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HomeMy WebLinkAbout2007/03/06 Item 13 CITY COUNCIL AGENDA STATEMENT 03/06/2007,ltemll ITEM TITLE: QUARTERLY FINANCIAL STATUS REPORT FOR THE QUARTER ENDED DECEMBER 31, 2006 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $450,000 FROM THE AVAILABLE BALANCE OF THE GENERAL FUND TO THE FIRE DEPARTMENT PERSONNEL SEVICES BUDGET FOR COSTS RELATED TO OVERTIME DIRECTOR OF FINANCEIT?SURER~ INTERIM CITY MANAGER ifl SUBMITTED BY: REVIEWED BY: 415THS VOTE: YES 0 NO D BACKGROUND Section 514 (f) of the City Charter requires quarterly fiscal status reports to be filed by the Director of Finance through the City Manager. ENVIRONMENTAL REVIEW Not Applicable RECOMMENDATION That Council: 1, Accept the report as submitted 2, Approve the Resolution of the City Council of the City Of Chula Vista appropriating $450,000 from the available balance of the General Fund to the Fire Department Personnel Services budget for costs related to overtime, BOARDS/COMMISSION RECOMMENDATION Not Applicable DISCUSSION Attached for your consideration is the financial status report for the second quarter of fiscal year 2006-07, The detailed Fiscal Status Report for the quarter ending December 31, 2006, assumes that the City will continue to maintain a reserve level above the 8,0% Council general fund reserve policy, 13-1 DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by accepting this report and has determined that it is not site specific and consequently the 500 foot rule found in the California Code of Regulations section 18704.2(a)(1) is not applicable. FISCAL IMPACT The City General Fund ended the fiscal year 2005-06 with an available balance of $14.9 million or 8.8% of the operating budget. Based on updated revenue projections and the implementation of the citywide contingency plan, the general fund reserves are projected at 8.5% or $14.4 million, a slight decrease of 0.3%, or $498,702, from the prior fiscal year. The reserves were predicted to drop in the first quarter financial status report primarily because of a shortfall in development revenues. Subsequent to that report a development fee study was completed and approved on January 23, 2007. The new fee schedule becomes effective March 26, 2007. The development services departments have incorporated the new fee structure in to their projections. Since the first quarter report, the projected impact to reserves of $602,749 has been reduced to $498,702. The slight reduction in reserves is due to a number of factors the most significant being the quantification of Fire Department overtime usage. The attached report on Fire Department overtime projects that overtime usage will exceed the budgeted amount by $450,000 and therefore a general fund appropriation is requested at this time. Staff has concluded that the Fire overtime budget has been underfunded and that this increase is appropriate, as described further in the attached report. Projected General Fund Available Fund Balance General Fund Reserves July 1, 2006 14,929,410 Projected Revenues & Transfers In 166,607,702 Projected Expenditures & Transfers Out** 167,106,404 Revenues over (under) Expenditures (498,702 *Projected Available Fund Balance as of June 30, 2007 $ 14,430,708 Reserves as Percentage of General Fund Operating Budget 8.5% -Net of $1.8 million in budnet car"'overs for encumbrances and CIP ATTACHMENTS Attachment 1 - Financial Status Report Attachment 2 - Report on Fire Department Overtime Prepared by: Maria Kachadoorian, Director of Finance/Treasurer, Finance Department 13-2 Attachment 1 ~l~ ~ O1YOF (HUlA VISfA FINANCIAL STATUS REPORT Second Q.uar1Er Fiscal Year 2006-07 Prepared by the Finance Department INTRODUCTION The purpose of this report is to provide the City Council, management and the citizens of Chula Vista an update on the City's fiscal status based on the most recent financial information available. The projections presented in this report were prepared through the hard work and efforts of the various Department Heads, departmental analysts, Finance Department staff and the Office of Budget and Analysis. The City began the fiscal year with a balanced general fund budget, which included appropriations for expenditures and transfers out of $170.1 million, supported by estimated revenues and transfers in of $170.1 million. Through the end of the second quarter, Council approved a total of $1,234,823 in additional appropriations supported by additional revenues of $1,062,611 resulting in a net impact to reserves of approximately $172,212 as described in Schedule D. Overall, general fund discretionary revenues such as property taxes and sales taxes continue to be strong as projected. However, the utility users tax (UUT), franchise fees and real property transfer taxes are projected to be $1.7 million less than initially projected. This amount represents about 1.6% of general fund discretionary revenues. In addition, the development services departments are projecting a shortfall in development revenues of approximately $2.4 million in the current fiscal year. Other departmental revenues are also projected lower by $506,156 primarily within the Recreation Department due to lower than anticipated recreation class registration fees. These shortfalls in the Recreation Department will be fully offset by identified expenditure savings. SUMMARY OF PROJECTED REVENUE SHORTFALLS Net Tax Revenue Shortfalls Development Revenue Shortfalls Other Departmental Revenue Shortfalls Total $ (1,651,608) $ (2,371,875) $ (506,156) $ (4,529,639) -2.7% % of Budgeted Revenues To address the anticipated shortfalls in revenues, a citywide contingency plan has been implemented. The City went through an extensive contingency planning process, working with departments to identify expenditure savings within existing budgets to assist in mitigating impacts to the general fund reserves. The remaining impacts will be mitigated by actively managing vacant positions. It is anticipated that these changes can be implemented in the short-term with little to no impact on existing service levels. A summary of the revenue shortfalls and the anticipated savings are summarized as follows. 