The URL can be used to link to this page

Home My WebLink About02 - Presentation - - 6/8/2021FY 2021-22 PROPOSED OPERATING AND CAPITAL BUDGET STUDY SESSION June 8, 2021 CHARTING THE PATH TO RECOVERY FY 2021-22 PROPOSED BUDGET On June 1, 2021, City Council requested feedback to address the following: •Options to reduce the use of Declared Disaster Reserves; •Reduction in overall spending in the Proposed FY 2021-22 General Fund Budget; and •Alternatives to proposed headcount changes REDUCE THE USE OF THE DECLARED DISASTERS RESERVE DECLARED DISASTERS RESERVE •March 2020, worldwide pandemic declared by the President, California Governor and City of Costa Mesa •Between April 2020 and June 2020, Council authorized up to $10.3 million of Declared Disasters Reserve to offset the projected revenue loss caused by the pandemic •FY 2019-20, timely and aggressive cost containment plan resulted in a balanced budget, no need to use reserves •March 2021, the American Rescue Plan signed, thus allotting $26.3 million of Federal assistance to help offset revenue losses and cover emergency expenses incurred thru 12/24 •Current FY 2020-21 Budget projections indicate City may not need to dip into reserves to close year in balance. DECLARED DISASTERS RESERVE •FY 2021-22 Proposed Budget contains use of up to $3.2 million in Declared Disaster Reserve if needed •City Council requested options to minimize the use of $3.2 million in Declared Disasters Reserve •Staff recommends reducing the General Fund transfer to the Capital Fund by $2.8 million by: Reconsidering $1.5 million for Police Shooting Range in mid-year; and Transfer of Citywide Street Improvements to the Gas Tax Fund of $0.9 million. •Lastly, staff recommends Transfer In to General Fund from Capital Fund from unused funds COMPLIANCE WITH CAN FOR CAPITAL FUNDING •To achieve compliance with the CAN, the $2.8 million debt service payment for the Lions Park Projects will be allocated to total capital spending as allowed by the Municipal Code FY 2021-22 PROPOSED BUDGET (REVISED) The Proposed General Fund Budget totals $151.6 million, a $14.9 million, or 11.0% increase from the FY 2020-21 Adopted Budget. FY 2021-22 PROPOSED BUDGET (WITHOUT RESERVES) •The Revised Proposed General Fund Budget totals $151.6 million, a $14.9 million, or 11.0% increase from the FY 2020-21 Adopted Budget for expenditures. •Essentially a difference of $2.8 million from the Proposed Expenditure Budget of $154.4 million •In addition, the FY 2021-22 Proposed Budget for Revenue increased by $400k from $151.2 million to $151.6 million •This proposal achieves a balanced budget without the use of the Declared Disasters Reserve •No other cuts or revisions are needed for budget balance ESTIMATED FUND BALANCE (in millions) Fund Balance Category FY 2018/19 Audited FY 2019/20 Audited FY 2020/21 Estimated Committed Declared Disasters $14,125 $14,125 $14,125 Self-Insurance 2,000 2,000 2,000 Economic Reserves 7,500 9,000 9,000 Assigned Compensated Absences 4,892 5,037 5,037 Police Retirement 1% Supplemental 2,297 2,365 2,365 Section 115 Trust 1,750 1,750 1,750 Non-Spendable 280 362 362 Unassigned 20,451 18,825 18,825 Total Fund Balance $53,295 $53,464 $53,464 DETAILED HEADCOUNT REVIEW (FULL-TIME AND PART- TIME) POLICE DEPARTMENT FIRE AND RESCUE DEPARTMENT INFORMATION TECHNOLOGY DEPARTMENT DEVELOPMENT SERVICES DEPARTMENT PUBLIC SERVICES DEPARTMENT PARKS AND RECREATION CITY MANAGER’S OFFICE CITYWIDE CONVERSION REQUESTS Department FTE $ City Manager (0.13)$19,531 Parks &Community Services 0.06 6,504 Police Department 0.50 35,963 Fire and Rescue Department 1.00 147,700 Development Services Department 1.00 136,949 Public Services Department 0.50 56,948 Citywide Total Reclassifications 2.93 $403,595 DECREASE THE OVERALL HEADCOUNT PROPOSED Reduction of 112 FTE, 18% FY 2021-22 PREFERRED OPTION AS CONTAINED IN THE BUDGET Department FTE Change $ City Manager’s Office 0.88 $288,999 Parks and Community Services 1.06 $126,504 Information Technology 2.00 $290,000 Police Department 0.50 $35,963 Fire and Rescue 1.00 $147,700 Development Services 1.00 $136,949 Public Services 3.50 $541,633 Grand Total 9.94 $1,567,748 Reduction of 112 FTE, 18% FY 2021-22 PROPOSED BUDGET Positions FY 20/21 Amended FY 21/22 Proposed Incr / (Decr) Full Time Equivalent 512.00 530.00 18.00 Part Time Employees FTE’s 129.92 121.86 (8.06) Grand Total 641.92 651.86 9.94 Reduction of 112 FTE, 18% STAFFING LEVELS FROM FY 2009-10 TO FY 2021-22 PROPOSED -13% Full-Time Positions Only ALTERNATIVE #1: NO NEW POSITIONS AND NO CONVERSIONS FROM PART TIME TO FULL TIME Department FTE Change $ City Manager’s Office (0.88)($288,999) Parks and Community Services (1.06)(126,504) Information Technology (2.00)(290,000) Police Department (0.50)(35,963) Fire and Rescue (1.00)(147,700) Development Services (1.00)(136,949) Public Services (3.50)(541,633) Grand Total (9.94)($1,567,748) ALTERNATIVE #1: CHALLENGES •Excess number of vacancies due to ongoing recruitment and retention issues. •Delays in permit and plan check processing, and continued backlog of two to four months. •Complaints from residents and businesses regarding delays in permit processing. •Delays in implementing City Council priorities. •Sporadic availability of staff due to part time scheduling. •High turnover as part time staff obtain other employment. •Lack of succession planning in key positions. •Losing key institutional knowledge due to high turnover. •Delays in CIP project implementation. •Lost grant and other funding opportunities. •Insufficient staff to achieve day-to-day workloads and special projects or initiatives. ALTERNATIVE #2: FUND CERTAIN “KEY” FULL-TIME POSITIONS Position Title FTE General Fund Other Fund Arts Specialist $120,000 1.00 IT Manager (New)*210,096 1.00 Assistant City Manager 269,468 1.00 Active Transportation Coordinator 175,346 1.00 Total $774,910 2.00 2.00 *Option #2 includes one Information Technology Manager in lieu of the Program Analyst II and Network Administrator, therefore reducing request by 1.0 FTE Savings of $792,838 ALTERNATIVE #3: FUND ALL FULL-TIME REQUESTS ONLY Position Title FTE General Fund Other Fund Arts Specialist $120,000 1.00 Program Analyst II 150,000 1.00 IT Manager*210,096 1.00 Assistant City Manager 269,468 1.00 Active Transportation Coordinator 175,346 1.00 Senior Management Analyst 145,504 1.00 Associate Engineer 163,835 1.00 Total $1,234,249 4.00 3.00 (no part-time to full-time conversions) *Option #3 includes one Information Technology Manager in lieu of the Program Analyst II and Network Administrator, therefore reducing request by 1.0 FTE Savings of $333,499 ALTERNATIV E #4: FUND ALL REQUESTS EXCEPT Position Title $General Fund Other Fund Rationale Fiscal Impact of All Requests $1,567,748 Arts Specialist (120,000)(1.00)Year 2 of Plan Program Analyst II (150,000)(1.00)IT Manager position most critical Network Administrator (140,000) IT Manager 210,096 Fire Protection Specialist (52,964)(0.25)Allows for EMS Specialist and one other FPS to be converted to