RPVCCA_SR_2010_05_22_04_Draft_Budget_FY_2010-11CITY OF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
HONORABLE MAYOR AND MEMBERS OF THE C~COUNCIL
DENNIS McLEAN,DIRECTOR OF FINANCE &IT ~Ii/}
KATHRYN DOWNS,DEPUTY DIRECTOR OF FINANCE &If/
DATE:MAY 22,2010
SUBJECT:DRAFT FY10·11 BUDGET
REVIEWED:CAROLYN LEHR,CITY MANAGER Cl5Z--.
RECOMMENDATION
Review the Draft FY1 0-11 Budget,including Staff's evaluation of services,and provide Staff
with direction in anticipation of the Public Hearing and adoption of the FY1 0-11 Budget on
June 15,2010.
DISCUSSION
Staff's Proposed FY10-11 Budget
The starting point for the development of Staff's Proposed FY1 0-11 Budget is the second
year of the two-year budget document (the "Draft Budget Document")that was published in
2009.Staff proposes a number of budget modifications to the Draft Budget Document and
has prepared a reconciliation worksheet (see Attachment A)to arrive at Staff's Proposed
FY10-11 Budget.Many of Staff's proposed modifications,such as changes to revenue
estimates,do not require decisions to be made by the City Council.If adopted as
presented,Staff's Proposed FY10-11 Budget would result in an increase of the General
Fund Reserve of $8,156 and estimated excess General Fund Reserves of about $1.7
million at the end of FY10-11.A summary reconciliation of the Draft Budget Document
prepared a year ago with Staff's Proposed FY10-11 Budget follows:
Draft Budget Document
Staff's Proposed Modifications
Terranea TOT
Lower Hesse/Grandview Park Imnl'n"t:>mt:>r,te>
Evaluation of Services
20,061,600 (17,913,374)
(348,400)145,182
2,000,000
(2,188,472)(40,246)
251,620 48,402
2,000,000
Council member Misetich requested a Staff analysis of the possibility of adopting a zero-
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based budget process.Taking this a step further,Staff has developed and implemented a
hybrid of the zero-based budget process for FY1 0-11,on a trial basis Staff performed an
evaluation of services,and developed an aggregate list of more than 40 projects and
services for the City Council's consideration of whether or not to include them in draft FY1 0-
11 budget.The targeted projects and services are not legally mandated,do not affect
revenue streams,and do not have a direct impact on the health and safety of the City's
residents.Staff has also included certain projects and services that were considered
"budget policy issues"in past years,such as dedicated traffic enforcement,for further
consideration.Staff met with Council member Misetich prior to the Budget Workshop and
provided him with an overview of the evaluation of services as a possible alternative to a
zero-based budget.
Menu (for City Council Deliberation)
The targeted projects and services identified by Staff for City Council deliberation have
been incorporated into the "Menu",which will be the primary tool used to memorialize City
Council decision making during the Budget Workshop (see Attachment B).Each Council
Member has been provided the Menu in Excel prior to the Budget Workshop to develop
their own budget planning ideas and facilitate the decision-making process.
To prepare for the decision process,Staff has removed each Menu item from Staff's
Proposed FY10-11 Budget to arrive at the "Baseline"for City Council to use as a starting
point in its decision-making process (see Attachment A).The net activity of revenue,
expenditures and transfers (totaling $4,550,067)is the Baseline for City Council to use
while building its draft FY1 0-11 budget.From the Baseline starting point,the City Council is
expected to consider adding Menu items into the spending plan as it builds its draft FY10-
11 Budget.
Generally,the Menu items are presented in the order of the Budget Document.Staff has
numbered the Menu items in this staff report and the Menu to improve the City Council's
navigation.There are several Menu items that are not included in Staff's Proposed FY10-
11 Budget,which are described near the end of this staff report.
Menu Items Included in Staff's Proposed FY10-11 Budget
1.Lock-in FY09-10 Payments in Lieu of Salary Increases $97,000
For FY09-10,the City Council approved a merit pool of 3.5%to be distributed to
employees as one-time,discretionary payments in lieu of a permanent salary increase
("PI LSI").The estimated cost of converting the PILSI to a permanent salary increase
during FY10-11 is $97,000.
2.Set Salary Ranges at 75 th Percentile of Survey Results $20,000
Based on a salary survey conducted in 2002,the City Council elected to set salary
ranges at the 75th percentile of ranges for comparable positions at comparable cities.
