RPVCCA_CC_SR_2012_06_05_06_FY_2012-13_Budget_Meeting_3CITY OF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:.
SUBJECT:
REVIEWED:
Staff Coordinator:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCI~
DENNIS McLEAN,DIRECTOR OF FINANCE &INFORMATION «!;!:J
TECHNOLOGY
JUNE 5,2012
FISCAL YEAR 2012·13 BUDGET MEETING 3 (Supports 2012 City
Council Goal of Government Efficiency,Fiscal Control,and
Transparency),.....,.(\
CAROLYN LEHR,CITY MANAGER \JY--
Kathryn Downs,Deputy Director of Finance &Information
Technology
RECOMMENDATION
1.Provide direction to Staff regarding any final adjustments to the draft FY12-13
budget;and
2.Direct Staff to prepare a resolution to adopt the City's FY12-13 budget on June 19,
2012,that includes Staff's proposed adjustments to the draft FY12-13 budget and
the proposed spending plans for all other funds of the City.
EXECUTIVE SUMMARY
Based on direction from the City Council during Budget Meeting 2,Staff is proposing a
balanced budget for FY12-13 that includes enhancements to Public Safety,other projects
to support the City Council's 2012 goals,and maintaining current programs and services.
During Budget Meeting 3,the City Council is being asked to:
~Review the draft 2012 Capital Improvement Plan;
~Review the draft 2012 Five-Year Financial Model;and
~Provide direction for any final adjustments to the draft FY12-13 budget.
6-1
FISCAL YEAR 2012-13 BUDGET MEETING 3
June 5,2012
Page 2 of 4
BACKGROUND
General Fund
On May 15,2012,the City Council conducted its Zero-Based Budgeting Menu exercise.
The exercise resulted in a draft FY12-13 General Fund spending plan that was $274,863 in
excess of resources (see Attachment A).
To account for additional expenses identified since Budget Meeting 2 and to create a
balanced draft FY12-13 General Fund budget,Staff proposes the following adjustments.
1 Minor corrections to estimates
Add Proposition A Purchase from Rolling Hills
2 ($60K @ 70 cents)
Redevelopment Agency dissolution administrative
3 allowance
4 Estimate for Labor Attorney services
Restore the deputy resources to the current
contract level +30%of a traffic enforcement
5 deputy and a bicycle patrol
Human Resources Manager (use part-time
6 consultant vs.full-time employee for FY12-13)
FY12-13 Temporary vacancies for Assistant
7 Planner &Building Inspector II
8 Second Tier PERS savings for vacant positions
Partial year savings for vacant positions that will
9 not be filled by July 1st
9,468
(42,000)
(125,000)
(100,000)
178,000
14,427
192,570
41,084
154,853
1.As more information has become available during the budget process,Staff has
made several minor corrections to both revenue and expenditure estimates (net
total of $9,468).
2.The City of Rolling Hills has offered to sell its Proposition A money at the current
market rate of 70 cents on the dollar.Although the Proposition A budget is
balanced for FY12-13,it may be prudent to take advantage of the offer today to
recognize $18,000 of savings for the future.
3.The Redevelopment Agency dissolution law allows for an annual administrative cost
allowance of $250,000 for the Successor Agency (staff time,legal fees,office
expenses,meeting expenses,insurance,etc.).Staff has recently received
information from the County that the distribution of property tax for the period July
through December 2012 will not be sufficient to provide for the administrative
allowance.Staff believes that property tax will be available for the administrative
allowance for the period January 2013 through June 2013.A half-year
administrative allowance is equivalent to $125,000.
4.As noted during the May 15,2012 budget meeting,the draft budget did not include
a provision for services from a labor attorney; which is currently estimated to cost
about $100,000.
6-2
FISCAL YEAR 2012·13 BUDGET MEETING 3
June 5,2012
Page 3 of 4
5.Staff proposes that the City refrain from adding a Crime Prevention Deputy at this
time,remove the $178,000 expenditure from the draft FY12-13 budget,continue to
monitor crime activity,and make use of additional services noted below in the Public
Safety discussion.
