HomeMy WebLinkAbout- - Changes to FY2012-13 Preliminary Budget - 6/19/2012r f
MEETING DATE: JUNE 12, 2012 ITEM NUMBER:
SUBJECT: CEO RECOMMENDED CHANGES TO FY 2012-2013
PRELIMINARY BUDGET
DATE: JUNE 11, 2012
FROM: OFFICE OF CHIEF EXECUTIVE OFFICER
PRESENTATION BY: THOMAS R. HATCH, CEO
BOBBY YOUNG, DIRECTOR OF FINANCE & IT
FOR FURTHER INFORMATION Thomas R. Hatch @ (714) 754-5328
CONTACT:
RECOMMENDATION:
It is recommended that the City Council:
1. Listen to public input and the Study Session presentation;
2. Provide any comments and/or final suggestions;
3. Direct staff to conduct a Community Meeting on the Budget on Thursday, June
14, 2012; and
4. Direct staff to schedule the adoption of the Budget for June 19, 2012.
BACKGROUND:
The preliminary budget for FY 2012-2013 has been presented to the City Council and
the community. The City Council has held several Budget Study Sessions as it relates
to the details in the Budget. The General Fund Budget still has a shortfall of
$1,191,716. This staff report is the CEO's final recommended changes to the FY 2012-
2013 budget to bring the General Fund into balance. The Budget includes the entire
Budget allocations and the changes as requested by the City Council throughout the
Budget development process.
Attachment A is a summary of the final recommended changes to the General Fund
Budget. The details of the changes are provided below in the staff report.
On May 29, 2012, the City Council finalized the recommended changes to the Capital
Improvement Budget for the next year. Attachment B of this report includes a summary
of the final changes. The detail of these changes is also summarized in the staff report
below.
ANALYSIS:
The staff report includes four key sections. The first section is a summary of the
difficult changes the City has to make to manage our budget after the State eliminated
redevelopment agencies and other changes to traditional funding sources. The second
is a summary of the elimination of several positions and the addition of two key
positions. The third is the suspension of the in-house street rehabilitation program.
The final section is a summary of the Capital Improvement Program (CIP) budget
changes as directed by the City Council.
Reductions Related To State Elimination of Redevelopment Agencies:
The State of California has eliminated redevelopment agencies. This decision by the
State has had enormous implications for every city that had any kind of redevelopment
operations. Most cities have had layoffs or are in the process of laying off employees to
deal with the immediate loss of revenue. In Costa Mesa, this has immediate impacts to
our reoccurring revenue. Due to the dissolution of redevelopment agencies statewide,
the City is no longer able to allocate City salary expenses of staff who worked on
projects and activities for the Costa Mesa Redevelopment Agency. In FY 11-12, these
salaries represented approximately $659,323.
In addition to the elimination of redevelopment agencies, the City is also enduring more
impacts including:
• State Health and Safety Code monitoring;
• Creation and maintenance of redevelopment successor agency activities;
• Creation and maintenance of redevelopment Oversight Board;
• Reduction in funding from federal grants for Home and Community Development
Block Grant;
• Creation and maintenance of the Costa Mesa Housing Authority;
• Creation of supportive housing development/strategy; and
• Reductions in Neighbors For Neighbors Program and single family rehabilitation
program;
The Housing and Community Development Division had to make reductions to
accommodate the loss in reoccurring funding to support redevelopment activities and
other reductions to funding sources. The CEO is recommending the elimination of
three and '/2 vacant positions including the Neighborhood Improvement Manager, 1.5
Management Analyst positions (General Fund absorbing the '/2 position) and an Office
Specialist II position. The General Fund will also be absorbing $80,000 as it relates to
the Keyser Marston and Associates contract.
As it relates to this loss of reoccurring redevelopment funding, the CEO, based on input
from all Departments, will be recommending the elimination of four currently filled
positions on June 19, 2012 as part of the final budget staff report. This difficult decision
will require that the City layoff four City employees. The City is currently preparing the
noticing as it relates to the four employees. As required, the City will then meet and
consult with the appropriate employee associations and the employees will be given the
appropriate 30 day notice prior to the June 19, 2012, City Council meeting. The fiscal
impact of these reductions is $401,896 to the General Fund. Due to the changes in
711
redevelopment funding as well as reduction in other housing and low-income funding, a
total of seven positions will be eliminated.
Finally, the above significant changes do not deal with the potential loss in principal and
interest related to the loan between the City and the former Redevelopment Agency. It
is possible that further cuts may be needed in the next few months of approximately
$750,000.
Elimination of Vacant Positions:
To balance the budget, the CEO is proposing the elimination of several vacant positions
and the creation of two positions. The elimination of positions may result in delays in
service delivery but the financial savings is needed to balance the budget and move the
City into a better financial position. Staff will continually evaluate the ability to provide
key services and will administratively make adjustments to ensure appropriate service is
provided to the community. The following positions will be eliminated or created as
described below and the total cost of the change includes the total salary and benefit
burden for each position:
Eliminate One (1) Equipment Mechanic III Position - $96.956
An Equipment Mechanic III position will be eliminated after an internal recruitment for
the currently vacant Maintenance Supervisor position in the Fleet Operations Section is
conducted. This will maintain the full function of this section and will not result in a
layoff. The CEO will be reducing the number of total fleet vehicles by approximately 20
this year which will also help reduce the workload of the fleet maintenance staff.
