overhead). $ 300,000 $ 1,000,000 Beach Fund Pier Fund Pier Fund Beach Fund Represents increased payments to the General Liability and Auto Fund based on the September 2023 actuarial analysis completed by an independent actuary to achieve a 75% confidence level (statistical certainty that an actuary believes funding will be sufficient to cover claim expenses, excess insurance premiums and program overhead). Represents increased payments to the Risk Management Administration Fund for property insurance due to higher renewal premiums than what was originally anticipated by the City's broker due to California's natural disasters, such as wildfires and hurricanes, and carriers leaving the market altogether. Page A-11 of 14 11.B.a Packet Pg. 269 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES EXPENDITURE BUDGET ADJUSTMENTS Airport Fund Public Works $ 226 $ 700 Beach Fund Public Works $ 5,322 $ 16,533 Cemetery Fund Public Works $ 564 $ 1,750 Police Dept $ 16 $ 48 Public Works $ 904 $ 2,808 Resource Recovery & Recycling Fund Public Works $ 44,616 $ 138,582 Risk Management Administration Finance $ 22 $ 68 Vehicle Management Fund Public Works $ 88,206 $ 273,976 Wastewater Fund Public Works $ 2,354 $ 7,312 Water Fund Public Works $ 3,937 $ 12,228 Community Development $ 183,859 $ 183,859 Recreation and Arts $ 5,710 $ 5,710 Pier Fund Community Development $ 10,431 $ 10,431 Transportation $ (522,327) Capital Improvement $ 522,327 Transportation $ (67,673) Capital Improvement $ 67,673 Public Works $ 375,161 Capital Improvement $ 4,025,703 $ 602,751 Public Works $ 375,161 Capital Improvement $ 4,025,703 $ 602,751 Clean Beaches/Ocean Parcel Tax Fund Non-Departmental $ 370,430 $ (218,664) Wastewater Fund Non-Departmental $ (370,430) $ 218,664 Pier Fund This adjustment reflects the department's contribution to the Vehicle Management Fund associated with adding 1.0 FTE Sr Mechanic and 1.0 FTE Mechanic I to provide maintenance on the City's Vehicle. This adjustment reflects increased contributions to the General Fund to support the growing costs of parking operations due to increased usage of the Beach and Pier lots, resulting in higher costs in labor, liability insurance, and repairs/replacements from both regular maintenance and vandalisms of parking facilities and equipment. This adjustment reflects the transfer of the Caltrans grant and local match Transportation Impact Fee (TIF) funds from operating to the Capital Improvement Program budget for the Santa Monica Boulevard Safety Enhancement study. Miscellaneous Grants Fund Special Revenue Source Fund Beach Fund Resource Recovery & Recycling Fund Vehicle Management Fund Reflects the accounting transactions required for the purchase and ongoing replacement cost of (6) new Resource Recovery and Recycling vehicles. The transactions include contributions from the RRR fund to the Vehicle Management Fund as well as ongoing maintenance of the vehicles. This adjustment reflects the actual repayment schedule determined by the State Water Resources Control Board, which was post development of FY 2023-25 Biennial Budget. Page A-12 of 14 11.B.a Packet Pg. 270 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES EXPENDITURE BUDGET ADJUSTMENTS Airport Fund Non-Departmental This adjustment reflects the addition of 1.0 FTE Project Support Assistant (limited term thru 12.31.2028) funded by the Airport Fund. $ 46,946 $ 116,763 Housing Authority Fund Housing and Human Services This adjustment reflects lower HAP voucher utilization primarily due to a delay in the lease-up of 57 project based units at 1413 Michigan Avenue as well as lower voucher utilization due to a longer lease-up period on the Emergency Housing Voucher and Serial Inebriate Programs. $ (1,670,716) $ (299,506) Miscellaneous Grants Fund City Manager This adjustment reflects the award of a new grant from the U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) through the State of California, Governor’s Office of Emergency Services (CalOES) to support the preparations of the Local Hazard Mitigation Plan. $ 135,000 Miscellaneous Grants Fund Housing and Human Services This adjustment reflects the acceptance of a new Local Aging and Disability Action Planning (LADAP) Grant to retain a consultant to develop a strategic plan that will address the needs of older adults and people with disabilities living in Santa Monica. $ 200,000 Miscellaneous Grants Fund Police Dept This Adjustment reflects an additional grant award amount from the California Office of Traffic Safety for the 2023 STEP (Selective Traffic Enforcement Program) Grant for education and special enforcement efforts to help prevent traffic-related deaths and injuries. $ 31,600 Special Revenue Source Fund Non-Departmental This adjustment reflects the Tenant Protections and a Right to Counsel program as part of the City's Homeless Prevention Strategy, funded by the Housing Trust Fund $ 93,125 Special Revenue Source Fund Non-Departmental This adjustment reflects the purchase of BMH Software Portal Enhancement for Tenants and Landlords, funded by the Housing Trust Fund. $ 95,500 Page A-13 of 14 11.B.a Packet Pg. 271 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT A Fund Department(s)Description FY 2023-24 Increase / (Decrease) FY 2024-25 Increase / (Decrease) DETAIL OF ALL FY 2023-24 AND FY 2024-25 PROPOSED BUDGET CHANGES EXPENDITURE BUDGET ADJUSTMENTS Special Revenue Source Fund Non-Departmental Reflects adjustment to the Measure GSH affordable housing transfer corresponding with lower than projected Transaction and Use Tax (TUT) revenue. The TUT revenue budget is also being reduced. $ 8,750 $ 34,250 Total Other Funds Expenditure Changes $ 8,428,449 $ 4,347,689 FY 2023-24 FY 2024-25 total fund Airport Fund $ 119,781 $ 199,972 total fund Beach Fund $ 256,497 $ 274,888 total fund Big Blue Bus Fund $ 371,378 $ 1,081,562 total fund Cemetery Fund $ 23,185 $ 27,247 total fund Clean Beaches/Ocean Parcel Tax Fund $ 370,430 $ (218,664) total fund Housing Authority Fund $ (1,670,716) $ (299,506) total fund Miscellaneous Grants Fund $ 366,600 $ - total fund Pier Fund $ 139,449 $ 157,236 total fund Resource Recovery & Recycling Fund $ 4,192,456 $ 1,251,743 total fund Risk Management Administration $ 12,014 $ 13,351 total fund Special Revenue Source Fund $ 197,375 $ 34,250 total fund Vehicle Management Fund $ 4,154,037 $ 1,297,306 total fund Wastewater Fund $ (219,476) $ 390,867 total fund Water Fund $ 115,439 $ 137,437 $ 8,428,449 $ 4,347,689 General Fund Operating $ 1,848 $ 4,450,300 Other Funds Operating $ (212,957) $ 3,142,187 total fund Total Operating Changes all Funds $ (211,109) $ 7,592,487 General Fund Capital $ - $ - Other Funds Capital $ 8,641,406 $ 1,205,502 Total Capital Changes all Funds $ 8,641,406 $ 1,205,502 $ 8,430,297 $ 8,797,989 Grand Total Other Funds Operating and Capital Expenditure Changes Other Funds Expenditure Changes by Fund Total Expenditure Changes all Funds Page A-14 of 14 11.B.a Packet Pg. 272 Attachment: Attachment A - Budget Adjustments [Revision 3] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT B City Council Meeting: February 27, 2024 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 THE FOLLOWING NEW OR EXISTING CLASSIFICATIONS: ASSISTANT CITY MANAGER, CHIEF OFFICE ADMINISTRATOR-CAO, COMPUTER AIDED DISPATCH ADMINISTRATOR, COMMUNITY BROADBAND ADMINISTRATOR, DEPUTY CITY MANAGER, FINANCIAL REPORTING AND SYSTEMS ADMINISTRATOR, MAINTENANCE ASSISTANT, PAYROLL ADMINISTRATOR, PAYROLL ANALYST I, PAYROLL ANALYST II, AND PRINCIPAL INFORMATION SECURITY ANALYST. 