13-3 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 2 SUMMARY OF FISCAL ISSUES AmQunt Projected Revenue Shortfall: Tax Revenues (net) Development Revenues Other Departmental Revenues 'Mid-Year Appropriations $1,651,608 $2,371,875 $ 506,156 $ 172,212 $4,701,851 Dept Projected Exp Savings Manage Vacant Positions $ 3,558,701 $ 644,448 $ 4,203,149 Projected Impact to Reserves $ (498,702) 'Represents net impact of Mid- Year Council Approved Appropriations. GENERAL FUND RESERVES The City General Fund ended the fiscal year 2006 with an available balance of $14.9 million or 8.8% of the operating budget. Based on updated revenue projections and the implementation of the citywide contingency plan, available reserves are projected at 8.5% or $14.4 million at the end of the current fiscal year. General Fund Reserves July 1, 2006 Projected Revenues & Transfers In Projected Expenditures & Transfers Out" Revenues over (under) Expenditures 'Projected Available Fund Balance as of June 30, 2007 Reserves as Percentage of General Fund Operating Budget 14,929,410 166,607,702 167,106,404 $ (498,702) 14,430,708 8.5% "Net of $1.8 million in bud et car overs for encumbrances and CIP GENERAL FUND EXPENDITURES Total General Fund expenditures and encumbrances through December 31, 2006 were $86.0 million. Actual expenditures year to date are comparable on a quarter-by-quarter basis as reflected under the attached Schedule A. Overall, through identified departmental savings and management of vacant positions, expenditure savings of $4.2 million are projected to largely mitigate the impacts of the projected revenue shortfalls of $4.5 million. The expenditure savings have been identified as salary savings based on managing vacancies citywide, supplies and services savings and savings in other expenses. The continoencv plan has been 13-4 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 3 implemented by manaqement and is beinq monitored departmentally. Schedule A also lists the expenditures to date and projected savings by department. The Fire Department and the Office of Budget & Analysis has conducted a review of Fire overtime usage (Attachment 2). Based on year to date overtime usage, the Fire Department is anticipating budgetary overages of approximately $450,000 related to overtime. Staff has concluded that the Fire overtime budget has been underfunded and that a $450,000 increase in that budget is appropriate, as described further in the attached report. In addition, health insurance costs are anticipated to increase citywide by approximately $470,000 for the remainder of the fiscal year. At this time, any general fund impacts from the health insurance cost increases will be mitigated by reallocating existing budgets between departments as part of the year-end budget clean up, MAJOR DISCRETIONARY REVENUES Overall, the major discretionary revenues, such as sales taxes and property taxes continue to be strong, However, franchise fees, utility users tax and real property transfer tax are projected to be under budget by approximately $1.7 million or -1,6%, At this time, due to a citywide contingency plan, which has been implemented by management, no general fund impacts are anticipated due to these shortfalls. GENERAL FUND MAJOR DISCRETIONARY REVENUES Fiscal Year 2005-06 Fiscal Year 2006-07 Maior Discretionarv Revenues Actual Budaet Projected Variance % Variance 'Property Taxes $ 22,192,789 $ 26,999,041 $ 27,649,041 650,000 2.4% Sales Taxes $ 26,715,515 $ 30,997,040 $ 30,997,040 0 0.0% Franchise Fees $ 9,492,759 $ 11,368,337 $ 10,528,835 (839,502) ~7.4% ransient Occupancy $ 2,336,204 $ 2,581,975 $ 2,581,975 0 0.0% Utility Users $ 6,363,446 $ 8,030,681 $ 6,617,984 (1,412,697) -17.6% Business License $ 1,234,912 $ 1,238,340 $ 1,238,340 0 0.0% Real Property Transfer $ 2,122,860 $ 2,648,554 $ 2,035,145 (613,409) -23.2% *"State Motor Vehicle License Fees $ 18,354,839 $ 17,864,139 $ 17,864,139 0 0.0% Miscellaneous Revenues $ 1 ,602,222 $ 1 ,082,930 $ 1 ,646,930 564,000 52.1% otal $ 90,415,546 $102,811,037 $101,159,429 (1,651,6081 -1.6% "'Property Taxes in Fiscal Year 2005-06 are net of the $1.8 million state takeaway related to ERAF Ill. **In Fiscal Year 2005-06, VLF total reflects reimbursement from State due to previous takeaways. 13-5 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 4 ~ALES TAXES (BUDGET $31.0 MILLION, PROJECTED $31.0 MILLION) Sales and use tax revenue is the City's single largest discretionary revenue source, accounting for 30.6% of the total projected discretionary revenue for the General Fund in fiscal year 2006- 07. During fiscal years 2004-05 and 2005-06 sales tax revenues increased by 10.2% and 13.2% respectively primarily due to increased population and the opening of several new commercial centers in the eastern section of the City. During fiscal year 2006-07, sales tax revenues are projected to increase by 16.0% from the prior year due to the expansion of the auto park and the highly anticipated and publicized opening of the Otay Ranch Town Center Mall. Growth in sales tax revenue has averaged 7% per year over the past five years. Sales Tax Revenue $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 1997 1999 2001 2003 2005 2007 !'ROPERTY TAXES (BUDGET - $27.0 MILLION, PROJECTED $27.6 MILLION) Property taxes continue to grow Countywide, although at a slower rate than in previous years. The pace of new and existing home sales slowed dramatically and is anticipated to continue the trend of slow growth into fiscal years 2007- 08 and 2008-09 and will be reflected in the next proposed budget. Property Taxes $28,000,000 $24,000,000 $20,000,000 $16,000,000 $12.000,000 $8,000,000 $4,000,000 $0 19971998199920002001 200220032004 20052006 2007 "For comparison purposes, the property tax revenue does not reflect $1.8 million in State takeaways in fiscal year 2004-05 and 2005-06. 13-6 FINANCIAL STATUS REPORT Second Quarter RscaJ Year 2006-07 Page 5 According to the most recent County of San Diego Assessor's Office Report, assessed values in Chula Vista have increased by 15.43% for fiscal year 2006-07 compared to 20% in the 2005-06 fiscal year. Based on the updated report from the County Assessor, property tax revenues are projected to come in higher than budgeted by approximately $650,000. Growth in Assessed Value 25.00% 5.00% 20.00% 15.00% 10.00% 0.00% 1995 1997 1999 2001 2003 2005 2007 -Chula Vista -County Overall "As represented in the chart, this is the 8th straight year that the City has seen double-digit growth in assessed values. I3.EAL PROPERTY TRANSFER TAX (BUDGET $2.6 MILLION, PROJECTED $2.0 MILLION) When real property is sold, the County assesses a transfer tax. The tax rate is $1.10 per thousand multiplied by the selling price of the property. The City receives 50% of the transfer tax for sales within Chula Vista. Property transfer taxes are reflective of the housing market. Due to the significant slow down in real estate construction and the cooling of resale homes during the current fiscal year, the revenue projections are being adjusted downward by $600,000. STATE MOTOR VEHICLE LICENSE FEES (BUDGET $17.9 MILLION, PROJECTED $17.9 MILLION) The VLF revenue has gone through many changes in the past two years. The fee was initially established back in 1948 and directed to local government. The State had previously assessed a 2% of value Motor Vehicle License Fee on car registrants on behalf of local governments. During fiscal year 2003-04, the State dropped the fee from 2% to 0.67%. Except for the first three months of that year, the State back-filled this fee reduction with other State funds, keeping local government revenue whole. Beginning in fiscal year 2004-05, the local government share of VLF has narrowed. Cities continue to receive the 0.67% portion of the fee directly from the State, but this amount is now net of County realignment and administrative reductions. The State backfills the gap created by the fee reduction from 2% to 0.67% with an additional allocation of local property tax from County ERAF funds, referred to as the VLF swap. After 2006, the VLF swap will be valued at the original 2005 amount, and increased by the jurisdiction's annual growth in assessed valuation. These changes in valuation are reflected in the fiscal year 2006-07 budget and are projected to come in at budgeted levels. 