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Home My WebLink About2007/04/19 Item 1 City Of Chula Vista City Manager's Office 276 Fourth Avenue Chura Vista, Ca 91910 619.409.5282 -619.585.5612 Fax MEMO ellY OF CHUlA VISTA DATE: April 13, 2007 TO: Honorable Mayor and Council /~ r/I FROM: Jim Thomson, Interim City Manager SUBJECT: Fiscal Year 2007-08 Budget Update As you are aware, the City is currently experiencing significant budgetary constraints, primarily as a result of increasing labor costs, a significant downturn in the housing market, and lower than expected franchise fee, user utility tax, real property tax, and sales tax revenues. Updated 5-year revenue and expenditure forecasts demonstrate that expenditure increases will continue to out-pace revenue growth unless long-term corrective actions are taken. The proposed budget reduction plan described herein results in a balanced budget for fiscal year 2007-08. However, a significant portion of the proposed plan is comprised of one-time savings, implying that further corrective action will likely be necessary prior to fiscal year 2008-09. The purpose of this memorandum is to describe the proposed budget-balancing plan for fiscal year 2007-08 for further discussion at the April 19'h budget workshop with Council. At the March 1st budget workshop, the fiscal year 2007-08 base budget was presented with a projected general fund budget gap of $6.3 million; a reduction of $3.8 million from the initially projected gap of $10.1 million (see the attached presentation from the March 1" workshop). The primary factors behind this reduction in the gap were: . A reduction in the potential general fund cost of various "wildcard" issues including special elections ($0.5 million), compliance with the new storm water permit ($0.5 million), and the university project ($0.3 million) . Transfer of public liability expenses to the public liability expense fund ($0.7 million) . Increased cell phone site revenues ($0.5 million) . Increased program revenues brought forward by departments ($1.2 million) It should also be noted that as part of the base budget process 11 vacant positions were eliminated and 2 were frozen: 8 in Planning and Building, 4 in Engineering, and 1 in Mayor and Council. Without these base budget reductions the projected budgetary gap would have been significantly higher. 1-1 Fiscal Year 2007-08 Budget Update 4/1312007 Included in the fiscal year 2007-08 base budget are the following: . Full funding for all Council approved positions less an assumed 2% salary savings (salary savings were not applied to sworn Police and Fire empioyees) . All known or estimated MOU, PERS, and flexible benefit cost increases . Full funding for projected Fire Department overtime costs . Significantly reduced salary savings and elimination of anticipated service and supply savings, thereby creating a more flexible and conservative base budget . CPI adjustments of 3.72% for most service and supply accounts and significantly higher increases where justified (e.g. street maintenance materials budget) . Full-funding for all mid-fiscal year 2006-07 appropriations approved by Council Following the March 1" budget workshop, staff determined that approximately $700,000 in Supplemental Law Enforcement Service Fund (SLESF) grant revenues would not be available towards closing the budget gap as the grant revenues are tied to increases in personnel costs necessary to fund the Police Department's overhire program. Therefore, as summarized in the following table, the revised budgetary gap to be addressed in fiscal year 2007-08 is $7 million. Fiscal Year 2007-08 Base Budget Fiscal Year 2007-08 General Fund Revenues Base Budget Gap presented at March 1 Workshop Eliminate SLESF Revenue Revised Budgetary Gap $178.0 million $171.7 million $6.3 million $0.7 million $7.0 million In determining how to close the General Fund budgetary gap, the following criteria were developed: . Minimize service impacts to the communitv. With this goal in mind. the majority of the proposed budget balancing measures come from internal support functions (including management staff) and development services functions, the latter a direct result of the significant slow down in development activity (see attachment). . Avoid lavoffs of permanent staff. Departmental right sizing and restructuring is better handled over time through thoughtful long-term planning and attrition. It is