Staff has recently completed a salary survey of FY09-1 0 salary ranges for comparable
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positions at comparable cities and again recommends adjusting salary ranges to the
75 th percentile.City Council's consideration of the 2010 salary survey is currently
scheduled for the May 18,2010 agenda.
Increasing the salary ranges does not have a fiscal impact for every employee.Only
those employees who are currently at the bottom of their salary range will receive an
increase to the adjusted bottom of their respective salary range,and those employees
who are at the top of their salary range will be eligible for future salary increases they
would not otherwise receive.The estimated FY1 0-11 fiscal impact of setting the salary
ranges at the 75th percentile of survey results is about $20,000.
3.Cost of Living Allowance (1.9%)$83,000
Beginning in FY08-09,the City Council established an automatic cost of living
allowance (COLA)to all employees based on the change of Consumer Price Index
(CPI)for the twelve months ended March.The March CPI for 2010 was 1.9%for Los
Angeles-Riverside-Orange County.The estimated fiscal impact of providing a FY1 0-11
COLA of 1.9%to all employees on July 1,2010 is $83,000.
4.Employee Salaries,Merit Increase (1.6%)$54,000
As a point of reference,the City Council established a merit pool of 3.22%for salary
increases in FY08-09.Staff recommended a merit pool of 3.5%during the FY09-10
budget process.However,the City Council established a 3.5%PILSI pool during FY09-
10 (as noted above),and directed Staff to conduct a salary survey.Staff recommends
a 1.6%merit pool for FY10-11,more than a 50%reduction compared with the two
previous fiscal years.The fiscal impact of providing a FY10-11 merit increase pool of
1.6%is $54,000.
5.Administrative Interns -New $82,200
Currently,the Draft Budget Document provides for 1 part-time administrative intern
working 1,040 hours per year.Filling this position with graduate students has proven
successful.Staff believes that 3 part-time graduate students could be effectively
utilized to leverage the time of full-time staff for special projects in community outreach,
emergency preparedness,and risk management,as well as research and support work
for the City Council's Tactical Goals.These part-time positions do not receive benefits
(e.g.health insurance,paid leave,pension,etc.).The estimated cost of hiring additional
administrative interns is $82,200,based upon 2 additional graduate student interns
working about 1,500 hours each year.
6.Part-Time Wages -New $33,960
In order to leverage full-time staff resources,from time to time the City has used part-
time staff,often drawing from the pool in the Recreation and Parks Department,to
perform administrative support duties.This has proven to be highly productive and
cost-effective in the past.Therefore,Staff is proposing to slightly increase the pool of
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part-time employees to help balance the workload and maximize staffing efficiencies.
The estimated cost of increasing the pool of part-time staff is $33,960.
7.Employee Bonus Pool (1.5%)$83,100
The City Council has traditionally provided a bonus pool based on 1.5%of employee
salaries to be used at the City Manager's discretion for outstanding achievements.The
bonus pool is used to make one-time bonus payments,and is not an addition to
employee salaries.The bonus pool has been provided since FY94-95,and has been
included in the Draft Budget Document.The estimated cost of providing this bonus pool
is $83,100.
8.Contributions to Employee Retirement Healthcare Accounts $78,300
Based upon the recommendation of the City's pension advisor and the Finance
Advisory Committee in 2007,the City Council recently established a defined
contribution benefit program in which the City makes a discretionary contribution to
each employee's retirement health savings ("RHS")account each pay period.The
FY10-11 employer contribution would be based upon $51.90 each pay period.The
RHS plan was established as an alternative to providing post-retirement health
insurance coverage.City employees provide their own contribution to their RHS
account each pay period based upon 1%of their compensation.The estimated cost of
making the employer contribution for FY1 0-11 is $78,300.
9.Charter City Proposal-One-Time $50,000
The City Council has set a workshop to be conducted on June 29,2010 to consider a
ballot initiative to become a charter city.This one-time budget allocation of $50,000
would provide a placeholder for consulting services to analyze the issues associated
with becoming a charter city,as well as assisting staff with the public outreach process.
This amount does not include the cost of the election,if the Council decides to proceed
with a ballot measure.This additional amount would need to be added to the budget at
a later date,depending on the type (special versus general)and timing of the election.
10.Organizational Development -New $20,000
Staff recommends including an additional $20,000 in the budget for the retention of a
consultant to help the City organization with targeted recruitment efforts,employee
development and training,troubleshooting workplace issues,and mentoring programs.
11.City Newsletter $11,000
In FY09-10,the City published two newsletters and mailed a copy to each resident
household.This was a decrease from prior years when the City published the
newsletter on a quarterly basis.The newsletter includes City announcements and
informational articles.This information is also provided on the City's website and sent
out via email list serve.The estimated General Fund cost of printing and mailing this
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newsletter twice annually is $11,000.