13-7 FINANCIAL STATUS REPORT Second Quarter FISCal Year 2006-07 Page 6 f~ANCI!.!SE FEES (BUDGETED $11.4 MILLION, PROJECTED $10.5 MILLION) Franchise fee revenues are generated from public utility sources such as San Diego Gas & Electric (2% on gas and 1.25% on electricity), trash collection franchises (9.05% fee), and cable franchises (5% fee) conducting business within City limits. SDG&E is the single' largest generator of Franchise Fees and accounts for approximately 50% of the total franchise revenues, which are received semi-annually, in March and August. SDG&E collects the franchise fee from Chula Vista customers and through a municipal surcharge imposed on the South Bay Power Plant based on their usage of natural gas. Due to the volatility of the price of natural gas and fluctuation in usage this component is difficult to project. Trash franchise fees and cable fees are more predictable due to the fixed rates charged and the monthly and quarterly receipt of the revenues respectively. Total franchise fees received in fiscal year 2005-06 were $9.5 million, which was $457,000 less than projected in the prior year third quarter fiscal status report. At this time, we are projecting franchise fee revenues to come in at approximately $10.5 million. This is $840,000 less than budgeted in the current year due to the prior year shortfall. Staff will continue to monitor this revenue source and provide updated projections in the third quarter report. Franchise Fees .. $9.0 ~ $8.0 $7.0 :IE $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $- / \ \ .' \ 2001 2002 2003 2004 2005 2006 2007 -+- Energy ___ Trash/Cable Y!~~~~'!!{~I!~.!..A~ (BIJDGET $8.0 MILLION, PROJECTED $6.6 MILLION) The City adopted its Utility Users Tax (UUT) in 1978. The City of Chula Vista imposes a UUT on the use of telecom at the rate of 5% of gross receipts, which represents 66% of the total UUT revenues received. The UUT on natural gas services is $0.00919 per therm and $0.00250 per kilowatt on electricity services, which equates to approximately a 1% tax. UUT revenues are projected to grow using population factors and are adjusted downward to account for market saturation in the wireless telecom sector due to the shift in usage of land line telephones to cellular telephones and to internet and other private-network communications. SDG&E is the predominant energy provider with dozens of telecommunications providers. UUT is received on a monthly basis from the various providers. Total UUT revenues received in fiscal year 2005-06 were $6.4 million, of which $2.2 million was from energy and $4.2 million was from telecommunications. The total was 13-8 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 7 $872,000 less than projected in the fiscal year 2005-06 third quarter fiscal status report. The shortfall in UUT was due to one-time credits for billing errors by SDG&E of approximately $84,000 and the relatively mild winter and summers which resulted in lower energy usage. Some large telecommunications providers and taxpayers have taken the position that the UUT does not apply to long distance, VolP (voice over internet), and cellular phone charges. Although pending litigation and potential legislation could adversely affect the telecommunications revenues, they are unlikely to do so during the next twelve months. We are therefore projecting revenues to come in I __Energy __Telecom __Totel relatively flat at $6.6 million resulting in an overall budgetary shortfall of $1.4 million. Utility Users Tax " $7.0 c ~ $6.0 i $5.0 $40 $30 $2.0 $1.0 $0.0 .- --- 2001 2002 2003 2004 2005 2006 2007 DEVELOPMENT RELATED REVENUES Current projections of development related revenues citywide indicate unanticipated revenue shortfalls of approximately $2.3 million in the development services departments, including the Planning & Building, and Engineering Departments, and the Construction Inspection section of Public Works Operations. These shortfalls are projected in both the fee based and deposit based revenue budgets, at $360,000 and $2.0 million respectively. These revenue shortfalls are discussed in detail in the following sections. Projected expenditure savings to mitigate this impact totaling $1.9 million have been identified in the Planning & Building and Engineering Departments and are also discussed below DEVELOPMENT SERVICES GENERAL FUND IMPACT SUMMARY Budgeted Revenues $ 9,790,564 $ 6,922,290 $ 16,712,854 Projected Revenues $ 8,329,712 $ 6,011,267 $ 14,340,979 Revenue Shortfall $ (1,460,852) $ (911,023) $ (2,371,875) Expenditure Savings $ 588,641 $ 1,301,802 $ 1,890,443 General Fund Impact $ (872,211 ) $ 390,779 $ (481,432) 13-9 FINANCIAL STATUS REPORT Semnd Quarter Fiscal Year 2006-07 Page 8 DEVELOPMENT PROCESSING FEES (BUDGET $6. 7 MILLION, PROJECTED $6.3 MILLION) Development related revenues consist of two categories: development processing fee revenues and deposit based revenues. In all, a $2.3 million shortfall is projected in development related revenues. Of that amount, $360,000 is attributable to development processing fee revenues and is discussed in this section. The remaining $2.0 million shortfall is attributable to deposit based revenues, and is discussed in the following section of this report. Development processing fee revenues, which include building permits, planning fees, other building department fees, and engineering fees, reflect a significant decrease year-to-date. One of the major sources of development revenues are building permits, which are down 17% compared to last fiscal year. The decrease in building permit revenue is derived from the combination of a decrease in the valuation of new construction and a decrease in the number of residential building permits issued. Residential Building Permits Units Issued by Fiscal Year 4,000 3.500 3.000 2.500 2.000 1,500 1,000 500 o 1998 I 1999 2000 2001 2002 2003 2004 2005 2006 2007 I E1Single Family . Multi-Family New residential building permits pulled year to date (as of January 31) totaled 565. This represents a 21 % decrease from the 716 residential units pulled as of January 31, 2005. This same measure was as high as 1,403 units in January 2005. In total, 2,216 units were permitted in fiscal year 2004-05 and 1,406 residential units were permitted