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 July 2, 2023, for the indicated classification: Classification Salary Reason Maintenance Assistant $54,804/annual; Step 5 Equity adjustment SECTION 2. The following salary levels are hereby established, effective March 10, 2024, for the indicated classifications: Classification Salary Reason Assistant City Manager $348,936/annual; Step 5 Equity adjustment Chief Office Administrator-CAO $191,100/annual; Step 5 New classification Computer Aided Dispatch Administrator $133,620/annual; Step 5 New classification* Community Broadband Administrator $159,360/annual; Step 5 Equity adjustment Deputy City Manager $273,576/annual; Step 5 Equity adjustment Financial Reporting and Systems Administrator $147,300 annual; Step 5 New classification* Payroll Administrator $138,420/annual; Step 5 New classification* Payroll Analyst I $104,040/annual; Step 5 New classification* Payroll Analyst II $125,796/annual; Step 5 Title change; no change in salary* 11.B.b Packet Pg. 273 Attachment: Attachment B - Salary Resolution [Revision 1] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) ATTACHMENT B Classification Salary Reason Principal Information Security Analyst $163,068/annual: Step 5 New classification* * Subject to the approval of the Personnel Board SECTION 2. 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: Douglas Sloan City Attorney 11.B.b Packet Pg. 274 Attachment: Attachment B - Salary Resolution [Revision 1] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) POSITION AND CLASSIFICATION CHANGES ATTACHMENT C FUND DEPT FTE POSITION TITLE FUND DEPT FTE POSITION TITLE 01 CMO 1.0 Computer-Aided Dispatch (CAD) Administrator 1, 2 Add 1.0 Results in net zero impact to the General Fund 01 CMO 1.0 Administrative Analyst Delete (1.0) Results in net zero impact to the General Fund 01 CMO 1.0 Production Coordinator 01 CMO 1.0 Production Supervisor 1 Add/Delete - Results in net zero impact to the General Fund 01 CAO 1.0 Office Administrator 01 CAO 1.0 Chief Office Administrator-CAO 1, 2 Add/Delete - Results in net zero impact to the General Fund 01 CDD 2.0 Combination Building Inspector II Add 2.0 Funded by revenue from increased inspections 01 Finance 1.0 Fiscal Staff Assistant II 01 Finance 1.0 Fiscal Staff Assistant III 1 Add/Delete - Results in net zero impact to the General Fund 01 Finance 1.0 Financial Systems/Payroll Administrator 01 Finance 1.0 Financial Reporting and Systems Administrator 1, 2 Add/Delete - Results in net zero impact to the General Fund 01 Finance 1.0 Payroll Administrator 1, 2 Add 1.0 Results in net zero impact to the General Fund 01 Finance 1.0 Payroll Analyst Delete (1.0) Results in net zero impact to the General Fund 01 Finance 2.0 Payroll Analyst 01 Finance 2.0 Payroll Analyst II 1, 2 Title Change - Results in net zero impact to the General Fund 01 Finance 1.0 Administrative Analyst 01 Finance 1.0 Payroll Analyst I 1, 2 Add/Delete - Results in net zero impact to the General Fund 01 Finance 1.0 Senior Administrative Analyst 01 Finance 1.0 Principal Administrative Analyst 1 Add/Delete - Results in net zero impact to the General Fund 01 Finance 1.0 Supervising Accountant 01 Finance 1.0 Senior Accountant 1 Add/Delete - Results in net zero impact to the General Fund 01 HR 1.0 Deputy Director - Special Projects 01 HR 1.0 Administrative Services Officer 1 Add/Delete - Results in net zero impact to the General Fund 01 HR 1.0 Human Resources Technician 01 HR 1.0 Human Resources Analyst 1 Add/Delete - Results in net zero impact to the General Fund 01 ISD 1.0 Community Broadband Manager Delete (1.0) Results in net zero impact to the General Fund 01 ISD 1.0 Business Process Technology Analyst 1 Add 1.0 Results in net zero impact to the General Fund 01 ISD 1.0 GIS Technician 1 Add 1.0 Results in net zero impact to the General Fund 01 ISD 1.0 Information Security Analyst 01 ISD 1.0 Principal Information Security Analyst 1, 2 Add/Delete - Results in net zero impact to the General Fund. 01 ISD 1.0 Principal Network Engineer 01 ISD 1.0 Community Broadband Administrator 1, 2 Add/Delete - Results in net zero impact to the General Fund. 01 Library 1.0 Library Literacy Program Assistant 01 Library 1.0 Library Program Specialist - Literacy Services 1 Add/Delete - Results in net zero impact to the General Fund 01 PW 1.0 Project Support Assistant (limited-term) 3 Add 1.0 Airport Fund would reimburse the General Fund for the cost of services provided. DELETE ADD REASON NET FTE CHANGE NET IMPACT February 27, 2024 11.B.c Packet Pg. 275 Attachment: Attachment C - Position and Classification Changes (6034 : Financial Status Update and FY POSITION AND CLASSIFICATION CHANGES ATTACHMENT C FUND DEPT FTE POSITION TITLE FUND DEPT FTE POSITION TITLE DELETE ADD REASON NET FTE CHANGE NET IMPACT 70 PW 1.0 Mechanic I/II 4 Add 1.0 Cost recovery from charge backs to departments and Funds for the actual services provided. 70 PW 1.0 Senior Mechanic 4 Add 1.0 Cost recovery from charge backs to departments and Funds for the actual services provided. 01 DOT 1.0 Transportation Planning Associate 01 DOT 1.0 Senior Administrative Analyst 1 Add/Delete - Results in net zero impact to the General Fund 01 RAD 1.0 Cultural Affairs Supervisor 1, 5 Add 1.0 Results in net zero impact to the General Fund 01 RAD 1.0 Community Services Program Supervisor 1, 5 Add 1.0 Results in net zero impact to the General Fund 01 RAD 0.7 Cultural Affairs Supervisor 01 RAD 1.0 Cultural Affairs Supervisor 1, 5 Add 0.3 Results in net zero impact to the General Fund 01 RAD 1.0 Guest Services Assistant 1, 5 Add 1.0 Funded by revenue from increased field permits issued and repurposing existing staff resources PERMANENT EMPLOYEES TOTAL 9.3 FTE 01 RAD 3.5 Swim Instructor/Pool Lifeguard 6 Delete (3.5) Results in net zero impact to the General Fund 01 RAD 0.3 Chief Pool Lifeguard 6 Delete (0.3) Results in net zero impact to the General Fund 01 RAD 3.6 Facilities Attendant Delete (3.6) Results in net zero impact to the General Fund 01 RAD 0.6 CCS Leader Delete (0.6) Results in net zero impact to the General Fund TEMPORARY EMPLOYEES TOTAL -8.0 FTE GRAND TOTAL 1.3 FTE 1 Cost of the position change will be offset by the reallocation of budgeted funds within department budgets, resulting in a net zero impact to the budget for FY 2023-25. 2 Subject to Personnel Board approval. 3 Limited-term ending December 31, 2028. 4 Costs related to the positions are charged back to departments and funds based on the actual services provided. 6 The as-needed staff time is being corrected to align with actual demand for the afterhours swim program, which has stabilized at a much lower level than originally anticipated. 5 Cost of the positions in Recreation & Arts will be offset by repurposing existing temporary staff resources within the department. February 27, 2024 11.B.c Packet Pg. 276 Attachment: Attachment C - Position and Classification Changes (6034 : Financial Status Update and FY ATTACHMENT D 1 City Council Meeting: February 27, 2024 Santa Monica, California RESOLUTION NUMBER _________ (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ABOLISHING POSITIONS FROM THE CLASSIFICATION PLAN WHEREAS, in accordance with the City of Santa Monica City Charter section 1109, whenever it becomes necessary, in the opinion of the City Council, positions may be abolished; and WHEREAS, the abolishment of positions allows for the proper preparation and maintenance of the classification plan for the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The job classifications set forth in Exhibit A of this Resolution are hereby abolished, effective March 10, 2024. SECTION 2. 