6.In an effort to minimize the downtime of the Human Resources function,the City
Manager plans to utilize the part-time services of an experienced Human Resources
consultant,who can be available almost immediately;versus hiring a full-time
Human Resources Manager for FY12-13.This temporary substitution is expected
to produce a one-time savings of $14,427.
7.As there is no indication that Community Development permitting activity will return
to prior levels during FY12-13,the City Manager proposes temporary vacancies for
two Community Development positions;which will result in a one-time savings of
$192,570.
8.Tne currently vacant employee positions are expected to be filled in the future with
employees who will earn the second tier of pension benefits,with a lower employer
cost to the City.This permanent pension contribution savings is expected to be
about $41,084.
9.The City Manager does not expect to fill vacant employee positions by July 1st.The
City will enjoy a one-time savings totaling $154,854 for the partial-year vacancies of
these positions.
These proposed changes would result in a balanced FY12-13 budget with excess
resources of $48,540.The City Council is advised that the temporary reductions in
workforce will affect Staff's ability to deliver services and respond to requests.
Public Safety
On May 15th
,the City Council added a 30%allocation of one Traffic Enforcement Deputy
and a Bicycle Patrol for Western Avenue and Palos Verdes Drive South to the draft FY12-
13 budget.These two additions are expected to increase the Sheriff's patrol by 965
hours per year.A total of 1,920 no-cost volunteer patrol hours per year have also been
identified;as well as other no-cost service enhancements described in Attachment B (to be
provided as late correspondence).Prior to these additions,the City's FY12-13 contract
with the Sheriff was expected to include 33,380 hours of service.These enhancements
increase patrol efforts by 2,885 hours or 8.6%.
Staff encourages the City Council to limit the Public Safety budget enhancement to these
two additions for FY12-13;and review whether a Crime Prevention Deputy should be
added for FY13-14,after assessment of the efficacy of the two additions.The Crime
Prevention Deputy would be added at a discounted "growth"rate of about $178,000 for
FY12-13;however,the full cost of this added deputy would increase to $250,000 in 18
months.Staff is concerned that the addition of this Crime Prevention Deputy would
contribute to a structurally unbalanced budget in the future.
Citywide Budget
The proposed FY12-13 budget for the City's other funds are included in the FY12-13
column of the draft 2012 Five-Year Financial Model,which is also included on this agenda.
6-3
FISCAL YEAR 2012-13 BUDGET MEETING 3
June 5,2012
Page 4 of 4
These funds are restricted by either City Council action,law,or outside agencies.The
spending plans are driven primarily by the availability of resources,and reflect a status quo
level of maintenance and programs.A summary of each fund is included in Attachment C.
Reserve Policy
The estimated status of the City's various Reserve Policies are summarized below.
50%of budgeted expenditures
One year of Portuguese Bend
Street Maintenance road maintenance 526,400 611,234
Habitat Restoration Emergency projects 50,000 50,000
Habitat Res oration Future maintenance 85,125 135,488
Subregion One Developer endowment 750,000 758,607
Capital Improvement
Projects Emergency or Future Projects 3,000,000 11,106,362
Capital Improvement FEMA reserve for FY04-05
Projects winter storms 215,209 215,209
Equipment Estimated replacement cost of
Replacement assets held 1,833,141 1,750,919
84,834
50,363
8,607
8,106,362
(82,222)
Staff expects to propose adjustments to the Equipment Replacement Charge calculation
during the next two-year budget process in 2013,to ensure that the Equipment
Replacement Reserve is at policy level.
ALTERNATIVES
1.Direct Staff to prepare a budget resolution for June 19 th based on the direction
provided during Budget Meeting 2,which would result in an unbalanced General
Fund budget of $274,863.
2.Provide Staff with modifications to the proposals in this report,to be used for
preparation of a budget resolution for June 19th
•
3.Direct Staff to prepare for a 4
th Budget Meeting to be held on June 19th
,with the
goal of adopting the City's FY12-13 budget on July 3rd
.