important to note that although the balanced budget plan described in this document does not involve any layoffs of permanent staff, it does include the elimination of 34.25 vacant positions and freezing of 10 vacant positions. Over the course of fiscal year 2007-08 staff will continue to monitor vacant positions as they occur and through attrition implement the necessary corrective actions to ensure that expenditures remain in-line with long-term revenue projections. Page 2 1-2 Fiscal Year 2007-08 Budget Update 4/13/2007 . Relv as little as possible on one-time solutions, but use them to help transition towards a permanent solution, 5-year revenue and expenditure projections indicate that the City's current budget gap is an ongoing structural deficit requiring permanent solutions to correct. Some of these corrective actions may require more time to implement and one-time budget reductions can help with this transition, It is important to recognize that anyone-time solutions implemented in fiscal year 2007-08 will likely need to be replaced with permanent, sustainable solutions in fiscal year 2008-09, Within these general guidelines, departments were given net cost reduction targets, Budget reduction and revenue enhancement proposals were developed by departments and then refined by the review and recommendations of the City Manager and Assistant City Managers. The final proposals have been grouped into four categories: Base Budget Gap Support Services Reductions Development Services Reductions Direct Services Reductions New Fee Revenues Remaining Budget Gap $7.0 million ($3.9 million) ($0.8 million) ($1.4 million) ($0.5 million) $0.4 million Consistent with the aforementioned guidelines, the majority ($3.9 million or 64%) of the proposed expenditure reductions come from the support service functions. These functions are primarily located in Administration, Information Technology Services (ITS), Human Resources, Finance, and General Services but also include internal support functions from various direct service departments. The proposed reductions from the development services group (Planning and Building, Engineering, Community Development, and the Construction Inspection Unit of Public Works Operations) total $0.8 million, which is in addition to the $1.7 million of reductions already made in these areas as part of the base budget process. Proposed new fee revenues account for $0.5 million of the budget- balancing plan. No significant direct service impacts to the community are anticipated as a result of implementing the proposals from these three categories. However, these reductions could very well create significant organizational stresses, as workload from eliminated support positions will largely need to be absorbed by existing staff. Although every effort was made to avoid direct service impacts to the community, approximately $1.4 million (or 23%) of the proposed budget reductions are recommended to come from direct service functions. The impacts resulting from these reductions are described in more detail later in this report. As can be seen in the above table, even with these changes the City is still projecting a $400,000 budgetary gap for fiscal year 2007-08. Therefore, a continuation of the active management of vacancies will be necessary into fiscal year 2007-08. This approach has been utilized in the current fiscal year and has been very successful in generating additional salary savings, The continued active management of vacancies during fiscal year 2007-08 Page 3 1-3 Fiscal Year 2007-08 Budget Update 4/13/2007 will also be a good start towards addressing the base budget shortfall in fiscal year 2008-09 (currently projected at $3.9 million). A number of key points should be made regarding the proposed budget reductions/revenue enhancements: . No lavoffs of permanent staff are being recommended - all position eliminations, freezes, and downgrades pertain to vacant positions. . Approximately $2.4 million (or 39%) of the proposed expenditure reductions are one- time savings. 