City of La Palma Proposed Budget OverviewFiscal Year 2013-14May 7, 2013

Tonight's Agenda• Proposed Budget Overview

– All Funds• Department Budget Highlights and

Discussion• City Council direction• Discussion of May 15, 2013 Study

Session goals

1

City Manager's Budget Message

• Fiscally Sustainable Budget – Outlook and Assumptions

• Budget Strategies - 4 "R's"• Budget Document Improvements

2

Improved Budget Document

• Priority Based Budgeting• Expanded Staffing Information• Functional Descriptions• Performance Measures• 2013 City Council Goals Status• Economic Trends• Challenges, Issues and Opportunities

3

City Council Goals• Balanced Budget• Create Proactive Economic

Development Strategies• Communications/Engagement• Maintain Quality of Life• Maintain High Public Safety Levels

4

Economic Trends

• Property and Sales Tax Impacts• Economic Development Assets• Tesoro revenue• Interest Rates

5

What’s on the Horizon?

• Challenges, Issues and Opportunities– Tesoro - Economic Diversification– Capital Investment– Health Reform– Labor– Pension Changes– Organizational Efficiencies

6

Reason for Optimism• In Summary – Positive Opportunities

– Tesoro 20 year operative agreement– New development and new businesses– New and more comprehensive reserve

policies– Creation of an irrevocable trust for OPEB

liabilities– Update of the Master Fee Schedule– 10 year capital plan

7

The Journey So Far…• Budget Development began in

December• Continuous review, analysis and

discussion• Public review and input:

– Three study sessions (one on May 15)– Three City Council meeting presentations

so far…• Two more scheduled…

• All of this gets us here… 8

Total Revenues, All Funds$17,722,595

General Fund8328100

47%

Special Revenue Funds1375700

8%

Capital Projects Fund405000

2%

Enterprise Funds

438100025%

Internal Service Funds

323279518%

Total Expenses, All Funds$19,994,670

General Fund8591645

43%

Transfer to COR400000

2%Special Revenue Funds1235525

6%

Capital Projects Fund1120000

6%

Enterprise Funds

486012524%

Internal Service Funds

378737519%

General Fund Summary

11

Projected Revenues $8,328,100Proposed Expenditures $8,591,645

Estimated Surplus / (Deficit) ($263,545)

General Fund Revenues$8,328,100

Property Tax; 37.2%

Sales Tax; 21.4%

Utility Users Tax; 13.8%

Franchise Fees; 4.4%

Transient Oc-cupancy Tax;

2.8%

Licenses and Permits; 2.7%

Charges for Services; 6.1%

Fines and Forfei-tures; 1.9%

Use of Money and Property;

2.7%

Other Revenue; 6.9%

General Fund Expenditures $8,591,645

Administration12%

Finance5%

Police56%

Recreation and Community

Services13%

Community Development

6%Public Works

8%

General Fund BudgetDepartment Cuts:Administration $ (32,230)Community Development $ (144,220)Finance $ (8,000)Police $ (77,300)Public Works $ (44,500)Recreation and Community Services $ (157,050)

$ (463,300)

Citywide Cuts:Energy Savings $ (30,000)Reduce Brea IT Service (2 days/week) $ (23,100)Eliminate Management Wellness benefit $ (4,500)City Manager COLA Elimination $ (2,500)OPEB Trust Savings (One-Time) $ (91,000)

$ (151,100)TOTAL EXPENDITURE CUTS $ (614,400)

Reductions and Revisions – Progress Towards Fiscal Sustainability

General Fund Budget

15

Revenue Enhancements – Progress Towards Fiscal Sustainability

Increased interest earnings $ 10,000

Increased Corporate Connection funding $ 6,000

Fee revisions $ 50,000

Summer Concerts Food Trucks/Beer and Wine $ 5,000

Additional advertising/alternative advertising $ 40,000

Share Crossing Guard Services (reimbursement) $ 8,000

Tesoro Additional Sales Tax $ 250,000

TOTAL ADDITIONAL REVENUE: $ 369,000

General Fund Budget

16

Use of Reserves – Progress Towards Fiscal Sustainability

One-Time Use of Reserves for Operating (“Bridge” Amount) $ (263,545)