Attachments:
Attachment A -Results of Zero-Based Budgeting Menu Exercise,May 15,2012
Attachment B -Public Safety Enhancements for FY12-13 (to be provided as late
correspondence)
Attachment C -Summary of Proposed FY12-13 Citywide Budget
6-4
Results of Zero-Based Budgeting Menu Exercise
May 15,2012
Attachment A
Increased Expenditures (more than 5%&
$25,000)
Public Works Right of Way Inspections 55,000 55,000 55,000 55,000 55,000 55,000 55,000
Catch Basin Maintenance 32,000 32,000 32,000 32,000 32,000 32,000 32,000
Building &Safety Plan Checks &Inspection 65,000 65,000 65,000 65,000 65,000 65,000 65,000
Discretionary Items
Salaries &Benefits for City Council Members 100,000 100,000 100,000 100,000 100,000 100,000 I 100,000
Aircraft Noise Consultant 15,000 15,000 15,000 -15,000 15,000
Departmental Meetings &Conferences 31,500 31,500 31,500 31,500 31,500 31,500 I 31,500
Holiday Reception 3,000 3,000 3,000 3,000 3,000 3,0001 3,000
Community Leaders'Breakfast 2,000 2,000 2,000 2,000 2,000 2,000
Mayors'Luncheon 1,200 600 600 600 600 600 I 600
Mayor's Breakfasts &City Council Meetings 11,800 8,000 8,000 8,000 8,000 8,0001 8,000
Chambers of Commerce &PVP Coordinating
Council Memberships 3,300 3,300 3,300 3,300 3,300 3,300 3,300
Community Outreach Office Expenses 4,500 4,500 4,500 4,500 4,500 4,500 4,500
City Grants to Non-Profit Entities 60,500 60,500 60,500 60,500 60,500 60,500 20,000
Leadership &Succession Consulting 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Planning Commissioners'Stipends 12,208 12,208 12,208 12,208 12,208 12,208 12,208
Recreation Advertisements 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Recreation Printing &Binding 5,100 5,100 5,100 5,100 5,100 5,100 5,100
Part-Time Salaries &Benefits to Support
Recreation Special Events 8,200 8,200 8,200 8,200 8,200 8,200 8,200
Palos Verdes Symphonic Band Performance 800 800 800 800 800 800 800
Shakespeare by the Sea Performance 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Recreation Special Event Sound Equipment
Rental 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Whale of a Day Parking 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Fourth of July Celebration 25,000 25,000 25,000 25,000 25,000 25,000 25,000
Special Event Portable Toilet &Lighting Rental 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Special Event Supplies 28,200 28,200 28,200 28,200 28,200 28,200 28,200
PVIC Museum Curator 5,100 5,100 5,100 5,100 5,100 5,100 5,100
Annual Docent Appreciation Luncheon 3,100 3,100 3,100 3,100 3,100 3,100 3,100
Page 1 of2
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Results of Zero-Based Budgeting Menu Exercise
May 15,2012
Attachment A
Current Service Levels (of a discretionary
nature)
City Council Meetings &Conferences 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Community Newsletter Postage &Printing 20,500 20,500 20,500 20,500 20,500 20,500 20,500
RPV TV Station Manager &Other Production
Services 53,000 53,000 53,000 53,000 53,000 53,000 53,000
RPV TV Part-Time Salaries &Benefits 28,900 28,900 28,900 28,900 28,900 28,900 28,900
RPV TV Membership to NATOA 100 100 100 100 100 100 100
RPV TV Supplies &Minor Equipment 14,000 14,000 14,000 14,000 14,000 14,000 14,000
Recreation Administration Office Expenses 13,100 13,100 13,100 13,100 13,100 13,100 13,100
Park Ranger Services 166,000 166,000 166,000 166,000 166,000 166,000 166,000
PVIC Operating Expenditures 152,175 152,175 152,175 152,175 152,175 152,175 152,175
REACH Operating Expenditures 36,700 36,700 36,700 36,700 36,700 36,700 36,700
Proposals to Support City Council 2012 Goals
Crime Prevention Deputy 178,000 178,000 178,000 178,000 178,000 178,000 178,000
Traffic Enforcement Deputy Reallocation 74,000 74,000 74,000 74,000 74,000 74,000 74,000
Bike Patrol on Western Avenue &PVDS 30,500 30,500 30,500 30,500 30,500 30,500 30,500
Public Safety Outreach to Residents &
Businesses 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Federal Lobbyist 48,000 -- - - - -
Portuguese Bend Dewatering Well 75,000 75,000 75,000 75,000 75,000 75,000 75,000
Organizational Performance Audit 25,000 50,000 50,000 50,000 50,000 50,000 50,000
Expenditures Greater Than $250,000
General Liability &Other Insurance 602,000 602,000 602,000 602,000 602,000 602,000 602,000
City Attorney Legal Services 880,000 880,000 880,000 650,000 880,000 880,000 880,000
Sheriff Services 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000
IT Services 332,000 332,000 332,000 332,000 332,000 332,000 332,000
Landscape Maintenance at City Parks 250,000 250,000 250,000 250,000 250,000 250,000 250,000
Open Space Fuel Modification 281,000 281,000 281,000 281,000 281,000 281,000 281,000
Residential Street Project (transfer to CIP)1,575,000 1,575,000 1,575,000 1,575,000 1,575,000 1,575,000 1,575,000
Totals $9,558,683 9,531,283 9,531,283 9,286,283 9,531,283 9,531,283 9,473,783
Page 2 of2
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Summary of Proposed FY12-13 Citywide Budget Attachment C
Charges to the General
Equipment Replacement IFund.