full-time Senior Management Analyst (145,504)(1.00)This position can be revisited at mid-year; however, capital project delays are likely Associate Engineer (163,835)(1.00)This position can be revisited at Mid-Year; however, capital project delays are likely Total $1,005,541 (1.25)(3.00) Savings of $562,207 SOCIAL EQUITY BUDGETING THROUGH A SOCIAL EQUITY LENS The City is committed to improving the quality of life of its residents by creating equity for all the residents in the community through an inclusive budgetary process that supports programs and services to meet community needs. •Recognize the value of community partnerships and support their mission by working collectively on programs and services. •Amass resources to invest in new programs that better meet the community needs and evolve to increase equity •Prioritize social equity initiatives in all areas of the City. •Fund the future we are trying to create. FY 2021-22 Proposed General Fund Revenue Estimates FISCAL YEAR 2021-22 PROPOSED GENERAL FUND REVENUES BUDGET (IN MILLIONS) Revenue Category FY 18/19 Actuals FY 19/20 Actuals FY 20/21 Projections FY 21/22 Revised Proposed FY 20/21 %Incr/ (Decr) FY 19/20 %Incr/ (Decr) Property Tax $42.9M $45.2M $47.3M $49.5M 4.9%9.5% Sales Tax 66.0 57.0 59.5 61.0 2.5%7.0% Transient Occupancy Tax 8.6 6.6 3.8 5.6 47.8%-15.2% Miscellaneous Revenues 27.4 27.6 25.0 25.5 2.0%-7.6% Subtotal Revenues 144.9 136.4 135.6 141.6 4.4%3.8% Measure Q:Cannabis 3.0 Transfers In (ARP)1.2 7.0 Total Revenues 145.0 137.6 135.5 151.6 11.9%10.2% CHARTING THE PATH TO RECOVERY Maintain and enhance the City’s infrastructure, facilities, equipment, and technology EQUIPMENT REPLACEMENT FUND •Staff recognizes a cash flow deficit in the Equipment Replacement fund used by Departments to purchase Fleet vehicles. •Staff recommends to transfer $2.2 million from undesignated General Fund, fund balance for immediate action. •Staff will prepare a three to five year plan to address the fund balance shortfall and have a strategy in place in all future vehicle acquisitions. CHARTING THE PATH TO RECOVERY Next Steps NEXT STEPS •June 15 Public Hearing Fall 2021: •Propose a long-term strategic plan for the Equipment Replacement Fund; and •Five-Year Plan update in the First Quarter of FY 2021 -22. FY 2021-22 PROPOSED BUDGET CALENDAR QUESTIONS? OPTION #1: ONLY FUND PREVIOUSLY DEFUNDED FTES Department Position Title FTE Fire and Rescue Firefighters 4.00 Finance Sr. Administrative Analyst 1.00 Development Services (8.4) Plan Checker 1.50 Building Official 1.00 Plan Checker Engineer 1.00 Code Enforcement Officer 2.25 Permit Processing Specialist 0.75 Office Specialist II 0.18 Assistant Planner 0.75 Information Technology Vacant Position 1.00 Public Services (4.0) Maintenance Services Manager 1.00 Engineering Technician III 1.50 Assistant Engineer 1.00 City Engineer 0.50 Total Cost Amount: $1.8 million Total FTE 17.43 (American Rescue Plan Eligible) CITYWIDE CONVERSION REQUESTS: OPTIONS •Option 1: Reduce the following position requests: •Option 2: Reduce the City Manager’s Contingency by $403,595 to support funding the position conversions without increasing the budget; essentially eliminates budget flexibility for operations during the fiscal year Position Title $FTE Arts Specialist ($120,000)(1.00) Program Analyst II (150,000)(1.00) Network Administrator (140,000)(1.00) IT Manager (6 months)105,048 1.00 Fire Protection Specialist (52,964)(0.25) Senior Management Analyst (145,504)(1.00) Total ($503,420)(3.25)