12.Community Leaders'Breakfasts $4,200
Generally,two Community Leaders'Breakfasts are hosted each year for 50 to 80
attendees to provide community outreach about important current topics affecting the
City's residents.The estimated cost to provide a catered continental breakfast twice
annually is $4,200.
13.Holiday Reception $8,300
The City Council hosts an annual Holiday Reception for volunteers,members of
committees and commissions appointed by the City Council,community leaders and
Staff in December each year.The event includes catered appetizers and decorations
for about 200 attendees at a cost of $8,300.
14.Proclamations,Tiles &Pins $6,500
An amount of $6,500 is included in the Draft Budget Document to provide proclamations
that acknowledge individuals and organizations in the community,service tiles to
departing Committee members,and lapel pins to Committee members and Staff.
15.Grants to Non-Profit Organizations $53,500
The Draft Budget Document includes $53,500 to provide grants to eleven local non-
profit organizations that serve the City's residents.Grantees are comprised of
organizations that provide social services that are beyond the scope of services
provided by the City,such as the Peninsula Seniors and the Palos Verdes Library
Annex.
16.RPV TV $85,000
The City operates a cable television station at a cost of about $85,000 annually to the
City's General Fund.Station programming includes topics of local interest that would
not be broad casted on commercial television channels,public service announcements,
and community outreach;as well as being a communication tool in the event of an
emergency.
17.Sheriff Regional Traffic Control $145,367
As part of the regional law enforcement contract with the Los Angeles County Sheriff,
the City pays a 60%share for a regional traffic control deputy.The expected cost of the
shared deputy for FY10-11 is $145,367.Discontinuing the service of the regional
deputy would require approval from the Cities of Rolling Hills Estates and Rolling Hills.
18:Sheriff Dedicated Traffic Control $242,278
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In addition to the regional traffic control deputy noted above,the City pays 100%of the
cost of a traffic control deputy dedicated to Rancho Palos Verdes.The expected cost of
the dedicated deputy for FY1 0-11 is $242,278.
19.Sheriff Regional CORE Deputies $184,816
As part of the regional law enforcement contract with the Los Angeles County Sheriff,
the City pays a 60%share for two Community Resource (CORE)deputies.The CORE
Team primarily addresses issues related to juvenile crime prevention,resolution of
neighborhood disputes,specialized patrols and quality of life issues.Beginning in
FY09-10,the CORE Team was reduced from three members to two.A discussion of
the third position is included later in this report.The City's share of the expected cost of
the two shared deputies for FY10-11 is $184,816.Discontinuing the service of the
regional CORE deputies would require approval from the Cities of Rolling Hills Estates
and Rolling Hills.
20.Park Ranger Program $115,000
On April 6,2010,the City Council approved a one-year contract with Mountains
Recreation &Conservation Authority to provide park ranger services in the City's open
space preserve.The estimated cost of these services for FY1 0-11 is about $115,000.
21.Emergency Preparedness Committee $6,700
The Emergency Preparedness Committee (EPC)has been supported by a Senior
Administrative Analyst earning overtime wages for meeting preparation and attendance.
The EPC's Work Plan for 201 0-11 is currently scheduled for City Council consideration
on the June 1,2010 agenda.The estimated annual overtime cost of $6,700 would not
be necessary if the EPC was eliminated by City Council.Regular staff time used to
support the EPC would be redeployed to other projects managed by the City manager's
Office.However,there would no longer be an advisory body to support the City's
efforts to improve emergency preparedness in the community.
22.Emergency Preparedness Newsletter $10,000
In FY09-10,based on a recommendation from the Emergency Preparedness
Committee,the City established a bi-annual Emergency Preparedness Newsletter.The
estimated annual cost of printing and mailing the newsletter is $10,000.The information
is also available to residents on the City's website,and can be updated on demand.
23.Park Site Hours $15,200
Point Vicente Interpretive Center (PVIC),Ladera Linda,and Ryan Parks are currently
open and staffed 7 days per week.Closing these facilities for 1 day each week would
result in an annual estimated savings of about $15,200 for part-time staffing.Staff's
Proposed FY10-11 Budget reflects the savings from a reduction of park site hours
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(Sunday closure for Ladera Linda,Tuesday closure for Ryan Park,and Monday closure
for PVIC).If the City Council chooses to maintain the current level of service (staffed 7
days per week),then $15,200 should be added to the Baseline while building the draft
FY1 0-11 budget.