Transfers from the
General Fund in past
Building Replacement !years.
Residential street project ($1.6 million,ratified by
City Council on May 15th);$250,000 arterial
median project (noted above);$220,000
improvement to Ryan Park south entrance road;
$555,000 of improvements to the California These projects are listed in the FY12-13 column
Coastal Trail and Gateway Park primarily funded of the two-year budget document (see pages 235-
with grant money;$35,000 Shoreline Park erosion 239).One additional project is being proposed
control;$223,000 improvement to Ryan Park (Ryan Park restrooms),and is described in the
restrooms;and $50,000 to improve compliance draft 2012 Capital Improvement Plan on this
with ADA.agenda.
Beautification
Capital Improvement
Projects (CIP)
Recycling fees from
waste haulers.
Transfers from other
funds (both General
Fund and restricted
monies),grants and
interest earnings.
Maintenance and improvement of arterial
medians,and beautification grants to
neighborhood associations.
Maintenance and replacement of equipment and
software that has been capitalized by the City
(original costs of more than $5,000).
None proposed.
The proposed FY12-13 budget includes a
$250,000 use of the accumulated fund balance for
a9ditional arterial median improvements.
The proposed FY12-13 budget is balanced.
The ending fund balance is expected to be
$826,936 at June 30,2013,and may be used for
improvements that extend the life of a City
bUilding (e.g.roof replacement),or construction of
new or replacement buildings.
Centralized accounting for employee benefits,
which include the City's pension contribution,
Charges to the General payroll taxes (FICA),employee health insurance,
Fund (about 97%)and workers compensation insurance,and the City's
restricted funds (about contribution to employees'retirement health
Employee Benefits ~.savings accounts.The proposed FY12-13 budget is balanced.
Street Maintenance
i
IHighway Users Tax and
I.transfers from other
Ifunds.
Centralized accounting for right-of-way
maintenance activities;including pavement repair,
roadside maintenance,weed abatement,tree
trimming,street sweeping,median maintenance,The proposed FY12-13 budget is substantially
sidewalk maintenance,and maintenance of Palos balanced (proposed use of about $20,000 of
Verdes Drive South (PVDS)in the landslide area.accumulated fund balance).
Page 1 of 4
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Summary of Proposed FY12-13 Citywide Budget Attachment C
1972 Act Landscape &
Lighting District
EI Prado District
Community
Development Block
Grant (CDBG)
Transfers to the Street Maintenance Fund for right·
of-way maintenance,and overhead charges for The proposed FY12-13 bUdget is substantially
administration that are revenue to the General b{3lanced (proposed use of about $15,000 of
Property assessments.IFund.accumulated fund balance).
Maintenance of facilities at the entrance to the EI
Property assessments.!Prado neighborhood.IThe proposed FY12-13 bUdget is balanced.
Home Improvement Program loans and grants to
property owners with low and moderate income
Federal grants.Ihouseholds.IThe proposed FY12-13 budget is balanced.
1911 Act Street Lighting
District I Property assessments.
Refuse hauler fees and
Waste Reduction Igrants.