in fiscal year 2005-06. The highest fiscal year residential construction activity occurred in fiscal year 2003-04, with the permitting of 3,694 units. These historic trends are illustrated in the 'Residential Building Permits' chart above. Current projections for fiscal year 2006-07 reflect the permitting of 1,200 residential units, a reduction of 68% since fiscal year 2003-04 and the lowest level since 1998. The decline in building permits issued will translate into a significant shortfall in development related fee revenues of approximately $360,000 in the current fiscal year. An additional shortfall of $2.0 million in deposit-based revenues is projected as well, bringing the total development revenue shortfall to $2.3 million. This deposit based revenue shortfall is discussed in the next section of this report. Incorporating the fee study and development phasing information, development related revenues for the current fiscal year are projected to total $6.3 million. This projection assumes the issuance of approximately 1,200 new residential construction permits this 13-10 FINANCIAL STATUS REPORT Second Quarter RscaI Year 2006-07 Page 9 fiscal year. This projection represents a revenue shortfall of $360,000 (or 5%), as compared with the approved revenue budget of $6.7 million. STAFF TIME REIMBURSEMENT REVENUES Of the projected $2.3 million revenue shortfall in the development services departments, $360,000 is attributable to the development related fee revenues detailed above. The remaining $2.0 million revenue shortfall projected is associated with staff time reimbursement revenues. These reimbursement revenues are primarily generated by deposit-based accounts. The deposit accounts are funded by developers and reimburse the City for costs associated with development project processing. These reimbursements are based upon actual staff hours expended on projects, which are then billed to the developers' deposit accounts at full cost recovery. The remaining staff time reimbursement revenues are generated by work in redevelopment areas; special tax districts; Development Impact Fee (DIF) program administration; and Capital Improvement Program (CIP) project design, administration, and construction. As described in the previous 'Development Processing Fee' section, the City is experiencing a significant decline in development activity. This decline in development activity directly impacts staff workload, which in turn directly impacts deposit-based revenues. In fiscal year 2005-06, a total of $10.2 million in deposit-based revenues were included in the approved budget. Of this amount, the City's General Fund realized only $8.0 million, or 78%. In response to this revenue shortfall in fiscal year 2005-06, the revenue budget for fiscal year 2006-07 was reduced by 15%, from $10.2 million to $8.7 million. As of the end of the second quarter of fiscal year 2006-07, deposit-based reimbursement revenues are down 6% compared with the same time last year, and are projected to generate a revenue shortfall in the current fiscal year of $1.7 million. The remaining reimbursement based revenue shortfall of $300,000 is associated with the other reimbursement revenue areas described above. DEVELOPMENT SERVICES BUDGETARY ADJUSTMENTS In response to projected shortfalls of $2.3 million in the Planning & Building and Engineering Departments, expenditure budget adjustments have been identified to generate budgetary savings, thereby mitigating impacts to the General Fund. In the Planning & Building Department, projected expenditure savings of $588,641 have been identified for the current fiscal year. These savings reduce their projected General Fund impact as estimated in the first quarter report from $1.25 million to $872,211. In the Engineering Department, projected expenditure savings of $1.3 million have been identified for the current fiscal year. These savings completely offset the department's contingency amount ($896,489) and further reduces the department's General Fund impact by $390,779. 13-11 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 1 0 The final group impacted by the slowdown in development activity is the Construction Inspection section of Public Works. The impacts of a development slowdown are delayed for this group, as compared with the Planning & Building and Engineering Departments. This delay is a result of this group's role in the development process, which is primarily limited to project construction. For the current fiscal year, a minor revenue shortfall is projected, which will be completely offset by personnel vacancies. BUDGET ADJUSTMENTS Per Council direction, a list of budget adjustments between summary accounts approved by the City Manager during the quarter are to be provided. There were no budgetary transfer requests during the second quarter of fiscal year 2006-07. ATTACHMENTS Schedule A - Expenditure Status by Department Schedule B - Revenue Status by Department Schedule C - Revenue Status at Fund Level Schedule D - Mid-Year Appropriations 13-12 Financial Status Report Schedule A GENERAL FUND Expenditure Status by Department as of December 31, 2006 "Amended Available Projected Projected Department Budget Balance Expenditures Exp. Savings Legislative and Administrative City Council 1,638,747 847,485 1,575,147 63,600 Boards and Commissions 14,252 2,957 14,252 0 City Clerk 1,155,549 543,990 1,147,949 7,600 City Attorney 2,723,608 1,245,131 2,713,608 10,000 Administration 3,986,459 2,203,044 3,709,836 276,623 Information Technology Services 4,461,887 2,020,006 4,381,521 80,366 Human Resources 5,382,264 2,267,330 5,275,503 106,761 Finance 3,205,939 1,677,964 3,145,939 60,000 Total Legislative and Administrative $22,568,705 $10,807,907 $21,963,755 $604,950 Non-Departmental $3,605,844 ($180,656) $2,961,396 $644,448 Development and Maintenance Services General Services 11,012,673 5,644,741 10,763,865 248,808 Community Development 3,954,618 1,854,305 3,774,838 179,780 Planning and Building Services 10,616,759 5,077,593 10,028,118 588,641 Engineering 7,908,040 4,692,726 6,606,238 1,301,802 Public Works 21,372,349 10,707,860 21,124,016 248,333 Total Development and Maintenance Services $54,864,439 $27,977,224 $52,297,075 $2,567,364 Public Safety Police 50,898,826 27,212,201 60,826,604 72,222 Fire 22,659,407 11,309,237 23,440,678 (781,271) Total Public Safety $73,558,233 $38,521,438 $74,267,282 ($709,049) Culture and Leisure Recreation 7,008,706 3,887,084 6,341,683 667,023 Library 10,334,689 5,580,887 9,961,528 373,161 Nature Center 1,194,857 584,391 1,139,605 55,252 Total Culture and Leisure $18,538,252 $10,052,362 $17 ,442,816 $1,095,436 Total General Fund $173,135,473 $87,178,275 $168,932,324 $4,203,149 "Includes $1.8 million in budget carrryovers for encumbrances and CIP projects. 