Purchase of Street Lights from SCE $ (600,000)

Energy Capital Projects $ (1,280,000)

800 Mhz Radio Upgrade (Police) $ (200,000)

City Council 2013 Goals (Start-up Expend) $ (50,000)

TOTAL ONE-TIME USE OF RESERVES (FY 2013-14) $ (2,393,545)

General Fund Reserves

17

Projected General Fund Balance 06/30/2013 $ 13,618,200

Estimated FY 2013-14 General Fund Expend $ 8,591,645 Estimated FY 2013-14 General Fund Revenue $ 8,328,100

Variance (Deficit) / Surplus $ (263,545)

Transfer to COR $ (400,000)Triple-Flip Over-Allocation $ (162,500)One-time Use of Reserves $ (2,130,000)

TOTAL RESERVES USE $ (2,692,500)

Projected General Fund Balance 06/30/2014 $ 10,662,155 06/30/2014 FB as % of Expend 124.1%

Dollar Amount Reserves above 100% $ 2,070,510

Impacts and Consequences• 10.0 FTE eliminated / proposed for

elimination– FY 2012-13 Adopted Budget: 64.0 FTE– FY 2012-13 Amended Budget: 60.0 FTE– FY 2013-14 Proposed Budget: 54.0 FTE

• Reduction in building/planner customer service

• Reduction to Public Works response time• Reduced technology support• Reduced part-time support (Recreation)

18

Impacts and Consequences• Reduce Concerts in the Park (from 8 to 6)• Eliminate awards, advertising, supplies for:

– CAB Events (Arbor Day, Memorial Day, Tree Lighting, etc)

– Halloween Carnival– Fitness Run For Fun– La Palma Days

• Reduce overtime, training, professional association memberships

• Reduced tree maintenance• Suspension of Police K-9 program

19

Department Budget Highlights and Overviews

AdministrationCity

Council

Legal Services

City Manager

City ClerkCommunity Promotions

Intergovernmental

Administration Functional Tasks• City Manager

– Organization-wide Management

– Oversee City Budgets– Monitor Legislative Activities

• City Council Support– Support City Council

Activities• City Clerk

– Manage Legislative and Business License Processes

– Conduct Municipal Elections– Public Records and Brown Acts

• Community Promotions– Manage SEAACA Contract– Maintain Website– Oversee OCFA Agreement

• Legal Services– Oversee City Attorney and Labor

Attorney services• Human Resources

– Labor-Management Relations– Benefits, Recruitment,

Classification, Performance Management

– Training• Risk Management

– Protect the Assets of the City Through Proactive Activities & Policies

– Manage Claims Against the City– Identify Risk Hazards/Promote

Safety• Information Technologies

– Manage Citywide Technology Infrastructure and Equipment

22

AdministrationPerformance Measures

23

• # of City Employees per 1,000 Population• # of Press Releases and E-Blasts Issued• # of Agendas/Staff Reports Posted to Website• # of Sick Leave Hours Used per 1,000 Hours

Worked• % of Business Licenses Renewed Online• # of Workers Compensation Claims per 100

FTE

Administration Changes and Impacts FY 2013-14

24

• Changes– Across the board reductions in Meetings, Trainings, and

Supplies budgets– Elimination of Minutes Clerk at meetings– Reduction in information technology support– 4% savings on City Attorney costs

• Impacts– Less meeting and training dollars available for City

Council and Administration staff– Reduced service to public at meetings and reduced

productivity– Reduced ability to respond to technology issues/problems– Potential liability risks associated with utilizing City

Attorney less

• Phone System Upgrade (carried over from FY 2012-13)

• Labor Negotiations as current MOU’s expire June 30, 2014

• City Attorney RFP• Information Technology RFP

Administration FY 2013-14 Budget Highlights

25

Finance Department

FinanceFunctional Tasks

27

• Ensure fiscal stability through long-term financial planning

• Provide internal financial support to all City functions

• Ensure accounting and financial rules followed• Fulfill all State Controller and Grand Jury requests

for payroll data/reports• Analyze projected expenses to ensure adequate

cash flow• Provide full spectrum of utility billing customer

service • Oversee internal controls

FinancePerformance Measures

28

• Promote use of auto pay/credit card payment options for all utility customers– Convenient, customer friendly– The way business done in 2013