24.Fourth of July Celebration $23,450
The Fourth of July Celebration held at Upper Point Vicente has an average attendance
of 3,000-4,000 people annually.The City's estimated annual cost of $28,800 includes
attractions,part-time wages and supplies.The cost of the event is partially offset with
an estimated $5,350 of donation revenue.Cancelling this event would result in net
savings of about $23,450.
25.Whale of a Day Celebration $11,800
The Whale of a Day Celebration held at Lower Point Vicente has an average
attendance of 3,000 people annually.Los Serenos Docents co-sponsors the event.
The City's estimated annual cost is $11 ,800 and includes part-time wages,supplies and
equipment rental.
26.Consultant Traffic Engineer $10,000
The consultant traffic engineer provides a valuable third-party opinion that assists staff
with presenting options and alternatives for traffic issues.The estimated annual cost of
this service is $56,700.This annual allocation could be decreased by $10,000,by
utilizing the traffic expertise of engineers currently on staff.However,staff time would
be pulled away from other projects managed by the Public Works Department.
27.Traffic Safety Commission $9,120
The Traffic Safety Commission (TSC)is supported by professional engineering staff
earning overtime wages for meeting preparation and attendance.The TSC's 2010-11
Work Plan is currently scheduled for City Council consideration on the June 1,2010
agenda.The estimated annual overtime cost of $9,120 would not be necessary if the
TSC was eliminated by City Council.Regular staff time used to support the TSC would
be redeployed to other projects managed by the Public Works Department.However,
there would no longer be an advisory body to support the City's efforts to improve traffic
safety,reduce traffic accidents and relieve traffic congestion.
28.Speed Radar Trailer Program $5,600
The Speed Radar Trailer Program is a low-cost tool used in combination with the
Sheriff's enforcement to calm traffic.Maintenance crews deploy the radar trailer at a
different location in the City each day at a total estimated annual cost of $5,600.
29.Oversized Vehicle &Neighborhood Parking Permit Programs $21,200
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The estimated annual cost of $33,200 includes public information,permit processing,
field reviews,sign maintenance,inspection and enforcement.The estimated annual
revenue from the sale of parking permits associated with these programs is $12,000.If
the programs are eliminated,the net savings would be about $21,200.
30.Building &Safety Technical Consultant $10,000
The estimated annual cost of hiring Building &Safety Technical Consultants is $15,000.
Services include geotechnical,engineering,drainage and other technical consulting to
help resolve compliance problems with the building code that come to the City's
attention.This allocation could be reduced by $10,000,but not completely eliminated.
A reduction of this allocation would restrict the City's ability to expeditiously address and
correct problems.
31.Code Enforcement $203,000
Expenditures associated with Code Enforcement (including 2 FTE's)are not mandated.
The estimated annual cost of this function is $203,000.Elimination of the function
would likely have an adverse impact on the City by encouraging widespread
unpermitted activities and construction;thereby impacting the quality of life and property
values.Staff strongly recommends that this program remain intact for FY1 0-11.
32.Backfill Transit Funding -One-Time $60,000
The City uses Proposition A revenue to pay its transit agency contributions to Palos
Verdes Peninsula Transit Authority and Municipal Area Express.Proposition A revenue
is a cents-per-gallon tax that has decreased to roughly 85%of historical levels.Staff is
not optimistic that revenue levels are going to return to "normal"anytime soon.With
increasing transit contributions and decreasing revenue,there is currently a structural
shortfall of about $130,000 annually for the transit program.There is an accumulated
fund balance in the Proposition A Fund that will partially offset the funding shortfall
during FY1 0-11;however,a General Fund backfill of approximately $60,000 will be
necessary to make the City's contributions during FY10-11.By providing the General
Fund backfill for one year,the City will have time to analyze options for bringing this
program back into balance prior to FY11-12.
33.Pedestrian Improvements on Hawthorne Blvd -One-Time $228,320
This project would install sidewalks on Hawthorne Blvd to connect bus stops from Crest
to Palos Verdes Drive West and improve pedestrian access along this major arterial
roadway.The project also includes the installation of access ramps compliant with the
Americans with Disabilities Act.The $1.1 million construction project is to be primarily
funded with a grant,but requires a 20%General Fund matching contribution in the
amount of $228,320.
34.Lower Hesse/Grandview Park Improvement Projects -One-Time $2,000,000
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On November 17,2009,the City Council approved a FY09-1 0 appropriation to develop
conceptual designs for Lower Hesse and Grandview Parks.Improvements to these two
undeveloped parks are estimated to cost about $2,000,000 and could include re-
grading,access and trail improvements,landscaping,and construction of recreation
facilities (e.g.playgrounds,restrooms,etc.).There is currently no restricted funding
source available for these projects (e.g.Quimby Act or other development impact fees).