13-13 Financial Status Report Schedule B GENERAL FUND Revenues Status By Department as of December 31,2006 Amended Actual Projected Var. Proj. Percent Department Budget To Date Revenue To Budget Variance Legislative and Administrative City Council 0 0 0 0 0.0% Boards and Commissions 0 0 0 0 0.0% City Cierk 88,499 3,220 88,499 0 0.0% City Attorney 860,050 212,460 860,050 0 0.0% Administration 442,292 181,138 442,292 0 0.0% Information Technology Services 797,682 76,942 797,682 0 0.0% Human Resources 454,794 124,087 454,794 0 0.0% Finance 1,299,705 459,156 1,299,705 0 0.0% Total Legislative and Administrative $3,943,022 $1,057,003 $3,943,022 $0 0.0% Non-Departmental $109,730,236 $27,992,217 $108,078,628 ($1,651,608) -1.5% Development and Maintenance Services General Services 5,725,631 2,417,537 5,547,838 (177,793) -3.1% Community Development 3,432,743 1,434,024 3,431,429 (1,314) 0.0% Planning and Building Services 9,790,564 3,242,075 8,329,712 (1,460,852) -14.9% Engineering 6,922,290 2,511,372 6,011,267 (911,023) -13.2% Public Works 15,627,901 7,183,064 15,544,422 . (83,479) -0.5% Total Development and Maintenance Services $41,499,129 $16,788,092 $38,864,668 ($2,634,461 ) -6.3% Public Safety Police 9,231,284 2,119,437 9,440,062 208,778 2.3% Fire 990,018 528,539 1,172,782 182,764 18.5% Total Public Safety $10,221,302 $2,647,976 $10,612,844 $391,542 3.8% Culture and Leisure Recreation 3,023,890 959,526 2,447,960 (575,930) -19.0% Library 2,442,856 278,207 2,377,394 (65,462) -2.7% Nature Center 276,892 151,141 283,172 6,280 2.3% Total Culture and Leisure $5,743,638 $1,388,874 5,108,526 ($635,112) -11.1% Total General Fund $171,137,327 $49,874,162 $166,607,688 1$4,529,6391 -2.7% 13-14 Financial Status Report Schedule C General Fund Revenues Summary by Revenue Category Fiscal Year 2006-2007 as of December 31,2006 Amended Actual Projected Var. Proj. Percent Budget To Date Revenue To Budget Variance Property Taxes $26,999,041 $11,247,951 $27,649,041 $650,000 2.4% Other Local Taxes Sales 30,997,040 2,870,914 30,997,040 0 0.0% Franchise 11,368,337 2,750,580 10,528,835 (839,502) -7.4% Transient Occupancy 2,581,975 1,122,060 2,581,975 0 0.0% Utility Users 8,030,681 2,788,918 6,617,984 (1,412,697) -17.6% Business License 1,175,429 530,747 1,175,429 0 0.0% Other 2,711,465 568,139 2,098,056 (613,409) -22.6% Total Other Local Taxes $56,864,927 $10,631,358 $53,999,319 ($2,865,608) -5.0% Licenses & Permits Building, Plumbing, Electrical 3,678,859 1,120,102 3,380,735 (298,124) -8.1% Other 602,876 255,971 598,732 (4,144) -0.7% Total Licenses & Permits $4,281,735 $1,376,073 $3,979,467 ($302,268) -7.1% Fines, Forfeitures & Penalties $1,462,125 $662,658 $1,534,819 $72,694 5.0% Revenue from Use of Money & Property $2,430,673 $754,141 $2,211,603 ($219,070) -9.0% Revenue from Other Agencies State Motor Vehicle License Fees 17,864,139 570,379 17,864,139 0 0.0% Police Grants 3,614,201 594,932 3,619,857 5,656 0.2% Other 3,731,205 544,937 3,664,942 (66,263) -1.8% Total Revenue from Other Agencies $25,209,545 $1,710,248 $25,148,938 ($60,607) -0.2% Charges for Current Services Development-related Services 11,446,550 4,502,903 9,408,759 (2,037,791) -17.8% Other Charges 6,168,396 1,765,705 6,152,395 (16,001) -0.3% Total Charges for Current Services $17,614,946 $6,268,608 $15,561.154 ($2,053,792) -11.7% Other Revenues Reimbursements from Other Funds 15,542,100 4,992,962 15,077,755 (464,345) -3.0% Other 1,881,486 1,172,419 2,594,843 713,357 37.9% Total Other Revenues $17,423,586 $6,165,381 $17,672,598 $249,012 1.4% Transfers-In $18,850,749 $11,057,744 $18,850,749 $0 0.0% TOTAL REVENUES & TRANSFERS-IN $171,137,327 $49,874,162 $166,607,688 ($4,529,639) -2.7% 13-15 Schedule 0 Fiscal Year 2006-07 as of December 31,2006 General Fund Budget Amendments Per Council Resolutions Est Add'l Add'l General Fund Description Revenues Approp Net Impact One-time grant from the Dept. of Alcoholic Beverage Control (ABC Grant) $88,048 $88,048 $0 Park ranger station and facilities for the Otay Valley Regional Park $0 $100,000 ($100,000) Costs for inclusion on the ballot of two proposed charter amendments $0 $50,000 ($50,000) Reimbursement for special event selVices for the seventh Annual Otay Ranch Day $1,381 $1,381 $0 Contribution towards the cost of defibrillators for Chula Vista schools $0 $27,000 ($27,000) Grand funding (UASI 03 Part II) for first responder decontamination Equip. & Truck $46,303 $46,303 $0 Community donations in support of Fire Dept. ceremony and recognition event $6,540 $6,540 $0 Office of Traffic Safety Grant to fund staff, eq.uip. & materials for STEP prog. $199,303 $199,303 $0 TOlal"f 1st Quarter Budget'Aiiiendl1ienls '". . . $341,575 $518,575 ($171,000) State contract with Police Dept. for In Custody Drug Treatment Program (ICDTP) $400,046 $400,046 $0 Reimbursement from Allied Waste for a public education booklet $30,304 $30,304 $0 Dept. of Education Even Start Family Literacy Program grant $5,833 $5,833 $0 Gates Foundation Public Access Computer Hardware Upgrade grant (PAC HUG) $39,000 $39,000 $0 One-time augmentation to the Public Library Fund (PLF) grant $57,807 $57,807 $0 Addition of two California Border Alliance Group (CBAG) funded positions $164,379 $159,591 $4,788 Agreement with Southwestern Community College for in-saNies training program $15,000 $15,000 $0 Donations to the Animal Care Facility $4,767 $4,767 $0 Grant from the San Diego County Law Enforcement Foundation (SDCLEF) $3,900 $3,900 $0 T"lal of 2nd QlIartei Budget Aiiien'dments $721 ;035 . $715,248 $4,788 Year to Datel $1,062,611 $1,234,823 ($172,212)1 13-16 Attachment 2 To: Honorable Mayor and City Council Via: ;( Jim Thomson, Interim City Manager Q From: Doug Perry, Fire Chief~ Edward Van Eenoo, Director Budget and Analysis W Fire Department Overtime Subject: Date: March 1, 2007 On December 19, 2006 the City Council was presented the 1st Quarter Fiscal Status Report for the City of Chula Vista, agenda item 14. As part of the presentation of city departmental fiscal operations for FY 2006-07, the Fire Department's projected deficit for FY 2006-07 was discussed. During the course of this discussion, the Council requested a more in depth analysis of the Fire Department's overtime expenditures and that a report be brought back for review. In an effort to provide the Council with the information requested, the Fire Department and Office of Budget and Analysis jointly conducted a review of the Fire Department's overtime expenditures for the past seven years. The period reviewed included FY 1999-00 through the current budget year FY 2006-07. The result of this review is as follows: Distribution of Overtime Hours An analysis of the Fire Department hours worked for the previous two years ending in the second pay period in November indicated that overtime hours that were worked in the department were distributed as follows: . 88.6% of the hours were worked by the Fire Suppression division. . 6.7% of the hours were worked by the Fire Communications division. . 