• Implement “ePayables” invoice payment process– Increased efficiency– Lower costs

• Reduced training budget– Will need to find low cost/free methods for

training and updates• Reduced use of consultant services

– Elimination of property tax consultant• 12.0% Reduced expenses since FY

2010-11

Finance Changes and Impacts FY 2013-14

29

• Continue improved financial reporting:– Expanded quarterly reports

• Continue updating/modernizing reserve policies:– Special revenue and Enterprise funds next

• Explore new investment options (within City Council approved policies)

• Continue support of citywide operations through sound financial practices

Finance FY 2013-14 Budget Highlights

30

Community Development Department

DIVISIONS

Land UsePlanning

Building and

Safety

Code Enforcement

Econ DevHousing

Successor Agency

Responsibilities

Community DevelopmentFunctional Tasks

• Administration– Manage Contract Personnel– Implement Housing

Programs– Implement ED Plan

• Building and Safety– Plans examination– Permit issuance– Construction Inspection

• Code Enforcement– Prevent, Detect, &

Investigate Code Violations– NDPES Compliance– FOG Program

• Planning– Current & Advance

Planning– Entitlement processing– CEQA compliance

32

Community DevelopmentPerformance Measures

• Administration– Number of contacts made– Number of Articles

prepared– % of new B/L’s

• Building and Safety– Number of Plan Checks– Number of Permits issued– Number of Inspection

• Code Enforcement– Number of Inspections – Number of Cases Closed– % of Citizen initiated cases

• Planning– Number of entitlements

processed– Number of reports

prepared– % of Plan Checks in 7

days

33

• Changes:– Reduction of 33% in full-time staffing levels– Elimination of department Administrative support

and Permit Technician• Impacts:

– Consolidated public counter hours– Walk-ins 7:30 am to 12:00 pm– Appointments 1:00 pm to 5:30 PM

Community Development Changes and Impacts FY 2013-14

34

• 22.2% Reduction in Personnel Costs• 18.7% Reduction in Maintenance and

Operations Expenses • 20.2% Reduction in Total

Departmental Expenditures

Community Development FY 2013-14 Budget Highlights

35

Recreation and Community Services

Making a positive difference in our community by

…encouraging citizen

involvement……fostering

human development

…

…and strengthening

community through

people, parks & programs.

Recreation and Community ServicesFunctional Tasks

37

• Administration– Frontline customer service for program registration and facility reservations– Community partnerships – Staff Development

• Youth and Family Services– Recreation programming for youth, teens, & families– Teen job training– Water safety classes

• Neighborhood and Community Services– Citywide special events – Volunteer recruitment, training, and retention– Staff support to Community Activities & Beautification Committee

• Health and Wellness– Education, Safety, and Recreation contract classes– Social Services (USDA, Meals On Wheels)

• Facility Operations & Resources– Safe and Attractive spaces and activities for recreation, sports, meetings, etc.– Community shelter during disasters– Marketing

Recreation and Community Services Performance Measures

38

• Number of volunteer hours• Number of facility rentals• Number of water safety/fitness class

participants• Corporate Connection Sponsorship

Revenue • Customer Satisfaction Survey

• Elimination of 3.0 FTE– 1.0 Full-time Senior Office Assistant– 2.0 FTE Part Time Staff

• Customer Service Impacts• Central Park Staffed Hours Reduced• Elimination of Teen Afterschool Program • Contracting Pee Wee Sports• All program materials/supplies reduced

Recreation and Community Services Changes and Impacts FY 2013-14

39

• 26.6% Reduction in Personnel Costs• 15.4% Reduction in Maintenance and

Operations Expenses • 23.5% Reduction in Total Departmental

Expenditures• 11.7% Revenue Increase• General Fund Dependence Reduced

– FY 2012-13: 76.2%– FY 2013-14: 65.3%

• Most programs/services maintained

Recreation and Community Services FY 2013-14 Budget Highlights

40

Police Department

PoliceFunctional Tasks

42

• Patrol • Investigations • Traffic Enforcement/Accident Investigations• Communications and Records• Citywide Disaster Preparedness• Quality of Life Programs and Service