Staff proposes a use of General Fund money for these projects (FY10-11 transient
occupancy tax from Terranea).
35.Hesse Park Ball Field Upgrade -One-Time $460,000
This project would re-grade the existing ball field and re-size it to softball regulations,as
well as improve drainage and construct field amenities.The estimated cost of the
project is $500,000.About $40,000 of Environmental Excise Tax (EET)money is
available for this project.The remaining $460,000 would be borne by the General Fund.
36.Subregion 1 Trail Repair -One-Time $10,000
Due to storm damage,repairs are necessary along improved public trails in Subregion 1
(adjacent to Ocean Front Estates).The estimated cost of these repairs is $10,000.The
only available funding source available is General Fund money.
Menu Items NOT Included in Staff's Proposed Budget
37.Recreation &Parks Director $182,573
The Recreation &Parks Director full-time position is currently vacant.The estimated
cost of both salary and benefits for FY10-11 would be $182,573.Staff does not
recommend filling this position at this time.
38.Sheriff CORE Program -Third Deputy Position $154,013
For FY09-10,the Peninsula cities participating in the regional Los Angeles County
Sheriff contract approved a reduction of the Community Resource (CORE)team from
three deputies to two.The original purpose of the third CORE deputy was to provide
capacity to patrol the open space areas on the south side of the Peninsula.With the
addition of the Park Ranger program,there has been no apparent service level
deterioration without the third CORE deputy.Without approval from the other cities
participating in the regional Sheriff contract,an increase of CORE services would
require the City to bear 100%of the $154,013 cost of a dedicated CORE deputy.
39.Emergency Supplies for Residents -New $10,000
The Emergency Preparedness Committee has proposed a program to provide a
subsidy for residents to purchase emergency supply kits.The estimated annual cost of
this program is $10,000.
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40.Peafowl Trapping Program $15,000
For FY09-10,the City Council approved a bUdget of $15,000 for a Peafowl Trapping
Program to reduce the number of birds in the Vista Grande neighborhood.The FY09-
10 program was successfully completed with the capture and relocation of 71 birds.
Continuation of this program for other areas of the City would require an annual
appropriation of $15,000.
41.Traffic Safety Commission Comprehensive Minutes $14,000
Comprehensive Traffic Safety Commission minutes are prepared by a consultant (a
professional minute taker)to enable the City Council to have more detailed information
about the Commission's rationale for recommendations and public input on traffic safety
issues.For comparison,staff liaisons for the Emergency Preparedness Committee,
Storm Drain Oversight Committee,and Finance Advisory Committee record action
minutes with no consulting costs to the City.The estimated annual cost for preparation
of comprehensive minutes is $14,000.
42.Los Angeles Storm Water Quality Partnership $27,500
The City currently pays a membership fee for a coalition of 8 cities that seek to improve
relationships with the Los Angeles Regional Water Quality Control Board to help
develop effective regulations for storm water mitigation.The annual cost of this
membership is $27,500.Participation in this coalition appears to be a duplication of
effort in light of the City's concurrent participation in the Jurisdiction 7 Offshore Water
Quality Monitoring program.
43.Planning Commission Stipend Increase $12,600
Currently,Planning Commission Members receive a stipend of $50 per month.The
fiscal impact of increasing this stipend to $200 per month is $12,600.
44.REACH Recreation Program $11,342
The REACH recreation program for the developmentally disabled serves about 28
participants (17 of them are current City residents).If the program were to be
terminated,the estimated net savings to the City would be $11,342 and 40%of one full-
time employee's time.If the REACH program is eliminated,Staff expects that the full-
time employee would devote time to new events and other recreational program
opportunities that could serve a broader range of residents.The REACH program is
partially funded with $26,848 of Community Development Block Grant money.If the
REACH program were terminated,the City's CDBG revenue would be reallocated to
projects to improve the City's compliance with the Americans with Disabilities Act.
Other Potential Budget Impacts
In addition to the information presented herein,there are two other items that may have an
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affect on the FY1 0-11 budget.The City may be required to pay a settlement resulting from
the Monks lawsuit.The timing of this settlement has not yet been determined,but is
expected to require a one-time payment from the General Fund Reserve.