4.7% of the hours were worked by the other Fire Department divisions including Fire Prevention, Training and Administration. This distribution of the overtime hours worked is depicted in the following graph: 13-17 CHULA VISTA FIRE DEPARTMENT DISTRIBUTION OF OVERTIME HOURS WORKED ortt;R 4.7% SlJ'PRESSlCN 88.6% CCMlt.NCAllCNS 67% As the graph indicates, the Fire Suppression Division works the majority (88.6%) of the overtime in the department due to the need to staff 8 engine companies, 2 truck companies and a Heavy Rescue Vehicle on a 24-hour basis. The Fire Communications Center (6.7%) is also a 24-hour facility that warrants the use of overtime in order to sustain its operations. Additional analysis of the overtime hours worked in just the Fire Suppression Division revealed that the majority of the overtime worked (80%) was required due to coverage for leave hours taken by fire suppression staff. Included in the coverage hours were the following categories of leave: sick leave, injury leave, vacation, holidays, comp time off, management leave, and leave without pay. Under the Fire Department's constant minimum staffing model, overtime is used to backfill for vacancies created when leave is taken. Under constant minimum staffing, the Fire Department does not have extra positions allocated to fill in for vacancies and must therefore rely on overtime to sustain the required staffing levels in order to deploy its engine and truck companies. The deployment of these engines and trucks requires that a specific configuration of 38 fire suppression personnel per shift be available for the Fire Department to staff its vehicles in order to answer calls for service. The next highest category of overtime hours used was for training (12.0%). These hours account for the training that was done as part of the Homeland Security Grants. The City has been receiving Homeland Security funds for the past 4 fiscal years. The overtime expenses incurred as part of this category has resulted from the completion of specialized Homeland Security training by the Fire and Police departments. The amount of overtime paid for these training hours has been reimbursed from grant funds thus resulting in no cost to the City. The City has additionally benefited from these grant funds as staff has been able to obtain specialized training that it would have not otherwise received. 2 13-18 The next category of hours for which the use of overtime is used is to address unforeseen additional workload situations (7%) that may result from staff having to work extended shifts due to calls for service that may extend beyond a regular shift. Extra workload may also result from strike teams that the department may send out of the City to assist in major fire emergencies as part of mutual aid agreements. The department also has staff that is trained for urban search and rescue situations that may be called into service in the case of major events such as 9/11 and Hurricane Katrina. Similar to Homeland Security training, state and federal reimbursement revenues generally offset this type of overtime. The department also relies on the use of overtime in order to backfill for vacant positions until such positions are filled through the hiring process. The overtime expense incurred as a result of staffing for vacant positions is largely offset by salary savings. Special Project work accounts for 1.0% of the overtime hours worked in the Fire Suppression Division. These hours are incurred as a result of projects that cannot be undertaken during the course of regular shift work. These projects may include mapping projects, data systems updates and special studies. These hours also include the time required to assemble the staff that work on different shifts to serve on various committees. These committees are responsible for providing input for the delivery of services and the assessment of department equipment in order to sustain operations. The distribution of these hours is depicted in the following graph: CHULA VISTA FIRE DEPARTMENT SUPPRESSION DIVISION TYPES OF OVERTIME WORKED ~NN3 12.17% LEAI,ECt:MRPG: lIla% EXIRA~ UPt.. s::BlbLPInEClS 1.0'1. 3 13-19 Constant Minimum Staffing The Fire Department employs a constant minimum staffing model to deliver calls for service to the community. Under this model overtime is used to backfill for vacancies created when leave is taken or a situation arises that precludes the department from assembling the required staffing level necessary for service delivery. The Fire Department requires a staffing level of 38 positions to be available each 24-hour shift in order to staff its engine and truck companies at the nine stations operated by the department. This staffing level is mandatory and is comprised of the following configuration of positions: . 2 Battalion Chiefs . 11 Fire Captains . 11 Fire Engineers . 14 Firefighters It is important to note that when examined as a whole, the constant minimum staffing model actually generates a cost savings in the form of cost avoidance to the City. In order to fully understand the benefit of constant minimum staffing it is necessary to evaluate the alternative expenditure outlay that would be necessary in its absence. In other words, the additional cost of hiring extra full-time benefited positions to achieve the required staffing levels needs to be compared to the level of overtime expenditures that are being incurred. When such a comparison is made, it is evident that it is more cost effective to pay overtime, than to hire extra personnel. This is primarily due to hourly over-time rates being less than the hourly rate of a full-time benefited position. This comparison is shown on the following table: Fire Suppression Hourly Rate Comparison Overtime vs. Fully-Benefited Rates Fire average average average Suppression salaries & benefits salary hourly overtime Position hourlv rate rate hourlv rate FIREFIGHTER (112 HR) $ 35.04 $ 21.24 $ 31.86 FIRE ENGINEER (112 HR) $ 42.93 $ 26.20 $ 39.30 FIRE CAPTAIN 1112 HR) $ 49.30 $ 30.63 $ 45.94 From an operational viewpoint, the constant minimum-staffing model funded by overtime is preferred for the following reasons: 4 13-20 . It allows the department to call upon the exact personnel resources to fill vacancies as needed. This is more efficient than having extra positions that would possibly be idle. . Adding extra positions would not guarantee the elimination of overtime entirely as overtime would still be paid in the event of special circumstances such as deployments due to mutual aid and natural disasters like Hurricane Katrina. . The department would have to pay overtime in order to cover for periods of time when vacant positions are in the process of being filled. . The hiring of additional positions also involves incurring additional training and equipment costs. Fire Suppression Overtime Analysis As discussed above, the vast majority of Fire overtime usage is in the Suppression Division, primarily due to constant minimum staffing and