Eliminate One (1) Maintenance Worker Position - $71,623:
A vacant Maintenance Worker position will be eliminated in the Facilities Maintenance
section. The workload will be distributed to other Facilities Maintenance personnel.
There may be some delays in work orders or requests as a result of the loss of this
position. Staff will continue to evaluate the level of service to determine if any changes
need to be made in the future.
Eliminate One (1) Assistant Planner Position - $95,506:
An Assistant Planner position is scheduled to be vacant in the next two weeks. The
position will be eliminated and the workload distributed to other Planning Division
personnel. This may result is some delays in getting work completed in this service
area. Staff will continue to evaluate the level of service to determine if any changes
need to be made in the future.
Create One (1) Code Enforcement Officer Position - $79,967:
There is a significant need in the community for additional resources to manage the
workload related to code enforcement. Specifically, the Neighborhood Improvement
Task Force continues to achieve successes but needs dedicated assistance related to
documenting code enforcement cases and ensuring that important issues get
immediate attention so they can be resolved as soon as possible. This position will
help meet the increasing demand of the Code Enforcement Section of the Building &
Safety Division.
9
Eliminate Four (4) Custody Officer Positions - $87,970 Per Position/$351,88 0 Total
Less $222,000 in New Costs:
The Police Department has been operating with four vacant Custody Officer Positions
of the total eleven authorized. The CEO is proposing to eliminate these four positions.
It is also proposed to increase the overtime account by $172,000 and the part-time
account by $50,000. It is likely that not all of the overtime and part-time funds will be
necessary but will provide sufficient funding to ensure adequate resources for Jail
Operations pending the outcome of legal issues concerning outsourcing.
Create One (1) Code Enforcement Officer Position (PD) - $79,967:
There is a need for the Police Department to have a Code Enforcement Officer
assigned directly to the Department. This will assist will the general workload of the
Department but will also improve efficiency as it relates to documenting code related
problems with enhanced communications between police personnel and this new code
enforcement position. This should result in better support to police related activities
while not overly burdening the Code Enforcement Section in the Development Services
Department.
The above changes result in a savings of $234,031 and a reduction in staffing of 5
positions.
Suspension of In -House Street Rehabilitation Program:
The Street and Storm Drains section of the Maintenance Division of Public Services
implements an annual in-house residential paving program that results in a total of 10 to
15 residential streets getting complete rehabilitation on an annual basis. In addition,
this section is responsible for addressing pothole repair, minor overlay of isolated
damaged pavement sections, and the cleaning of catch basins as needed. Another
function of the group is the pickup of abandoned large items left in the public right of
way. The current staffing level for this program includes eight (8) full-time positions.
Three (3) Senior Maintenance Worker positions from the Street and Storm Drain
Section will be eliminated saving $221,139. As this will eliminate Public Services' ability
to continue the in-house residential street paving function indefinitely, the Department
will also eliminate a portion ($278,400) of the amount proposed for asphalt purchase
under account number 510600 - Maintenance and Construction, but will leave $50,000
for all of the materials related to continuing pothole repair. Also to be eliminated is
$56,250 currently proposed to contract pavement grinding for residential street
rehabilitation, from account number 525900 — Streets Alleys and Sidewalks. Personnel
currently working in these positions will be moved to fill current vacancies in other
sections in the Maintenance Services Division, resulting in no layoffs. As mentioned,
this direction will eliminate the in-house residential street paving program. With the
remaining staff, the section will be fully dedicated and focused on pothole repair, large
item pick-up and storm drain cleaning.
For FY 2012-2013, the saving for the suspension of part of this program is $555,789
and a reduction of 3 positions.
4
At its May 29, 2012 City Council Study Session, the City Council provided staff final
recommendations to include as part of the FY 2012-2013 Budget and can be seen on
Attachment B. Some of the projects and priorities to be included in the FY 2012-2013
Budget are (partial list with all listed on Attachment B):
Citywide Alley Program
Citywide Drainage Master Plan/Improvements
Citywide Sidewalk Improvements
Library Upgrades
Sports Field Master Plan
Westside Improvements
Harbor Bike Trail Improvements
At the May 29th presentation, staff had determined that an amount of $2.5 million in
one-time funding could be available without further impacts to the General Fund. The
CEO's final recommendations provide funding for all of the projects that the City
Council had requested be funded in FY 2012-2013.
FISCAL IMPACT:
The General Fund Budget is currently in a deficit position by $1,191,716. With the
changes outlined above and the elimination of 15 positions, the Budget is now
balanced. The June 19, 2012 Budget Staff Report will include a full detailed breakdown
of the fiscal impact of the FY 2012-2013 Budget.
