RPVCCA_SR_2013_06_01_03_Draft_BudgetCITY OF
MEMORANDUM
4o RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
.HONORABLE MAYOR &CITY COUNCIL MEMBERS
DENNIS McLEAN,DIRECTOR OF FINANCE &a
INFORMATION TECHNOLOGY
JUNE 1,2013
DRAFT FY13-14 BUDGET _(1
CAROLYN LEHR,CITY MANAGER ~
Project Manager:Kathryn Down~~Reputy Director of Finance &Information
Technology W
RECOMMENDATION
1.Review the draft budget document;and
2.Provide direction to Staff regarding any changes to the draft document.
DISCUSSION
Process and Timeline
On March 19,2013,the City Council provided direction regarding various budget policy
issues.On April 30,2013,the City Council conducted its Hybrid Zero-Based Budget Menu
exercise to build the working draft of the FY13-14 budget.
The purpose of this agenda item is for the City Council to review the draft budget
document,and provide additional direction regarding the draft FY13-14 budget.Any
modification directed by the City Council will be incorporated into the document in
preparation for the City Council's public hearing on June 18,2013 to adopt the FY13-14
budget.
Staff introduced the draft 2013 Five-Year Capital Improvement Plan (2013 CIP)to the City
Council on April 30,2013,including proposed projects for FY13-14.Although the City
Council briefly discussed the 2013 CIP,further discussion ofthe 2013 CIP is expected as a
part of the June 1,2013 agenda.
Summary of Draft Budget
Total City-wide revenue,including all funds of the City and the Improvement Authority,is
3-1
DRAFT FY13-14 BUDGET
June1,2013
Page 2 of 3
expected to be $33.4 million for FY13-14 (excluding inter-fund transactions).The proposed
City-wide spending plan is expected to be $33.5 million.
The General Fund is the operating fund of the City,and accounts for roughly two-thirds of
the City-wide budget.A summary of the proposed FY13-14 General Fund budget follows:
Excess General Fund Reserve,June 30,2013 701,987
Expenditures (19,693,245)
Transfer TOT to CIP (3,679,700)
Transfer for Residential Street Rehab (1,873,414)
Other Net Interfund Transfers (141,700)
Change in General Fund Reserve Policy Le~1 (34,886)
iiR~~;~i·nii,fiiFMnl~"!~~~lj)~[f~i~IJlig:!j:i~9~!m1,~;;f)~~f;f~j:i:;~~~l~~.'
The proposed budget includes one-time uses of the Excess General Fund Reserve at June
30,2013 totaling $0.7 million;including a traffic sign compliance survey,storm water permit
requirements,fencing at City facilities,and installation of security cameras.
City Council direction from the April 30,2013 Menu Exercise resulted in an Estimated
Excess General Fund Reserve at June 30,2014 of $83,018.The $13,732 presented
above reflects the addition of a Deputy Director of Public Works (as approved by City
Council on May 7,2013)and a revision of the employee benefits calculation after the April
30 th workshop.However,it does not include the $5,226 reduction of the draft budget for
Community Grants directed by City Council on May 21,2013.The draft budget document
presented with this agenda item reflects a $50,000 allocation for Community Grants.The
revised allocation of $44,774 will be included in the bUdget document presented to City
Council on June 18,2013.
Draft Budget Document
The draft budget document for FY13-14 was provided to the City Council in a stand-alone
binder separate from the agenda binder on May 16,2013,and is available to view on the
City's website or at the public counters at both City Hall and Hesse Park.The document
includes information for the following fiscal years:
•FY09-10, FY10-11,and FY11-12 actual results;
•FY12-13 revised budget;and
•Draft FY13-14 budget.
The document contains an overview section that includes the following:
•Profile of the City;
•Glossary of terms;
• A summary of the proposed FY13-14 City-wide budget;
•Descriptions of funds;
•Descriptions of revenue sources;3-2
DRAFT FY13-14 BUDGET
June 1,2013
Page 3 of 3
•The chart of accounts;
• A new Financial Analysis &Economic Outlook section;and
•Summary of City Personnel.
The draft 20 13 Five-Year Capital Improvement Plan has been included in the document as
an appendix.
Finance Advisory Committee (FAC)Recommendations
As a result of its review of the draft 2013 Five-Year Financial Model on April 17,2013 and
May 8,2013,the FAC prepared recommendations for the City Council's budget
deliberations.The FAC Memorandum to the City Council titled "Recommendations re the
City's Prqposed Budget"dated May 8,2013 is attached to this Staff Report (see
Attachment A).