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: _________________________ Douglas Sloan, City Attorney 11.B.d Packet Pg. 277 Attachment: Attachment D - Abolishment Resolution (6034 : Financial Status Update and FY 2023-24 Midyear Budget) CLASSIFICATIONS EXHIBIT A Accountant - Collections Accounting Manager Administrative Aide Administrative Analyst - Engineering Administrative Analyst - Homeless Services Administrative Analyst - Information Systems Administrative Analyst - Library Administrative Services Administrative Analyst - Library Fiscal Services Coordinator Administrative Assistant - City Manager's Office Administrative Intern II Administrative Project Manager Administrative Staff Assistant - Environmental Programs Airport and Real Estate Director Airport Gse Mechanic Airport Guest Service Representative Airport Line Service Crew Leader Airport Line Service Supervisor Airport Line Service Worker Airport Noise/Operations Specialist Assistant Chief Information Officer Assistant Community Broadband Analyst Assistant Director of Finance Assistant Fire Marshal - Hazardous Materials Assistant Police Chief As-Needed Audio for Video Operator Bikeshare Coordinator Billing and Collections Administrator Broadband Program Administrator Cable TV Manager Chief Administrative Officer Chief Civic Wellbeing Officer Chief Data Officer Chief Performance Officer City Hall Receptionist City Planning Staff Assistant City Urban Designer Civil Engineer - Special Projects As-Needed Communications Operator - Fire/Lateral Transfer Communications Operator - Lateral Transfer Communications and Public Affairs Officer Community Broadband Analyst 11.B.d Packet Pg. 278 Attachment: Attachment D - Abolishment Resolution (6034 : Financial Status Update and FY 2023-24 Midyear Budget) CLASSIFICATIONS EXHIBIT A Community Engagement Coordinator Community Services Program Supervisor - Community Sports Programs Community Services Program Supervisor - Therapeutic Recreation and Community Sports Programs Computer Support Specialist Computer Support Technician I Computer Support Technician II Construction Specialist Council Office Coordinator CUPA/Environmental Coordinator Data Officer Data Science Administrator Director of Special Projects for Information Services Emergency Services Manager Employee Benefits Technician Environmental Compliance Specialist Environmental Programs Analyst - Hazardous Materials Management Facilities Maintenance Contracts Administrator Fbo Manager Financial Reporting Supervisor Financial Systems Analyst Fiscal Staff Assistant I Fiscal Support Assistant Fleet Maintenance Administrator Forensic Artist As-Needed Graphic Design Assistant Hearings Coordinator Human Resources Assistant Human Resources Specialist Infrastructure and Cloud Services Administrator Internal Audit Manager Internet Systems Analyst Irrigation Crew Leader Lead Crime Prevention Coordinator Lead Systems Analyst Lead Systems Analyst - ERP Lead Systems Analyst - Public Safety Lead Systems Analyst - Water Resources Lead Systems Analyst - Permitting Systems Librarian III Librarian III - Branch Services Librarian III - Information Management 11.B.d Packet Pg. 279 Attachment: Attachment D - Abolishment Resolution (6034 : Financial Status Update and FY 2023-24 Midyear Budget) CLASSIFICATIONS EXHIBIT A Librarian III - Reference Services Librarian III - Youth Services Management Fellow Marketing/Communications Assistant Neighborhood Preservation Coordinator Office Manager to the City Manager Organizational Development and Training Administrator Organizational Development and Training Coordinator Permit Specialist Pier Manager Pipe Fitter Plans Examiner I - Electrical Plans Examiner II - Electrical Plans Examiner III - Electrical Police Range Master Police Safety Dive Instructor As-Needed Police Services Assistant Police Services Management Supervisor Policy Development Officer As-Needed Principal Administrative Analyst - Fire Principal Administrative Analyst - Information Systems Principal Design Planner Principal Librarian Principal Planning and Community Development Analyst Principal Public Works Analyst Principal Sustainability Analyst Principal Treasury Analyst Principal Urban Designer Procurement Supervisor Project Manager Project Manager - Wellbeing Project Project Portfolio Coordinator Public Information Coordinator Public Safety Dispatcher - Lateral Transfer Public Works Utility Inspector Purchasing Services Manager Records Management Assistant Reprographics Specialist I Revenue and Collections Manager Revenue Collections Supervisor Revenue Operations Assistant I 11.B.d Packet Pg. 280 Attachment: Attachment D - Abolishment Resolution (6034 : Financial Status Update and FY 2023-24 Midyear Budget) CLASSIFICATIONS EXHIBIT A Revenue Operations Assistant II Social Worker I Software Systems Analyst - ERP Software Systems Analyst - Permitting Systems Software Systems Analyst - Water Resources Software Systems Manager Special Counsel/Chief of Staff Special Projects Administrator - Planning and Community Development Special Projects Engineer Senior Administrative Analyst - Architecture Senior Administrative Analyst - Child and Family Resources Senior Administrative Analyst - Homeless Services Senior Administrative Analyst - Human Services/Fiscal Senior Administrative Analyst - Open Space Management Senior Administrative Analyst - Parks and Community Facility Planning Senior Advisor to the City Manager On Airport Affairs Senior Advisor to the City Manager On Homelessness Senior Deputy City Clerk Senior Drafting Technician Senior Human Services Program Analyst Senior Marketing Manager Senior Procurement Analyst Senior Revenue Operations Assistant Staff Assistant I Successor Agency Administrator Support Services Manager Sustainability Manager Sustainable Building Advisor Sustainable Energy Engineer Sustainable Procurement Advisor Systems and Network Manager Systems Administrator/Programmer Analyst Systems Administrator Systems Analyst - Permitting System Systems Analyst - Public Safety Systems Analyst - Share Point Systems Analyst - Transit Systems Technical Staff Assistant Technology Project Manager Traffic and Parking Manager Tree Trimmer 11.B.d Packet Pg. 281 Attachment: Attachment D - Abolishment Resolution (6034 : Financial Status Update and FY 2023-24 Midyear Budget) CLASSIFICATIONS EXHIBIT A Urban Designer Urban Forest Contract Supervisor Urban Forester Administrator Veterinarian Video Camera Operator Video Engineer Video Intern Video Non-Linear Editor Video On-Line Editor I Video On-Line Editor II Video Student Intern Video Technician I Video Technician II Water Construction Crew Leader Water Resources Crew Leader Water Resources Program Administrator Water Supervisor- Construction Water Supervisor- Meters Water Systems Equipment Operator Workers' Compensation Administrator Workers' Compensation Claims Technician Youth and Family Services Support Coordinator 11.B.d Packet Pg. 282 Attachment: Attachment D - Abolishment Resolution (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 1 David Yakobson From:Ellis Raskin <ellis.raskin@gmail.com> Sent:Tuesday, February 27, 2024 11:39 AM To:councilmtgitems Subject:Agenda Item 11-B Follow Up Flag:Follow up Flag Status:Flagged EXTERNAL Dear Hon. Councilmembers: I am writing to join in the insightful comments submitted by the Community for Excellent Public Schools. I will not repeat or reiterate those comments here, but it bears emphasis that our city has a long and proud history of supporting our