Marymount College has circulated and submitted a petition to place an initiative on a
special election ballot during FY10-11.If the petition is successful,the General Fund will
bear the cost of the special election;which has been estimated to be about $78,000.In a
related matter,on May 4,2010,the City Council directed Staff to prepare the appropriate
resolutions that would include a provision to design a center median safety barrier along
Palos Verdes Drive East,adjacent to the proposed athletic field on the ocean-side of the
campus.Even if the City Council proceeds to approve the construction of the barrier,the
timing and cost has not yet been determined,but would likely require a one-time payment
from the General Fund Reserve matched with a $200,000 contribution offered by
Marymount.
Reserve Policies -Status Report
Although the City Council has followed an informal General Fund reserve policy for a
number of years,City Council Policy No.41:Reserve Policies,was adopted on December
2,2008.In addition to the General Fund,Policy No.41 encompasses a number of other
dedicated funds included in the City Budget.The chart below summarizes each fund's
reserve level,the estimated reserve at June 30,2011 and identifies any expected excess or
shortage.The estimates are based on Staff's Proposed BUdget for FY1 0-11.
of expenditures
One year of Portuguese Bend
Street Maintenance road maintenance 500,300 356,951
Habitat Resto ratio n Emergency projects 50,000 50,000
Habitat Resto ratio n Future maintenance 64,443 135,688
Su bregion On e Developer endowment 750,000 751,436
Capital Improvement
Projects Emergency projects 3,000,000 2,757,458
Capital Improvement FEMA rese rYe for FY04-05
Projects winte r storm s 274,430 274,430
Equipment Estimated replacement cost of
Replacement assets held 1,611,967 1,695,958
(143,349)
71,245
1,436
(242,542)
83,991
As indicated above,Staff's expects reserve deficiencies in both the Street Maintenance and
Capital Improvement Projects ("CIP")Funds.Based upon Staff's proposed revision to the
Policy described below,the reserve deficiency in the CIP Fund is expected to be
temporary.
Street Maintenance Fund
Roadway maintenance costs in the landslide area of the City have increased from about
$380,000 to about $450,000 during the last several years.Staff's Proposed FY10-11
Budget includes an additional expenditure of $50,000 to study long-term solutions to this
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constant road maintenance issue.As the reserve policy is based on one year of bUdgeted
expenditures that have increased rapidly,the actual reserve is expected to be considerably
less than the FY1 0-11 reserve level and is not expected to increase in the near future.As
part of its review of the draft 2010 Five-Year Financial Model,the Finance Advisory
Committee made the following recommendation:
The City Council should continue its reserve policy to keep one year of budgeted
expenditures for road maintenance in the landslide area on hand in the Street
Maintenance Fund.
Staff proposes replenishment of the reserve through annual expenditure savings.Staff
expects that it will take a number of years for the actual reserve to meet the reserve level,
but does not currently recommend any additional General Fund transfers to the Street
Maintenance Fund for this purpose.
CIP Fund
On September 15,2009,the City Council authorized the use $419,087 of the Emergency
Project Reserve in the CIP Fund for a contribution to the purchase of the Upper Filiorum
open space parcel.Through various expected project savings during FY09-1 0,the actual
reserve is expected to fall short of the reserve level by about $242,542.This fund
continues to earn interest on the nearly $3 million reserve.Staff recommends that this
reserve be replenished through future interest earnings and project savings.If the
proposed revision to Policy No.41 addressed below is adopted,Staff expects that the
reserve deficiency in the CIP Fund will be temporary.Even if the proposed revision to the
Reserve Policy is not adopted,Staff expects the actual reserve will meet the reserve level
within several years.
Proposed Reserve Policy Revisions
Staff has developed two proposed revisions to Policy No.41.The goal of the revisions is
to:1)to establish an annual process to consider what portion of estimated TOT revenue
that is included in the bUdget for the next fiscal year,if not the entire amount,that shall be
transferred to the CIP Fund to be set-aside and accumulated for known,high-priority,
unfunded capital projects,future unknown capital projects and significant emergency
projects (e.g.San Ramon Canyon Stabilization,and Civic Center);and 2)establish a clear
policy statement for the Water Quality Flood Protection program that user fee monies not
earmarked for known high-priority projects,repairs and maintenance should be
accumulated for future projects (e.g.San Ramon Canyon Stabilization).Staff has
underlined and used italic font to highlight the proposed revisions of Policy No.41 below:
A.General Fund
The City will maintain a minimum fund balance of at least 50 percent of
annual operating expenditures in the General Fund.This is considered the
minimum level necessary to maintain the City's credit worthiness and to
adequately prOVide for:
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1.Economic uncertainties,local disasters,and other financial hardships or
downturns in the local or national economy.