Staff agrees with the following recommendation made by the FAC regarding Grants to
Charitable Organizations:
liThe FAC has Gonsidered the additional information presented at the April 30,2013
Budget Workshop with respect to the General Plan and the practices of other cities
on the peninsula.We agree that some programs which provide direct public benefits
may be placed in a separate category.We do,however,stand by our previous
recommendation to eliminate the grant program.
Staff "generally"agrees with the recommendation and comments made by the FAC
regarding Outside Consultants.However,Staff offers the following clarification.Nearly
three-quarters of the amount cited by the FAC ("in excess of $2 million")is attributable to
two "out-sourced"operating programs,Legal Services and Information Technology
Professional Technical,with proposed FY13-14 budgets in the amounts of $880,000 (plus
$165,000 for special counsel)and $373,000 respectively.Staff offers the reminder that
as a contract city,many of the consultants utilized provide essential city services such as
legal representation,grant writing,engineering,geotechnical review,and
preparation/update of legally required planning documents.
Staff "generally"agrees with the recommendation and comments made by the FAC
regarding Security Cameras.However,Staff offers the following clarification.No
competitive bid process has been conducted;and the budget estimate is based upon an
expectation that security cameras would be provided to the City,rather than purchased.
Services would include the cost of all equipment,remote connectivity and 24/7 security
monitoring by the provider.
Current Attachment:
A -Finance Advisory Committee Memorandum dated May 8,2013
Previous Attachment:
Separate Binder provided <;m May 16,2013 -Draft FY13-14 Budget Document
3-3
Attachment A
MEMORANDUM
To:
From:
Date:
Subject:
Rancho Palos Verdes City Council
Finance Advisory Committee
May 8,2013
Recommendations re the City's Proposed Budget
At its April 17,2013 and May 8,2013,meetings,the Finance Advisory Committee (FAC)
reviewed Staff's Draft 2013 Five-Year Financial Model and provided comments and
recommendations to Staff concerning both the model and its accompanying Summary.
The FAC does not feel that it would be appropriate to attempt to micromanage the efforts
of the City's professional staff or to quibble over proposed minor individual
expenditures.The City Manager and her staff are responsible for,and are intimately
familiar with,the day-to-day operations of the City and are in the best position to
determine the proper allocation of resources to the needs ofthe City.
We have,however,looked at the proposed budget from the perspective of citizens of the
City and would like to provide the Council with the following recommendations,
observations and thoughts:
1.Grants to Charitable Organizations.The FAC has considered the additional
information presented at the April 30,2013 Budget Workshop with respect to the General
Plan and the practices of other cities on the peninsula.We agree that some programs
which provide direct public benefits may be placed in a separate category.We do,
however,stand by our previous recommendation to eliminate the grant program.As
stated in our prior memorandum,we assume that the charities previously selected to
receive grants are worthwhile organizations which make a positive contribution to our
society and community.But we do not believe that it is appropriate (a)to find (as the
council is being asked to do this year)that the current UUT and Golf Tax rates continue
to be "necessary"revenue sources,or (b)to accept Staff's statement that we do not have
funds "sufficient funds to finance all of the City's infrastructure needs",while giving
taxpayer dollars to charities.
2.Outside Consultants.The FAC believes that our City's professional staff does
an outstanding job in all areas.Nevertheless,the current budget includes provisions for
substantial amounts (in excess of $2 million)to be paid to outside advisors and
consultants (including attorneys).
3-4
Attachment A
a.We recognize that in some cases,these expenditures may be for unique
services that do not readily fit within the areas of expertise of our existing staff.
But it is our recommendation that consideration be given to reducing some
amount of our City's reliance on outside services.]'Where and how'this
recommendation might best be implemented is a decision that can best be made
by the City Manager as was done last year when we suggested a reduction in the
budget for legal services.Again,the point is that savings of some dollars here
might better be spent on,e.g.,infrastructure projects.
b.FAC believes that the budget items for the Leadership Academy and for
Leadership &Succession Consulting ($13,000 and $20,000)should be eliminated?
Both those who have attended the Leadership Academy and the City Manager
believe that staff,City Council Members and commission or committee members
could provide the same benefits that the Academy provided without additional
cost (we note that the City's existing commissions and committees meet without
having meals).Similarly,we believe that City staff can provide Leadership &
Succession Consulting Services without looking to an outside organizational
psychologist.
3.Security Cameras.FAC has not independently investigated this item,and we
don't know if multiple bids were obtained,but in our view,the expense to initiate and
install eight security cameras that the City wouldn't even own (at $5,000 per camera)
appears too high.We hope that the bid process will result in a reduction of this amount.
We understand that a portion of the IT expenses are going to be put out to bid.
We understand that the Council has already tentatively reduced these numbers.
2
3-5