schools through the Master Facilities Use Agreement, and we should not reverse course. If we truly care about our students’ future success, we must continue to make meaningful material contributions to educational success through the Master Facilities Use Agreement. Best, Ellis Raskin Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 283 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 2 David Yakobson From:Soloff, Michael <Mike.Soloff@mto.com> Sent:Tuesday, February 27, 2024 10:52 AM To:Gleam Davis; Caroline Torosis; Jesse Zwick; Phil Brock; Oscar de la Torre; Lana Negrete; christine.para@santamonica.gov; councilmtgitems Cc:'sue.himmelrich@gmail.com'; Jon Katz; SM Renters Rights Subject:RE: Michael Soloff et al. Comments on Item 11-B on City Council Agenda for 2.27.24 Meeting Attachments:Mike Soloff Letter to Council on Item 11-B on City Council 2.27.24 Agenda.pdf Follow Up Flag:Follow up Flag Status:Flagged EXTERNAL Please find attached my comments on Item 11-B on tonight’s agenda. Fellow 2022 Measure GS official proponents Sue Himmelrich and Jon Katz, as well as the SMRR Executive Committee, join in these comments. Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 284 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) February 27, 2024 To: Santa Monica City Council Re: Item 11-B on 2/27/24 Agenda: Financial Status Update and FY 2023-24 Midyear Budget Dear Councilmembers: I am writing in both my individual capacity as an official proponent of 2022 Measure GS, and in my capacity as co-chair of Santa Monicans for Renters’ Rights. I am authorized to advise you that the other official proponents of 2022 Measure GS (Sue Himmelrich and Jon Katz), my SMRR Co-Chair (Denny Zane), and the entire SMRR Executive Committee concur in the views expressed below. Each Member Of The City Council Should Commit Tonight To Extending The Master Facilities Use Agreement Funding To SMMUSD (Or To Any Santa Monica-Only Successor District) Past 2027 The Staff Report for Item 11-B provides five year revenue and expenditure projections under both the assumption that the City’s Master Facilities Use Agreement with SMMUSD (“the Agreement”) is not renewed when it expires in 2027, and on the assumption it is renewed. It is essential that each member of the City Council commit tonight to extending the funding provided to SMMUSD pursuant the Agreement past its expiration in 2027. First, a failure to maintain the transfer of City funds to SMMUSD (or to any successor Santa Monica-only district) would violate Santa Monica Municipal Code Subsection 4.90.20(c), which was adopted by the voters as part of 2022 Measure GS. That subsection provides: In enacting this Initiative, it is the intent of the voters that any funds allocated to the SMMUSD or any future school district pursuant to this Section should be additional to, and not a replacement of, any funds the City otherwise provides to the school district, including any funds provided according to existing agreements or in accordance with prior advisory measures regarding City funding for public education. As the plain language of this subsection demonstrates, it was the intent of the proponents and the will of the voters that all existing transfers to the schools continue after the passage of 2022 Measure GS—not just those pursuant to prior voter advisory measures—and that 2022 Measure GS funding for the schools constitute an increase in those transfers. That intent and will is not advisory—it is part of the Municipal Code and cannot be changed except by the voters. See Santa Monica Municipal Code Section 4.90.060 (“The provisions of this Chapter 4.90 may not be amended absent a vote of the people of the City of Santa Monica.”). Second, the withdrawal of existing City funding for our schools pursuant to the Agreement would constitute terrible public policy. The importance of quality public education to both our community’s children and to our community as a whole should be self-evident. Indeed, public education is so important that the founders of Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 285 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) California placed a guarantee of free public education into the State Constitution, and the California Supreme Court has decreed that this is a fundamental right entitled to special legal protection. The voters of our community have repeatedly expressed their willingness to increase taxes to support our schools, and our schools have consistently been ranked as among the best in the State and the Nation. The quality of our public schools has been transformative for many of our community’s children and—while work clearly remains to be done to close the achievement gap—reducing funding for the schools will not help and likely will hurt efforts to close that gap. Preparing our community’s children to be productive members of society benefits the entire community, and the quality of our schools undoubtedly is one of the factors supporting the high property values that in turn support the property tax revenues on which our City depends. In 2022, the five members of the current Council who then served on the Council all voted to put Measure DT on the ballot, which provided no additional funding for the schools and increased funding to restore City services. Only 34% of the voters supported Measure DT, while 53.5% voted for Measure GS. The voters are entitled to know whether this Council intends to respect the will of the voters, or instead intends to try to subvert that will. And the voters are entitled to know each Councilmember’s intentions right now, in advance of the 2024 and 2026 elections that will take place before the Agreement expires, so they can assure a Council is in place in 2027 that will respect the voters will. Please vote tonight to commit to maintaining the current levels of City funding for our schools pursuant to all existing agreements, including the Agreement. The City Council Should Ask Staff To Provide Updated Projections On When The City’s Housing Trust Fund Will Receive The Promised Repayment Of Diverted Funds 2022 Measure GS also requires the City to repay the funds diverted from the Housing Trust Fund. Pursuant to that Measure, Santa Monica Municipal Code Subsection 4.90.030(c) provides: In enacting this Initiative, it is the intent of the voters that any funds allocated to the Homelessness Prevention and Affordable Housing Fund should be additional to, and not a replacement of, any funds the City otherwise provides for the purposes described above, including any funds provided in accordance with prior advisory measures regarding City funding for affordable housing. Subsequent to the voters’ adoption of this provision of the Municipal Code, this Council authorized the City to take funds from the Housing Trust Fund to pay a settlement of Euler claims against the City—and to postpone a promised repayment of funds diverted from the Housing Trust Fund at the beginning of the Pandemic—pursuant to a promise to repay those funds in a timely manner. In October 2023 the Council adopted the Staff’s proposal of how to effectuate that repayment promise. The Staff Report for this budget item provides no report of whether any of these diverted funds have been repaid to date, nor any projections of when they will be repaid. We request that Council direct Staff to provide this information. It is essential to monitor the repayment plan to make certain it will fulfill this Council’s promise and the City’s obligation under 2022 Measure GS to repay the diverted Housing Trust