Maintenance of street lights,including traffic
signals.
Activities that increase recycling and promote
recycling within the City,including the Source
Reduction and Recycling Element program.
The proposed FY12-13 budget includes an
approximate $112,000 use of accumulated fund
balance,per the City Council's plan to reduce the
accumulation of property owner assessments.
The proposed FY12-13 budget includes an
approximate $30,000 use of accumulated fund
balance.
AB 2766 fees from the
Air Quality Management
Air Quality Management IDistrict (AQMD).
Proposition C
Proposition A
Public Safety Grants
Measure R
Proposition C sales tax.
Proposition A sales tax.
i
ICOPS revenue from the
state.
IMeasure R sales tax.
One-time purchase of 2 clean-air replacement
vehicles for the City's fleet.
Transfer to the Street Maintenance Fund for
maintenance of PVDS in the landslide area.
Contribution to the Palos Verdes Peninsula
Transit Authority.
Transfer to the General Fund to subsidize the
CORE deputy team as part of the Sheriff's
contract.
Partial funding of improvements to arterial streets
as part of various park projects.
Page 2 of4
The proposed FY12-13 budget includes an
approximate $10,000 use of accumulated fund
balance.
The proposed FY12-13 budget is substantially
balanced.
The proposed FY12-13 bUdget includes an
approximate $9,000 use of accumulated fund
balance.
The proposed FY12-13 budget is balanced.
The proposed FY12-13 budget is balanced.
6
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Summary of Proposed FY12-13 Citywide Budget Attachment C
Fund Name <<><..•.•...•..••....~......................
The proposed FY12-13 bUdget includes an
approximate $40,000 use of accumulated fund
balance.Beginning in FY13-14,the excess fund
General Fund transfers,balance will be depleted and the General Fund will
and mitigation fees &need to fund the entire preserve management
Habitat Restoration penalties.Open space preserve management.cost ($133,500 vs.$90,000 in FY12-13).
General Fund transfers
'and interest earnings on Maintenance of open space and other right-of-way
the $750,000 areas within Subregion One (adjacent to The proposed FY12-13 budget is substantially
Subregion One endowment.Oceanfront Estates).balanced.
Measure A assessments
from the Los Angeles
County Regional Park &Transfer to the General Fund for partial funding of
Measure A Open Space District open space fuel modification.The proposed FY12-13 budget is balanced.
Property assessments The proposed FY12-13 budget includes an
Abalone Cove Sewer and General Fund approximate $7,000 use of accumulated fund
District transfers.Abalone Cove sewer system maintenance.balance.
The ending fund balance is expected to be
I
$159,658 at June 30,2013,and must be used for
the construction of a cultural arts building or
Ginsburg Cultural Arts Private restricted additional purchases of open space with
Building donation.None proposed.permission of the donors.
The ending fund balance is expected to be
$409,579 at June 30,2013,and must be used for
Donor Restricted Private restricted exhibits and other facilities at Pt.Vicente
Contributions donations.None proposed.Interpretive Center.
i There is no FY12-13 proposed budget.The
Quimby IDe",eloper fees.None proposed.estimated June 30,2013 fund balance is $478.
The ending fund balance is expected to be
$836,322 at June 30,2013,and must be used for
Affordable Housing Developer fees.None proposed.affordable housing projects within the City.
I
The proposed spending plan utilizes $50,000 of
Environmental Excise
ITransfer to CIP to improve ADA compliance.
accumulated fund balance,leaving an estimated
Tax IDeveloper fees.$305,777 at June 30,2013.
Page 3 of 4
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Summary of Proposed FY12-13 Citywide Budget Attachment C
Bikeways
Water Quality &Flood
Protection
TDA Article 3 grant
money.
User fees.
Transfer to CIP for Residential Street Project.
Maintenance and improvement of storm drain
facilities.Proposed FY12-13 projects include
about $325,000 of storm drain lining,a $485,000
project near the lower switchbacks of Palos
Verdes Drive East,and $50,000 for the
Marguerite Open Channel.
Page 4 of 4
The proposed FY12-13 budget is substantially
balanced.
The proposed FY12-13 budget includes an
approximate $33,000 use of accumulated fund
balance.
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