the reliance on overtime to cover for vacant positions and employee leave. As shown in the following graph, actual non-reimbursed suppression overtime expenditures increased by $1.27 million, or 193%, between FY 1999-00 and FY 2005-06. CHULA VISTA FIRE DEPARTMENT SUPPRESSION NON-REIMBURSED ACTUAL OVERTIME Thousands $2,000 $600 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $400 $200 $0 FY FY FY FY FY FY FY 2000 2001 2002 2003 2004 2005 2006 5 13-21 This increase in Suppression overtime expenditures since FY 1999-00 can be directly attributed to the following three factors: 1) A 45% increase in suppression staffing levels (i.e. fire fighters, engineers, captains, and battalion chiefs). CHULA VISTA FIRE DEPARTMENT SUPPRESSION STAFFING 120 80 100 60 40 20 o ",<> '),<S ~ "," '),<S ,<-4. ",<>'), ~'V ","> ~ ~ ~ '),<S ~ "," '),<S ~ "," ~ ~ 2) A 39% increase in the average salary of suppression personnel. CHULA VISTA FIRE DEPARTMENT SUPPRESSION SALARY INCREASES $80,000 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 6 13-22 3) A 44.5% increase in the average overtime hours worked per suppression employee - a direct result of the change to constant minimum staffing in FY 2000-01. With the exception of the switch to constant minimum staffing in FY 2000-01 and the spike in FY 2002-03 that resulted from the historic fire storms that year, average suppression overtime hours worked annually per budgeted employee have remained relatively constant. CHULA VISTA FIRE DEPARTMENT SUPPRESSION AVERAGE ANNUAL OT HOURS PER EMPLOYEE 700 100 600 500 400 300 200 ,,'" ~ ..'" "... ",'" ~ ,,'" ~ ~ ,," ~ ~ ,,'" ~ ~ "Co ~ ~ ,,'" ~ ~ Combined, the above factors project a 191% increase in suppression overtime expenditures from FY 1999-00 to FY 2005-06. This result is consistent with the aforementioned actual increase of 193%. Budget to Actual Comparison A comparison of budget to actual overtime expenditures for the Fire Department indicates that actual overtime expenditures grew by $1.46 million from FY 99-00 to FY 05-06, while budgeted overtime increased by $1.2 million. The analysis also revealed that the Fire Department has experienced deficits in overtime ranging from $127k in FY 99-00 to a high of $512k in FY 04-05, averaging $369k per year. 7 13-23 CHULA VISTA FIRE DEPARTMENT OVERTIME EXPENDITURES BY FISCAL YEAR BUDGET VS ACTUAL (Thousands) $500 I_BUDGET I!IlACTUAL I $2,500 $2,000 $1,500 $1,000 $0 ,,'" 0,0, ~ ,," ~<P ,," "," ~ (';) a:'" ~'" ~~ ~'" ,y''' ~ "'.?' ~ As mentioned previously, some overtime usage is created by the need to backfill vacant positions. When this occurs, the salary savings resulting from the vacant position offset the increased overtime cost. Factoring in salary savings realized from vacant positions reduces the overtime deficits to between $113k in FY 1999-00 to $389k in FY 2001-02, averaging $239k per year. The Fire Department's overall overtime needs have been impacted by the following service enhancements: . FY 2002-03 the opening of Fire Station 7 that added an engine and a ladder truck company for a total of 21 new staff. . FY 2003-04 the opening of the Fire Communications Center. . FY 2004-05 the opening of interim Station 8 added 9 staff. . FY 2005-06 the staffing of the Heavy Rescue Vehicle (USAR 53) with 9 additional staff. . FY 2005-06 the addition of the 2nd Battalion Chief equaling three Battalion Chiefs. Despite the staffing increases due to the implemented service enhancements, the overtime budget remained relatively flat from FY 2000-01 through FY 2003- 04. The overtime budget has increased significantly since FY 2004-05 (from $959k to $1.6 million) but this increase has not been sufficient to make up for past deficits. The year-to-year deficit situation has been further compounded by 8 13-24 the increases in wages due to negotiated labor agreements. The impact of these deficits has resulted in fiscal year-end transfers from available balances in order to fund the Fire Department's fiscal year-end operations. Overtime as a Percentage Total Personnel Services Overtime expenditures have grown as a result of staffing increases due to service enhancements implemented by the Fire Department to address the impacts of growth. However, when compared as a percentage of the total personnel services budget, actual overtime expenditures as a percentage of the total actual personnel expenditures have been trending downward since peaking in FY 2002-03 at 15.6% (depicted in the following graph). As also depicted in the graph, budgeted overtime as a percentage of the total personnel budget peaked in FY 2001-02 at 10.7% and has also been trending downward since. This indicates that overtime expenditures do not exhibit an increasing trend when they are examined as percentage of both the total budgeted and the actual personnel expenditures respectively. Although total overtime expenditures have increased over time, these increases can be attributed to the service enhancements that have increased the scale of Fire Department operations. These increases have been necessary to keep pace with service demands. CHULA VISTA FIRE DEPARTMENT OVERTIME EXPENDITURES AS % OF TOTAL PERSONNEL COSTS BUDGET VS ACTUAL 25.0% I_BUDGET _ACTUAL I 20.0% 15.6% 5.0% 15.0% 10.0% 0.0% ~ pf<:J i" ))" ~rS' (\. >.:"" ,J,,"" << ))"0 ",,'1.' ~ ('1<1' ,J,,"" << ))':l ~~ ,,'0 ",,<if ~ 9 13-25 Overtime Expenditures per Budgeted Full-Time Equivalent As the following graph indicates, actual overtime expenditures per budgeted full- time equivalent have not increased despite the increases in staffing that have occurred. This is partially attributed to some of the staffing increases taking place in divisions where the compensated overtime earned is not as high or is not eligible to be earned. CHULA VISTA FIRE DEPARTMENT OVERTIME EXPENDITURES PER FULL.TIME EQUIVALENT $20,000 $16,875 $5,000 $15,000 $10,000 $0 pf<S> ~q; .;>' ~ 5>'1- ,,' ~ 5>" "" ~ ".I' ~ b ~p ~ ",?' ~ ci ~ ~ Projected* Fiscal Year 2006-07 and 2007-08 Fire Overtime Projections A detailed analysis was conducted to project Fire overtime needs for Fiscal Years 2006-07 and 2007-08. For this analysis, overtime was grouped into three categories: . Regular Overtime - Approximately 75% of overall overtime usage. Regular overtime is primarily used to backfill for vacant positions and employee leave. As these uses can vary significantly from year to year, regular overtime is the most difficult of the three categories of overtime to project and is therefore the primary focus of the remainder of this analysis. . Reimbursed Overtime - Used in instances such as strike teams that the department may send out of the City to assist in major fire emergencies as part of mutual aid agreements. Funds for reimbursed revenues are 10 13-26 generally appropriated mid-year as revenues are received as opposed to during the annual budget process making budget projections unnecessary. . Other Overtime - Primarily related to hard