Fund monies. Sincerely, Michael Soloff Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 286 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 3 David Yakobson From:Kelly Wine <kwine333@yahoo.com> Sent:Tuesday, February 27, 2024 9:34 AM To:councilmtgitems Subject:Agenda Item - 11.B, Attachment B EXTERNAL Dear City Council Members, I am writing to convince the Santa Monica City Council to vote NO on the enormous salary increases being put forward in tonights agenda (Section 11.B, Attachement B) for the Assistant City Manager, Deputy City Manager, and Community Broadband Administrator. The early years of the Pandemic led to sweeping cuts of hundreds of jobs for permanent and part- time city employees and the shuttering of many city funded public services (such as library services). Many of these services have not returned in full. Many of the permanent and part-time employees of Santa Monica have not had their jobs reinstated due to city budget issues. Yet, citizens of Santa Monica still fund these services and jobs with their tax dollars and reap nothing in return. There are other items I would like the City Council Members to consider. The former Santa Monica City Manager (Rick Cole), resigned in 2020 during the difficult early days of the Pandemic. The City Council approved a 7 month severance package upon his resignation amounting to approximately $200,000.00. The City of Santa Monica has paid out approximately $230 million to resolve child molestation lawsuits brought against Eric Uller who volunteered for the city's Police Activities League (PAL). This was after numerous warning signs and Eric Uller's inappropriate behavior with children being reported by officers to higher ranking Santa Monica Police personnel. I implore that NO salary increases be agreed to by the Santa Monica City Council until ALL city funded services cut during Covid are returned in full, and all full and part-time city employees whose jobs were cut are reinstated to their original position. When the City of Santa Monica can get their "house in order" and fix what they poorly managed during the Pandemic, only then should pay increases of this magnitude be considered appropriate. Thank you. Mr. Kelly Wine Santa Monica Resident for 23 years Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 287 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 1 David Yakobson From:Sidney Baker <sidneybaker414@aol.com> Sent:Monday, February 26, 2024 6:44 PM To:councilmtgitems Subject:Re: Council Meeting February 27, 2024, Item 11. B., PUBLIC COMMENT EXTERNAL I have been told that Gleam Davis will NOT term out this year. I looked at her years of service on the Council and the Charter, and if I made a mistake I sincerely apologize. Sent from the all new AOL app for iOS On Monday, February 26, 2024, 1:36 PM, Sidney Baker <sidneybaker414@aol.com> wrote: SPRINGTIME IN VIENNA FOR COUNCIL MEMBER GLEAM DAVIS AT TAXPAYER EXPENSE Gleam Davis will term out on the City Council this year. Why are Santa Monica taxpayers paying to send a lame duck Council Member to Vienna, Austria for a week in April for a housing conference? ____ Nobody else could go? But the City is already sending Council Member Torosis. Is Caroline’s attendance not adequate? Why are two people from the City, neither of whom is employed in city planning or housing, jetting off to Vienna at taxpayer expense for a housing conference? Anyone notice all the new residential housing currently being constructed in Santa Monica without sending City Council Members abroad to study how to do it? ____ Because Santa Monica has excess funds? The City has unfunded pension liabilities in the hundreds of millions of dollars. The City will be further tapping into its declining reserves and reducing expenditures on important social programs to balance its operating budget. Crime and homelessness far from under control. Important City programs are not adequately funded.The City is paying $229.8 million to settle a lawsuit for sexual abuse by one of its employees. The City can’t even afford to control the hundreds of ground squirrels running wild at Palisades Park. Gleam’s trip to Vienna is so important that it justifies diverting funds away from other City programs? ____ Because Gleam can’t afford to pay her own way? Gleam is a wealthy Harvard Law School graduate employed as senior counsel for AT&T. Her husband is a wealthy consultant. Public records show they sold the home, a short walk from the Brentwood Mart, for a whopping $8,315,000, which they purchased in 2019 for $3,500,000. Do the Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 288 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 2 math. How many of you can even afford a home? Or a trip to Vienna? Many of you live paycheck to paycheck and have to pay for Gleam’s European international travel? ____ Because Gleam made a successful motion to reimburse her expenses? Gleam is no stranger to conflicts of interest. She thought it appropriate to vote on a project at the Miramar Hotel on which her husband was employed and Gleam would profit. She did not want to recuse herself despite knowing she had a personal financial interest in the project, even after her secret became public. It took the California Fair Political Practices Commission in a letter to Gleam, the experienced lawyer, in October 2020 to school her on how her participation in votes because of her personal financial conflict of interest would violate the law. (https://www.fppc.ca.gov/content/dam/fppc/documents/advice-letters/1995- 2015/2020/Final A-20-117.pdf. The Santa Monica City Attorney, also reached the wrong conclusion. Could it be because their employment and compensation are determined by Gleam and the City Council?) Gleam (and Caroline) had a financial conflict of interest and should have recused themselves on a vote to send themselves on an expensive European escapade. Was this legal (don’t ask the City Attorney)? ____ Because the City Council approved Gleam’s motion? None of the other Council Members can explain why it is an appropriate expense to send even one Council Member - Caroline Torosis - over 6,000 miles to a housing conference in a socialist foreign country with very high taxes that can pay for superior public housing policies. Or why Gleam’s attendance will in any way supplement Caroline’s participation at the same conference or contribute in any way to local housing policies in her short time remaining on the Council. (Look at all the housing currently being built locally without lessons from Vienna.) Especially when there are highly educated and experienced housing experts at nearby world class universities, in federal, state and local government, in private firms, and in Santa Monica’s own planning and housing departments. 2024 ____ Will the City Council cancel Gleam’s trip? We all make mistakes. Many can be forgiven if acknowledged and steps taken to correct them. The City Council approved Gleam’s trip only two weeks ago. They are reviewing the budget now. They can change their mind and cancel Gleam’s trip to Vienna if not Caroline’s too. Why when reviewing the budget won’t at least one Council Member show some spine and integrity and make a motion to cancel the expenditure? Could it be that Council Members have lost all idealism of their youth and are cynically looking forward to benefitting financially from similar trips to European capitals and other unwarranted expenditures of taxpayer funds in the future? __X__ NONE OF THE ABOVE. Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 289 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 3 David Yakobson From:Edith Karmes <edithkarmes@aol.com> Sent:Monday, February 26, 2024 5:48 PM To:councilmtgitems Subject:Public Comment, Item 11B, 2/27/2024 City Council Mtg. EXTERNAL You have to be kidding me with a European trip for 2 council members at public expense. I incorporate the following article in my comment - please post the article in full. Thank you. https://www.smobserved.com/story/2024/02/26/opinion/springtime-in-vienna-for-council-member-gleam-davis-at- taxpayer-expense/8132.html Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 290 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 1 David Yakobson From:Ann Bowman Sent:Monday, February 26, 2024 4:10 PM To:councilmtgitems; Phil Brock; Lana Negrete; Christine Parra; Oscar de la Torre; Gleam Davis; Caroline Torosis; Jesse Zwick Cc:David White; Susan Cline Subject:February 27, 2024 Council Meeting - Item 11.B. (Midyear Budget) - SUPPORT Recreation and Arts Department Restorations Follow Up Flag:Follow up Flag Status:Flagged Dear Mayor Brock and Esteemed Councilmembers: I write in full and enthusiastic support for Staff's recommendation to you of position restorations within the City's Recreation and Arts Department (RAD). The entire Community and Cultural Services (CCS) Department was eliminated during COVID budget cutting and I am so heartened to see that now, in addition to the rebirth of CCS as RAD, the City is serious about continuing to rebuild the breadth and scope of services to what the community once enjoyed. Thank you in advance for your support of these important position restorations! Sincerely, Ann Bowman Recreation and Parks Commissioner Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 291 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 2 David Yakobson From:Sidney Baker <sidneybaker414@aol.com> Sent:Monday, February 26, 2024 3:37 PM To:councilmtgitems Subject:Council Meeting February 27, 2024, Item 11. B., PUBLIC COMMENT Follow Up Flag:Follow up Flag Status:Flagged EXTERNAL SPRINGTIME IN VIENNA FOR COUNCIL MEMBER GLEAM DAVIS AT TAXPAYER EXPENSE Gleam Davis will term out on the City Council this year. Why are Santa Monica taxpayers paying to send a lame duck Council Member to Vienna, Austria for a week in April for a housing conference? ____ Nobody else could go? But the City is already sending Council Member Torosis. Is Caroline’s attendance not adequate? Why are two people from the City, neither of whom is employed in city planning or housing, jetting off to Vienna at taxpayer expense for a housing conference? Anyone notice all the new residential housing currently being constructed in Santa Monica without sending City Council Members abroad to study how to do it? ____ Because Santa Monica has excess funds? The City has unfunded pension liabilities in the hundreds of millions of dollars. The City will be further tapping into its declining reserves and reducing expenditures on important social programs to balance its operating budget. Crime and homelessness far from under control. Important City programs are not adequately funded.The City is paying $229.8 million to settle a lawsuit for sexual abuse by one of its employees. The City can’t even afford to control the hundreds of ground squirrels running wild at Palisades Park. Gleam’s trip to Vienna is so important that it justifies diverting funds away from other City programs? ____ Because Gleam can’t afford to pay her own way? Gleam is a wealthy Harvard Law School graduate employed as senior counsel for AT&T. Her husband is a wealthy consultant. Public records show they sold the home, a short walk from the Brentwood Mart, for a whopping $8,315,000, which they purchased in 2019 for $3,500,000. Do the math. How many of you can even afford a home? Or a trip to Vienna? Many of you live paycheck to paycheck and have to pay for Gleam’s European international travel? ____ Because Gleam made a successful motion to reimburse her expenses? Gleam is no stranger to conflicts of interest. She thought it appropriate to vote on a project at the Miramar Hotel on which her husband was employed and Gleam would profit. She did not want to recuse herself despite knowing she had a personal financial interest in the project, even after her secret became public. It took the California Fair Political Practices Commission in a letter to Gleam, the experienced lawyer, in Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 292 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 3 October 2020 to school her on how her participation in votes because of her personal financial conflict of interest would violate the law. (https://www.fppc.ca.gov/content/dam/fppc/documents/advice-letters/1995-2015/2020/Final A-20- 117.pdf. The Santa Monica City Attorney, also reached the wrong conclusion. Could it be because their employment and compensation are determined by Gleam and the City Council?) Gleam (and Caroline) had a financial conflict of interest and should have recused themselves on a vote to send themselves on an expensive European escapade. Was this legal (don’t ask the City Attorney)? ____ Because the City Council approved Gleam’s motion? None of the other Council Members can explain why it is an appropriate expense to send even one Council Member - Caroline Torosis - over 6,000 miles to a housing conference in a socialist foreign country with very high taxes that can pay for superior public housing policies. Or why Gleam’s attendance will in any way supplement Caroline’s participation at the same conference or contribute in any way to local housing policies in her short time remaining on the Council. (Look at all the housing currently being built locally without lessons from Vienna.) Especially when there are highly educated and experienced housing experts at nearby world class universities, in federal, state and local government, in private firms, and in Santa Monica’s own planning and housing departments. 2024 ____ Will the City Council cancel Gleam’s trip? We all make mistakes. Many can be forgiven if acknowledged and steps taken to correct them. The City Council approved Gleam’s trip only two weeks ago. They are reviewing the budget now. They can change their mind and cancel Gleam’s trip to Vienna if not Caroline’s too. Why when reviewing the budget won’t at least one Council Member show some spine and integrity and make a motion to cancel the expenditure? Could it be that Council Members have lost all idealism of their youth and are cynically looking forward to benefitting financially from similar trips to European capitals and other unwarranted expenditures of taxpayer funds in the future? __X__ NONE OF THE ABOVE. Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 293 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 1 David Yakobson From:Kevin McKeown <kevin@mckeown.net> Sent:Saturday, February 24, 2024 12:37 PM To:councilmtgitems Cc:Phil Brock; Lana Negrete; Gleam Davis; Caroline Torosis; Christine Parra; Jesse Zwick; Oscar de la Torre Subject:11-B -- managing overtime Follow Up Flag:Follow up Flag Status:Flagged EXTERNAL As you review the budget (item 11-B on your agenda), I hope you can get some informaƟon from staff about police overƟme. Pages 20 through 22 of the staff report detail general fund changes to numerous departments, but SMPD is not one of them. For many years, going back over many Chiefs, the Council has been told that police overƟme was necessary because we did not have enough police officers. In fact, the case was made that paying overƟme actually saved residents money because it was cheaper than hiring new personnel with aƩendant training, salaries, and benefits. We have now added significantly to our police force. While training, salaries, and benefits will impact the general fund, I see no menƟon of reduced overƟme. If the reason repeatedly given to Council jusƟfying overƟme was valid, there should now be considerably less need. Can you get staff to clarify this, and how much overƟme money might now be available for other purposes? Thanks, Kevin ———————————— K e v I n M c K e o w n hƩps://urldefense.com/v3/__hƩp://www.mckeown.net__;!!OfuUnHCITYtmmjM!oNA_X_059FXAAz- 8hMOwvADUlEUFPIDV6kN1aUlH7JrBdwbg27K7h04foICjZ356_J6o-g774JyzV18ucK3LhnDIJD8$ Choose to be conscious ———————————— Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 294 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 2 David Yakobson From:Ted Winterer <tedwinterer@gmail.com> Sent:Friday, February 23, 2024 12:40 PM To:Phil Brock; Lana Negrete; Christine Parra; Gleam Davis; Jesse Zwick; Oscar de la Torre; Caroline Torosis Cc:councilmtgitems; David White; nicole faries; Shari Davis; Debbie Mulvaney; Chris Harding; Sirinya Matute; Kean, Jon; Smith, Jennifer; Maria Leon-Vazquez; Alicia Mignano; Tahvildaran-Jesswein, Richard; Lieberman, Laurie; srouse@smmusd.org; Shelton, Antonio Subject:Item 11-B, 2/27/24 Council agenda Attachments:CEPS Ltr to CC 2024.02.23.pdf Follow Up Flag:Follow up Flag Status:Flagged EXTERNAL Councilmembers, We are writing to express our profound concerns about your staff report contemplating the elimination of the Master Facilities Use Agreement (MFUA) between the City and SMMUSD in 2027. Community for Excellent Public Schools (CEPS) was founded two decades ago to seek additional funding for our cash- strapped school district. At that time we gathered 15,000 signatures for a ballot measure to allocate City funds to SMMUSD. The Council in 2004 chose to negotiate the MFUA agreement, instead of facing the prospect of an initiative which would have allocated even more funding for our public schools than has been generated by the MFUA. So we are, of course, profoundly disturbed by a budget projection that contemplates an abrogation of this compact between the City and its residents. We are further troubled by the implication in your staff report that the monies from Measure GS which will soon flow to SMMUSD are a justification for eliminating the MFUA. Please note that Measure GS specifically provides that these dollars will not replace existing City funding for our schools -- doing so would violate the expressed will of the voters of Santa Monica. The decades-long partnership between the City and SMMUSD has yielded benefits to both parties. Now is not the time to create a rift in that partnership, so we urge you on Tuesday night to unequivocally reject the prospect of not extending the MFUA in 2027. Please see the attached letter for more details on our position. Regards, Nicole Faries Ted Winterer CEPS Co-Chairs -- Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 295 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 3 Ted Winterer Realtor @Compass, 2115 Main Street Santa Monica DRE #02047989 To help protect your privacy, Microsoft Office prevented automatic download of this picture from the Internet. Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 296 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Community for Excellent Public Schools 2532 Wilshire Blvd., #288 Santa Monica, CA 90403 www.excellentpublicschools.org February 23, 2024 Santa Monica City Council 1685 Main Street, Room 209 Santa Monica, CA 90401 Re: Financial Status Update and FY 2023-24 Midyear Budget Hearing Date: February 27, 2024 Agenda Item No. 11.B Dear Councilmembers: We are writing as co-chairs of Community for Excellent Public Schools (“CEPS”) with respect to the Staff Report on Agenda Item No. 11-B (Financial Status Update and FY 2023-24 Midyear Budget) as it relates to the City’s Master Facilities Use Agreement (“MFUA”) with the Santa Monica-Malibu Unified School District (“SMMUSD”). CEPS is very troubled by the Staff Report insofar as it raises the prospect of the MFUA potentially expiring in 2027. The purpose of the MFUA is to provide reliable long-term funding for our schools. The MFUA has a long history, beginning in 2004 (not 2012 as misstated in the Staff Report). And the Staff Report ignores the context in which the MFUA originated: in response to a potential ballot measure sponsored by CEPS that would have provided stable, long-term funding for our schools at a much higher level than the MFUA. After CEPS collected about 15,000 voter signatures on a charter amendment ballot measure (many more than required to qualify for the ballot), the City and SMMUSD entered the MFUA. The MFUA is a critical part of a larger strategic partnership between SMMUSD and the City, a partnership that has been mutually beneficial for both the City and SMMUSD. This partnership has resulted in many millions of dollars in annual City tax revenue that funds City services, generated primarily through the volunteer efforts of the school community. The City should be looking for ways to build on this partnership, not place it in jeopardy. In 2022, Santa Monica’s voters approved Measure GS (increasing the real estate transfer tax), which directed the first $10 million of its annual tax revenue to SMMUSD. Measure GS specifically provides that this funding will not replace existing City funding for our schools. Measure GS states, in what is codified in Santa Monica Municipal Code section 4.90.020(c): Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 297 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Community for Excellent Public Schools 2532 Wilshire Blvd., #288 Santa Monica, CA 90403 www.excellentpublicschools.org “In enacting this Initiative, it is the intent of the voters that any funds allocated to the SMMUSD or any future school district pursuant to this section should be additional to, and not a replacement of any funds the City otherwise provides to the school district, including any funds provided according to existing agreements or in accordance with prior advisory measures regarding city funding for public education.” (Emphasis added.) Thus, Santa Monica’s voters approved MFUA funding for our schools when they approved Measure GS in 2022. By referencing GS funding in the context of potentially allowing the MFUA to expire, the Staff Report threatens to violate both the letter and spirit of GS. In closing, CEPS urges each of you to commit in principle to extending the MFUA with no reduction in school funding. Such City Council direction will provide both City Staff and SMMUSD with the clarity they need to engage in responsible long-term budget planning. And such direction will assure the school community (including students, parents and teachers) and the general public that the City will continue its financial commitment to our public schools, which is critical to the overall health and well-being of our community. Sincerely, Ted Winterer Nicole Faries cc: David White CEPS Executive Committee CEPS Steering Committee SMMUSD Board of Education Dr. Antonio Shelton Item 11-B February 27, 2024 Item 11-B February 27, 2024 11.B.g Packet Pg. 298 Attachment: Written Comments [Revision 2] (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Financial Status Update and Midyear Review February 2024 11.B.h Packet Pg. 299 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) High Degree of Vo latility/Uncertainty 11.B.h Packet Pg. 300 