Police Performance Measures

43

• Response Times to Priority 1 Calls for Service (2:39)

• Part I Crimes Reported (358 -18/340)• Case Closure Rates Crimes (33%)• Number of Total Arrests (788)• Accident Investigations / Traffic

Enforcement (193-63)• Citizen/Internal Complaints (IA’s)• Overtime Costs (How managed)

• Researching Feasibility to Outsource Dispatch Services –Closed Front Counter

• New CAD and Records Management System (Spillman) –Increased Efficiency/Accuracy

• Reorganization-Management Analyst/ASB Sgt –Outsource Disaster Preparedness

• Suspension of K-9 Program-Increased reliance on Mutual Aid

Police Changes and Impacts FY 2013-14

44

• Reduction in Crossing Guard Contract Costs– $8,000-Cypress– Shared costs: $4,000-AUHSD, $4,000-Centralia

• Reduction in Annual records system Maintenance Fees ($65,000)

• Realization of RNSP Asset Seizure Funds– Est.$160,000 for FY 2013-14

• A Potential Cost Savings by Outsourcing Dispatch ($50,000- $100,000)

• Suspension of K-9 Program ($6,500)

Police FY 2013-14 Budget Highlights

45

Public Works Department

Public WorksFunctional Tasks

47

• Administration– Manage Contracts– Administration of field and office operations– Customer service– Employee Administration

• Engineering– Private Development Review– Project Management of CIP– Construction Inspection– Utility Management and Inspection (SCE, Time Warner, So Cal Gas, etc.)– NPDES Compliance– Traffic Safety Committee

• Maintenance– Block Walls, Sidewalks, Graffiti, Parks, Street Trees and Medians, and Street Lighting

maintenance– Street Repairs, Traffic Signals, and Traffic Control maintenance– Facilities Maintenance

Public WorksFunctional Tasks

48

• Water– Treatment– Distribution– Water Billing– Customer Service Inquiries

• Sewer– Management of the sewer maintenance contract

services– Management and Inspections of contract services

Public WorksPerformance Measures

49

• Respond to and eradicate 95% of graffiti complaints within 72 hours of receiving notice (Council goal = Maintain quality of life)

• Identify and apply for at least one grant award funding source for a street repair project by June 30, 2014 (Council goal = Balance the budget)

• Continuously improve the overall pavement condition Citywide and minimize claims to the City due to damaged infrastructure (Council goal = Maintain high public safety level)

Public Works Changes and Impacts FY 2013-14

50

• Changes:– Reduction of Maintenance Worker from Full-time to 27

hours per week• Impacts:

– Graffiti and miscellaneous aesthetic duties response time may increase

– Potholes and miscellaneous potential liability items response time may increase

– Less staff for events such as La Palma Days, 4th of July run, etc.

– Less staff for night and weekend rotation for on-call emergency duties

Public WorksFY 2013-14 Budget Highlights

51

• 32.5% Reduction in Personnel Costs for one Maintenance Worker

• Maintain budgets the same as FY 2012-13 even with increase in State requirements/mandates

Capital Improvement Program• $2.86 million proposed for FY 2013-14:

– Arterial and Residential Rehabilitation projects

– Water and Sewer improvements • Measure M, Gas Tax, Water Fund, Sewer

Fund, and Capital Outlay Reserve (COR) funding sources– COR funded with $400,000 transfer from

General Fund

CIP Summary by Project TypeFY 2013-14 and FY 2014-15

Project FY 2013-14 FY 2014-15

Arterial Streets $375,000 $900,000Residential Streets 655,000 355,000Water Improvements 535,000 465,000Sewer Improvements 525,000 525,000Community Center and Parks

175,000 0

Facilities 595,0000 140,000

Total: $2,860,000

$2,385,00053

Budget Schedule• Study Session #3: May 15

• Budget “Question and Answer”: May 21

• Public Hearing and Anticipated Budget Adoption: June 4

City Council and Public Comments and Questions

City of La Palma Proposed Budget OverviewFiscal Year 2013-14May 7, 2013