holidays and FLSA premiums. Projecting funding for this type of overtime is fairly straightforward as it is based upon known MOU agreements. These amounts are calculated within the City's position budgeting system and have historically been budgeted at or slightly above actual levels. Regular Overtime Projection Since suppression accounts for approximately 90% of the Fire Department's total regular overtime dollars, the analysis included a breakdown of average overtime hours worked over the past three years and current overtime rates for all 106 authorized suppression positions by job classification. These numbers were used to calculate the projected regular overtime requirements for the Suppression Division for FY 2006-07 as shown in the following table. CHULA VISTA FIRE DEPARTMENT SUPRESSION ESTIMATED REGULAR OVERTIME FY 2006-07 Avg OT #of hours FY 06 - 07 Emplovees worked OT Rate Est OT Batt Chief 6 376 $ 58.49 $ 132,044 Fire Captain 31 587 44.25 $ 805,217 Fire Engineer 33 533 37.73 $ 663,592 Fire Fighter 36 350 32.06 $ 403,988 Total Estimated Suppression Regular OT $ 2,004,841 It should be noted that current departmental overtime is tracking about $200k higher than these historical trends due to a higher than usual number of vacant positions this year. The vacancies that are creating the higher overtime usage will result in additional salary savings that will more than offset the additional overtime expense. The following charts show the entire Fire Department's regular overtime budget by division along with the projected overtime and any surplus or deficit. For suppression, the number used was based on the current 11 13-27 year trend taking into account the higher than usual vacancy rate. For all other divisions, projections were based upon historical usage. CHULA VISTA FIRE DEPARTMENT REGULAR OVERTIME ESTIMATES FOR FY 2006-07 Current FY Estimated 06 - 07 FY 06 - 07 Surplus I Division Budget Expenditure (Deficit) Training $ 54,671 $ 53,600 $ 1,071 Suppression $ 1,681,594 $ 2,204,841 $ (523,247) Communications $ 88,103 $ 132,500 $ (44,397) Prevention $ 18,513 $ 21,900 $ (3,387) Admin $ 7,884 $ 7,718 $ 166 Regular OT $ 1,850,765 $ 2,420,559 $ (569,794) Reimbursed and Other Overtime Projection As mentioned, reimbursed overtime is appropriated midyear as the funds are received. Typically, the budget will match the actual expenditures; therefore, the FY 2006-07 projections are based on current year to date expenditures. Since reimbursed revenue is appropriated only when the revenue is received, the estimate for FY 2007-08 is $0. Other overtime for FY 2006-07 was budgeted using known MOU amounts. Current projections show that the actual expenditures will be within the budgeted amounts. Summary of FY 06 - 07 and FY 07 - 08 Projections The chart below summarizes all of the Fire Department's budgeted and projected overtime by category for FY 2006-07, along with an estimate for FY 2007-08. Although the FY 06-07 overtime deficit is projected to be approximately $570k, there will be some salary and benefit savings to partially offset this deficit. 12 13-28 CHULA VISTA FIRE DEPARTMENT FY 06-07 and FY 07-08 OVERTIME ESTIMATES Current Estimated Projected FY 06 - 07 FY 06 - 07 Surplus I FY 07 - 08 BudQet Expenditure (Deficit) Expenditure Regular $ 1,850,765 $ 2,420,559 $ (569,794) $ 2,517,416 Reimbursed' $ 159,216 $ 159,216 $ $ Other $ 522,716 $ 522,716 $ $ 533,170 $ 2,532,697 $ 3,102,491 $ (569,794) $ 3,050,586 * Current budget is $15k. A budget amendment will be brought forward to appropriate revenue already received. FY 08 estimate is $0. Budget will be appropriated once any revenue is received. Summary The Fire Department has increased its scale of operations significantly over the past seven years in order to continue delivering services to the community and meet the demands of growth. The increased scale of operations has also resulted in increased base budget costs necessary to sustain these new service levels. However, the Fire Department has not received the necessary level of funding for personnel services including overtime expenditures to sustain these increased service levels. While the Fire regular overtime budget has increased by 233% from FY 1999-00 to FY 2005-06, there was a structural imbalance in FY 1999-00 of approximately $127k that had compounded to $384k in FY 2005-06. In order to correct this imbalance, staff will be recommending an additional appropriation that addresses this need to properly fund personnel expenditures for the remainder of FY 2006-07. It is important to note that constant minimum staffing necessitates that overtime be used to backfill for employee leave time (vacation, sick, etc) as well as vacancies within the department. Although vacancies add to the total overtime cost, salary and benefit savings offset this additional cost, therefore, these salary savings must be considered when analyzing total personnel needs. It is anticipated that the additional appropriation request for overtime net of salary and benefit savings for FY 06-07 will be approximately $450,000. 13 13-29 RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $450,000 FROM THE AVAILABLE BALANCE OF THE GENERAL FUND TO THE FIRE DEPARTMENT PERSONNEL SERVICES BUDGET FOR COSTS RELATED TO OVERTIME WHEREAS, the City General Fund ended the fiscal year 2006 with an available balance of$14.9 million or 8.8% of the operating budget; and WHEREAS, based on updated revenue projections and the implementation of the citywide contingency plan, the general fund reserves are projected at 8.5% or $14.4 million, a slight decrease of 0.3%, or $498,702, from the prior fiscal year; and WHEREAS, the reserves were predicted to drop in the first quarter financial status report primarily because of a shortfall in development revenues; and WHEREAS subsequent to that report a development fee study was completed and approved on January 23,2007; and WHEREAS, the new fee schedule becomes effective March 26, 2007; and WHEREAS, the development services departments have incorporated the new fee structure in to their projections; and WHEREAS, since the first quarter report, the projected impact to reserves of $602,749 has been reduced to $498,702; and WHEREAS, the slight reduction in reserves is due to a number of factors the most significant being the quantification of Fire Department overtime usage; and WHEREAS, the Fire Department and the Office of Budget & Analysis has conducted a review of Fire overtime usage; and WHEREAS, based on year to date overtime usage, the Fire Department is anticipating budgetary overages of approximately $450,000 related to overtime. 13-30 NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista appropriates $450,000 from the available balance of the General Fund to the Fire Department personnel services budget for costs related to overtime. Presented by Approved as to form by Maria Kachadoorian Director of Finance/Treasurer 13-31