2.Contingencies for unseen operating or capital needs.
3.Cash flow requirements.
In conjunction with the preparation of the annual update of the City's Capital
Improvement Program,the Five-Year Financial Model and the proposed
budget,Staff shall make a recommendation to the City Council of the amount
of General Fund reserves that shall be transferred to the Capital
Improvement Fund reserve.
D.Water Quality Flood Protection Fund
Project spending in the Water Quality Flood Protection (WQFP)fund
fluctuates year to year.The Storm Drain User Fee is a source of funding for
these projects.To avoid a fluctuating Fee,the City will maintain retained
earnings over the life of the WQFP fee to establish rate stabilization and
provide funding for scheduled projects and maintenance,in part or in full.
Unless the City Council directs Staff otherwise,it will present the proposed revisions to the
Finance Advisory Committee and the Oversight Committee for the storm drain program at
the next scheduled meetings.Staff expects that it will forward any comments and
recommendations made by each respective committee to the City Council during late
summer.
4-13
Draft FY10-11 Budget -Reconciliation from Two-Year Document to Budget Workshop Baseline Attachment A
I Net
Staffs Adjustments to Draft FY 10-11 Budget:
Changes in revenue estimates (339,200)
Terranea transient occupancy tax 2,000,000
Pension savings (pay down of side-fund liability in FY09-10)18,050
Pension savings (payoff of side-fund liability at end of FY09-1 0,May 4th City
Council agenda)146,950
Employee salaries,merit increase (1.6%)(54,000)
Administrative interns (increase of hours)(82,200)
Part-time wages -New (33,960)
Recreation part-time wages (related to Founders Park rentals)(5,000)
Freeze Recreation &Parks Director vacancy (salary &benefits)182,573
Charter City proposal (consulting &public information)(50,000)
Organizational development (20,000)
Sheriff contract savings (2%increase vs.original estimate of 3%increase)40,000
Sheriff contract savings (reduce liability trust fund contribution from 6%to 4%)81,513
Park Ranger program (increase from original estimate of $87K to $115K annually,
based on City Council approved contract)(27,634)
Discontinue Peafowl Trapping program 15,000
Street striping (maintenance assumed from Rolling Hills Estates)(13,000)
Discontinue Traffic Safety Commission comprehensive minutes 14,000
Cancel Los Angeles Storm Water Quality Partnership (LASWQP)membership 27,500
Improved building maintenance (57,000)
Improved park maintenance (25,000)
Upper Filiorum brush removal (fire fuel modification)(25,000)
Upper Filiorum Abalone Cove Landslide Abatement District (ACLAD)dues (22,000)
Fuel costs for City Hall &Pt.Vicente Interpretive Center generators (23,000)
Reduce Code Enforcement professional services (based on historical spend)10,000
Cancel REACH recreation program (9,200)47,390 (26,848)
FY10-11 Water Quality Flood Protection subsidy unnecessary (due to prior years'
savings)160,000
FY10-11 Street Maintenance subsidy unnecessary (due to prior years'savings)175,000
FY08-09 Residential Pavement project savings (reduce FY1 0-11 funding to
capture savings)405,045
One-time return of General Fund money from the Utility Undergrounding Fund 90,000
Lower Hesse/Grandview park improvement projects (2,000,000)
Hesse Park ball field upgrade (project cost $500K,with $40K of EET funding)(460,000)
Subregion 1 trail repair (10,000)
Trump Beach telephone land line study/design (for lifeguard services provided by
the county)(20,000)
Backfill transit funding for one year (due to declining Proposition A revenue)(60,000)
Immaterial adjustments to other fund subsidies (1,577)
4-14
Draft FY10-11 Budget -Reconciliation from Two-Year Document to Budget Workshop Baseline Attachment A
Revenues Transfers Net
Items Moved to Menu for Service Level Consideration:
Lock-in FY09-10 Payments in lieu of salary increases 97,000
Set Salary Ranges at 75th Percentile of Survey Results 20,000
Cost of Living Allowance (1.8%)83,000
Employee salaries,merit increase (1.7%)54,000