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) •Reserves provide financial stability,cushion against financial shocks •Unrestricted reserves below pre- COVID levels •Legal Settlements •Maintain services during COVID •FY 2022-23 reserves are needed for contingent liabilities and working capital General Fund Reserve Levels 11.B.h Packet Pg. 301 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Funds borrowed from Other Funds Total $52.1 11.B.h Packet Pg. 302 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) •Lost $170M in revenues through June 2023 •To tal loss of over $204M, ending in ‘26-27 •Gap reflects capacity to restore services •Additional challenges: •New needs •Inflation –Higher Costs General Fund Revenues Still Lagging 11.B.h Packet Pg. 303 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Inflation Diminished Purchasing Power We would need $120 today to match $100 in pre-pandemic days Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) –national annual averages 11.B.h Packet Pg. 304 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) •3.7% average growth rate •TOT impacted by hotel renovations in short term. Stronger growth mid-2024 reaching peak levels by late 2025/early 2026 •Property taxes projected to increase as interest rates moderate or are reduced •Business License Tax increase from higher gross receipts and compliance efforts •Parking revenues lower than previous projection Revenue Growth is Steady but Slow 11.B.h Packet Pg. 305 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) •Contingent Liabilities (i.e., sexual abuse claims, CVRA) •Infrastructure and equipment maintenance funding at reduced levels •General and auto liability insurance contribution increases •Pension losses in FY 2021-22 •Healthcare increases reflecting national trends •Pier and Beach Funds require financial assistance from General Fund Expenditure Challenges 11.B.h Packet Pg. 306 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Capital needs unmet •Now at 59% of pre-COVID level •Deferred maintenance is unsustainable •No additional investments through forecast period •$358M in projects unfunded citywide Capital Needs Remain Unfunded with inflation Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) –national annual average 11.B.h Packet Pg. 307 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Capital Improvement Program Unfunded Projects (Not Comprehensive) 10 •Parking Structure 1 Seismic Retrofit •Memorial Park Expansion •Lincoln Neighborhood Corridor Streetscape •Street Light Upgrades •Vehicle and Computer Replacement •Gandara Park Restoration •Airport Park Expansion •Memorial Park Phases 2-3 •Fire Station Facilities •City Hall North Wing Building System Upgrade •Pier Deck Upgrades •Pier West End Upgrade •Public Landscape Relocation 11.B.h Packet Pg. 308 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) 11 Sidewalk repairs Right of way maintenance Streetlight maintenance Copper wire theft Capital Improvement Program –Deferred Maintenance 11.B.h Packet Pg. 309 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Challenges remaining •Contingent liabilities •Deferred infrastructure & maintenance •Additional CIP funding beyond base allocations •Program and service restorations •Labor negotiations Five Year General Fund Forecast *Includes the use of one-time working capital 11.B.h Packet Pg. 310 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) •Used to smooth years when projected expenditures exceed revenues •Made available from earlier revenue recovery •Programmed over forecast period •Covers continuation of programs and increases in pension, healthcare, insurance costs Need for Working Capital Reserve 11.B.h Packet Pg. 311 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Self-Sustaining: Water,Wastewater, RRR, BBB, Airport, Cemetery, Housing Authority, Stormwater Requiring Attention: Vehicle Management -future year repayments of suspended contributions General Fund Impact:Beach and Pier subsidies to offset revenue losses and support critical capital expenditures Other Funds (Non-General Fund) 11.B.h Packet Pg. 312 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Key Ta keaways •Stable forecast as economic recovery continues •Significant liabilities demands fiscal restraint --hindering program / service restoration •Mounting infrastructure and deferred maintenance needs •Need to continue to strengthen reserves 11.B.h Packet Pg. 313 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) FY 2023-25 Midyear Revenue Adjustments (in millions) General Fund FY 2024-25 Increase / (Decrease) FY 2023-24 Increase / (Decrease) Description $ 4.2$ (0.2)Transient Occupancy (Hotel) Tax (0.6) (0.7)Sales Tax and Use Tax 1.2 1.5 Property Tax 2.73.4Business License Tax (0.2)(0.2)Parking-Related (1.6)(2.0)Developer Agreement 0.7(0.6)Other Misc. Revenues $ 6.4 $ 1.2Total Revenue Changes •Enables balanced budget throughout forecast using essentially the same level of working capital reserve as in previous forecast. •Helps cover expenditure changes and cost increases. OS0 11.B.h Packet Pg. 314 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Slide 16 OS0 [@Jennifer Young] , this slide is good. We can use this one. Oscar Santiago, 2024-02-21T21:50:26.266 OS0 0 Show in millions and combine smaller items. Oscar Santiago, 2024-02-21T21:51:03.119 JY0 1 revised Jennifer Young, 2024-02-22T01:11:29.215 11.B.h Packet Pg. 315 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) FY 2023-25 Midyear Expenditure Adjustments General Fund FY 2023-24 Changes To tal $1,848 •Add 7.3 Permanent FTEs •3.0 from new revenues •3.3 by deleting 8.0 temp. FTEs •1.0 funded by Airport •Right to Counsel Program and Below Market Housing software upgrade (by Housing Trust Fund) •Reduced Measure GSH obligation from lower TUT FY 2024-25 Changes Total $4.5 Million •Increase insurance contributions •CalPERS pension contribution (0.7)Total FTE Changes 7.3Permanent (8.0)As-Needed 11.B.h Packet Pg. 316 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) FY 2023-25 Midyear Adjustments Other Funds Revenues (in millions)Expenditures (in millions) FY 2024-25FY 2023-24Fund $ (0.1)$ (0.4)Airport (2.3)(1.9)BBB (0.8)(0.7)Housing Authority (0.7)1.8 Miscellaneous Grants 4.9 1.1 Self Insurance Funds 1.6 4.5 Vehicle Management (5.0)(4.9)Water 0.0 0.3Other Funds $ (2.4)$ (0.2)Total FY 2024-25FY 2023-24Fund $ 1.1 $ 0.4 Big Blue Bus (0.2)0.4Clean Beaches (0.3)(1.7)Housing Authority 0.60.2RRR 0.70.1Vehicle Management 0.4(0.2)Wastewater Fund 0.80.6All Other $ 0.8$ (0.2)Total 2.0Total FTE Changes 2.0Permanent 0.0As-Needed 11.B.h Packet Pg. 317 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) FY 2023-25 Capital Budget Expenditure Adjustments Other Funds FY 2023-24 Changes To tal $8.6 Million •Purchase of vehicles in RRR o$4.0m payment from RRR to Vehicle Mgmt. Fund o$4.0m budget increase to Vehicle Mgmt. Fund to purchase the vehicles •Santa Monica Blvd Safety Enhancement Study FY 2024-25 Changes To tal $1.2 Million •Ongoing contribution for depreciation of new RRR Vehicles 11.B.h Packet Pg. 318 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget) Other Business Authorization: •to accept a grant award from the California Department of Aging’s Local Aging & Disability Action Planning (LADAP) grant program •to accept a grant award from the U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) through the State of California, Governor’s Office of Emergency Services (CalOES) 11.B.h Packet Pg. 319 Attachment: PowerPoint Presentation (6034 : Financial Status Update and FY 2023-24 Midyear Budget)