CONCLUSION:
The final recommended changes are proposed for the FY 2012-2013 Budget and this
staff report summarizes the changes. This Study Session provides an additional
opportunity for input and suggestions for the preliminary budget.
THOMAS R. HATCH
Chief Executive Officer
ATTACHMENT A FY 2012-2013 Budget Executive Summer
ATTACHMENT B CIP Budget Recommended Changes
5
ATTACHMENT A
FY 12-13 Budget - Executive Summary
Estimated Revenues
101,174,935
Appropriations
(98,941,426)
Transfer to SLEF
(50,000)
Transfer of ABLE to CIP
(2,400,000)
Transfer to CIP
(190,000)
(2,590,000)
Contribution to CM United
Non Departmental
(100,000)
Budget for Problem Properties
Non Departmental
(500,000)
(600,000)
Agreement with Keyser Marston & Associates
Development Services
(80,000)
Contribution for Retiree Medical Liabilities
(50,000)
Remaining budget surplus
(55,225)
Deficit
(1,191,716)
Reductions related to loss of RDA allocations:
Layoff of Four (4) Full Time City positions
401,896
(4)
Neighborhood Improvement Manager
-
(1)
Management Analyst
(1)
Office Specialist II - Housing
(1)
Subtotal
401,896
(7)
Elimination of vacant positions:
Equipment Mechanic III
96,956
(1)
Maintenance Worker- Facilities
71,623
(1)
Assistant Planner
95,506
(1)
Add: Code Enforcement Officer
(79,967)
1
Custody Officer
87,970
(1)
Custody Officer
87,970
(1)
Custody Officer
87,970
(1)
Custody Officer
87,970
(1)
Increase Overtime - Jail
(172,000)
Increase Part Time - Jail
(50,000)
Add: Code Enforcement Officer
(79,967)
1
Subtotal
234,031
(5)
Reduction of costs to balance the budget:
Street Rehab Program
Salaries - Vacant Positions
Senior Maintenance Worker
74,758
(1)
Senior Maintenance Worker
74,758
(1)
Maintenance Worker
71,623
221,139
(1)
Maintenance and Operations
Asphalt
278,400
Grinding of streets
56,250
334,650
Subtotal
555,789
(3)
Budget Savings
1,191,716
(15)
Difference
-
City Council - Capital Improvement Project Initiatives
Mil
no
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funded
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Total
Annual
Need
Need
FY 2012-13
Preliminarily
Staff
Other CityCouncil Priorities
Included
Recommended
Annual Citywide Maintenance - Continual
1 Streets
2 Alleys
46 500,000
9,300 000
9,985,386
3 Master Planllm rovements
15,700,000
16 500
1,400,000
920,000
480,000
4 Modifications/Park Maintenance
20 000,635,500Subtotal
500 000
500 000
98,700
g CiTy Council Initiatives -Multi Year1des4000,2S
ati
Unfunded Liability
224,000
500,0003
Reimbursement Unfunded Liability
35,000,4hment
of GF Fund Balance
30 000
5 hment of Egwp Replace Fund Balance
5,000,000
1,000,000 -
142,6786get
Contingency
-
1 000 000
1,000 000
7 Youth Sports - CM United
1,000,000
100,000
100 000
8 Capital Program for Trees
535,500
76500
39,000
_
Subtotal
299,535500
3,676,500
One Time Capital Projects
1 Sidewalks -CIP 49
510 000
100,000
100,000
2 Park Improvements - CIP #22,23,24,25 26 31
-
3 Library Upgrades Master Plan
20,000 000
100,000
559,250
4 Sports Fields
-
100,000
Master Plan
3,800,000
1 000,000
300 000
5 Westside Improvements CIP #3
2 500 000
250,000
250,000
6 Problem Properties
-500,000
5 000 000
1,000,000
7 Harbor Blvd Bike Trail Improvements CIP #2
-
360,000
8 Fairview Park Connector Trail - CIP #28
-
500,000
-
360,000
9 Historical Society Wrought Iron Fence-CIP#29
-
80,000
-
500,000
10 _Lions Park Improvements
1 300 000
40,000
11 West 19th St. Street Improvements
-
110,000 -
-
60,000
12 Fairview Park Master Plan
24 970 000
1,248,500
110,000
13 Harbor Blvd Improvements - CIP #6
4 100 000
540 000
14 Replacement of Fve Station #1
6 000,000
442,000
15 Council Chamber Eqwpment Upgrade
1,000,000
16 Neighborhood Entry Monument Signs
80,000
17 Intl Signage
_-
18 Harbor Blvd Metlian Improvements
1 100 000
_
19 Cabrillo St. Street Improvements-
300,000
20 Terminal Way Street Improvements
200,000
_
21 Placentia Ave. Median Improvements
1,500,000 -
22 Coun ide 800 MHz System
Subtotal
66,880,000
11,210,500
_
Total Initiatives
$ 465,115,500
$ 27,087,000
$ 14,281,814
$
3,400,000
Funding Needed in General Fund
$
600,000
Funding Needed via Transfer From General Fund
$
2,590,000
Funding Available in CIP Fund Available Fund Balance
$
210,000
Mil
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