Employee Bonus Pool (1.5%)83,100
Administrative interns (increase of hours)82,200
Part-time wages -New 33,960
Contributions to Employee Retirement Healthcare Accounts 78,300
Charter City proposal (consulting &public information)50,000
Organizational development 20,000
Grants to Non-Profit Organizations 53,500
City Newsletter 11,000
Community Leaders'Breakfasts 4,200
Holiday Reception 8,300
Proclamations,Tiles &Pins 6,500
RPVTV 85,000
Sheriff Regional Traffic Control (RPV 60%Share)145,367
Sheriff Dedicated Traffic Control 242,278
Sheriff Regional CORE Deputies (RPV 60%share of 2)184,816
Park Ranger Program 115,000
Emergency Preparedness Committee 6,700
Emergency Preparedness Newsletter 10,000
Consultant Traffic Engineer 10,000
Traffic Safety Commission (support staff overtime)9,120
Speed Radar Trailer Program 5,600
Oversized Vehicle &Neigborhood Parking Permit Programs (12,000)33,200
Building &Safety Technical Consultant 10,000
Code Enforcement 203,000
Park Site Hours (Ladera Linda closed Sunday,Ryan Park closed Tuesday,PVIC
closed Monday)15,200
Fourth of July Celebration (5,350)28,800
Whale of a Day Celebration 11,800
Pedestrian Improvements on Hawthorne Blvd (City 20%match)228,320
Backfill transit funding for one year (due to declining Proposition A revenue)60,000
Lower Hesse/Grandview park improvement projects 2,000,000
Hesse Park ball field upgrade (project cost $500K,with $40K of EET funding)460,000
Ocean Front Estates trail repair 10,000
4-15
Attachment B.........•I ..I I
General Fund Reserves 10,594,554 (418,872)10,175,682
Policy Threshold (50%of Expenditures)8,927,636 9,115,634.••an."~:t•
.,•
:I ;.•I "•"
Items included in Staff's Proposed Budget:
Lock-in FY09-10 payments in lieu of salary increases 1 (97,000)
Set Salary Ranges at 75th Percentile of Survey Results 2 (20,000)
Cost of Living Allowance (1.9%)3 (83,000)
Employee Salaries,Merit Increase (1.6%)4 (54,000)
Administrative Interns (increase of hours)5 (82,200)
Part-Time Wages -New 6 (33,960)
Employee Bonus Pool (1.5%)7 (83,100)
Contributions to Employee Retirement Healthcare
Accounts 8 (78,300)
Charter City proposal (consulting &public information)9 (50,000)
Organizational Development 10 (20,000)
City Newsletter 11 (11,000)
Community Leaders'Breakfasts 12 (4,200)
Holiday Reception 13 (8,300)
Proclamations,Tiles &Pins 14 (6,500)
Grants to Non-Profit Organizations 15 (53,500)
RPVTV 16 (85,000)
Sheriff Regional Traffic Control (RPV 60%Share)17 (145,367)
Sheriff Dedicated Traffic Control 18 (242,278)
Sheriff Regional CORE Deputies (RPV 60%share of 2)19 (184,816)
Park Ranger Program 20 (115,000)
Emergency Preparedness Committee 21 (6,700)
Emergency Preparedness Newsletter 22 (10,000)
Park Site Hours (Ladera Linda closed Sunday,Ryan Park
closed Tuesday,PVIC closed Monday)23 (15,200)
Fourth of July Celebration 24 5,350 (28,800)
Whale of a Day Celebration 25 (11,800)
Consultant Traffic Engineer (use qualified traffic
engineers on staff)26 (10,000)
Traffic Safety Commission (staff support overtime)27 (9,120)
Speed Radar Trailer Program 28 (5,600)
Oversized Vehicle &Neigborhood Parking Permit
Programs 29 12,000 (33,200'
Building &Safety Technical Consultant 30 (10,000)
Code Enforcement 31 (203,000)
Backfill Transit Funding (due to declining Proposition A
revenue)32 (60,000)
Pedestrian Improvements on Hawthorne Blvd (City 20%
match)33 (228,320)
Lower Hesse/Grandview park improvement projects 34 (2,000,000)
Hesse Park Ball Field Upgrade (project cost $500K,with
$40K of EET funding)35 (460,000)
Subregion 1 Trail Repair 36 (10,000)
Items NOT included in Staff's Proposed Budget:
Recreation &Parks Director (salary &benefits)37 (182,573)
Sheriff CORE Program -Third Deputy Position 38 (154,013)
Emergency Supplies for Residents 39 (10,000)
Peafowl Trapping Program 40 (15,000)
Traffic Safety Commission Comprehensive Minutes 41 (14,000)
Los Angeles Storm Water Quality Partnership 42 (27,500)
Planning Commission Stipend Increase 43 (12,600)
REACH Recreation Program 44 9,200 (47,390)26,848
Draft FY10-11 Budget 21,722,400 (18,231,268)(3,910,004)(418,872)
4-16