5-year revenue and expenditure projections indicate that one-time savings will likely need to be replaced with ongoing, sustainable reductions in future fiscal years. Proposed ongoing and one-time expenditure reductions by department are summarized in the following table. Proposed BudQet Reductions bv Department Permanent One-Time Total Reduction Department Base Budget Reductions Reductions Reduction % City Attomey $ 2,866,347 $ 152,000 $ 152,000 5.3% City Clerk $ 1,246,570 $ 25,000 $ 25,000 2.0% City Manager $ 2,270,295 $ 157,145 $ 283,139 $ 440,284 17.1% Communications $ 837,756 $ 72,457 $ 72,457 8.7% Com. Dev. $ 3,810,276 $ 164,700 $ 276,771 $ 441,471 11.6% Engineering 1 $ 7,476,551 $ 265,567 $ 77,696 $ 343,263 4.6% Finance $ 3,440,261 $ 139,597 $ 200,384 $ 339,981 9.9% Fire $ 24,794,017 $ 140,600 $ 140,600 0.6% General Services $ 11,693,336 $ 292,842 $ 68,496 $ 361,338 3.1% Human Resources $ 5,043,304 $ 192,133 $ 135,970 $ 328,103 6.5% ITS $ 4,243,497 $ 30,000 $ 40,000 $ 70,000 1.7% Library $ 10,282,937 $ 690,974 $ 690,974 6.7% Nature Center $ 1,279,720 $ 36,860 $ 36,860 2.9% Budget and Analysis $ 1,051,924 $ 145,433 $ 145,433 13.8% Planning & Building 1 $ 10,077,111 $ 203,133 $ 203,133 2.0% Police $ 53,416,699 $ 1,079,372 $ 1,079,372 2.0% Public Works Ops. $ 22,995,525 $ 466,864 $ 33,136 $ 500,000 2.2% Recreation $ 6,536,902 $ 180,000 $ 64,000 $ 244,000 3.7% Citywide' N/A $ 550,000 $ 550,000 N/A TOTAL $ 173,363,028 $ 3,739,705 $ 2,424,564 $ 6,164,269 3.56% 1. In addition to the reductions presented in this table, the Engineering and Planning and Building Departments also made a combined reduction of $1.7 million as part of the base budget process. 2. Citywide reductions would primarily come from an extension of the City's existing furlough program to management, confidential, and potentially Western Council of En9ineers staff. Page 4 1-4 Fiscal Year 2007-08 Budget Update 4/13/2007 . Of the 44.25 positions proposed to be eliminated or frozen, 20.25 are in support functions, 20 are directly related to the significant slow down in development activity, and only 4 are anticipated to result in direct service impacts to the community, Proposed staffing changes are summarized below, (Note: these figures do not account for hourly staff or increased salary saving commitments from various departments.) Proposed Personnel Reductions bv Department Department Position Title FTE Ongoing City Manager (-2) Assistant City Manager 1.0 No Administrative Secretary 1.0 Yes Fire (-1) Training Captain 1.0 No ITS (-1) Administrative Secretarv 1.0 No Budget and Analysis (-1) Senior Administrative Secreta IV 1.0 Yes Human Resources (-1.5) Office Soecialist 1.0 No Human Resources Analvst 0.5 Yes Community Development (-2) Senior CD Soecialist 1.0 Yes Senior Manaaement PosITion 1.0 No Business License Renresentative 1.0 Yes Sr. Planner 1.0 Yes Building Inspector 3.0 Yes Associate Planner 2.0 Yes Planning & Building (-10) Development SelVices Tech 0.5 Yes Office Specialist 0.5 Yes Secretary 1.0 Yes Senior Planner 1.0 No Office Specialist 1.0 Yes Principal Civil Engineer 1.0 No Associate Engineer 1.0 Yes Engineering (-7) SUlVey Technician 1.0 Yes Enoineerina Technician 1.0 No SiQnal Systems Ennineer 1.0 Yes Senior Civil Enaineer 1.0 Yes Accountant 1.0 No Finance (-3) Purchasino Aoent 1.0 No Senior Accountant 1.0 Yes General Services (-3.75\ Custodian 3.75 Yes Literacv Coordinator 1.0 Yes Currural Arts Coordinator 0.5 Yes Library (-5) Librarian 1/11 1.0 Yes Librarian III 0.5 Yes Librarv Automation Soecialist 1.0 Yes Secretarv 1.0 Yes Page 5 1-5 Fiscal Year 2007-08 Budget Update 4/13/2007 Gardener 4.0 Yes Public Works Operations (-7) Public Works Insoector 2.0 Yes Maintenance Worker 1.0 Yes TOTAl 44.25 34.25 . Proposed new fee revenues totaling $536,000 will require separate Council action to implement. It is anticipated that the new fee proposals will be brought forward for Council consideration prior to the beginning of fiscal year 2007-08. The remainder of this report presents more detailed descriptions of the proposed budget reductions (including potential service impacts) and revenue enhancements. The proposals have been divided into four categories: Support services, development services, direct services, and new fee revenues. Page 6 1-6 Fiscal Year 2007-08 Budget Update 4/13/2007 SUPPORT SERVICES $3,945,566 This section summarizes the proposed changes to various internal support services. These include reductions to Administration, Finance, Information Technology Services, City Attorney, City Clerk, and Human Resources. It also includes reductions in various direct service departments (e.g. Fire, Library, Recreation) that are proposing reductions to their internal support service programs. ITEM 1: Reductions in ManaQement Level Support Positions $1,004,753 Department Position Title FTE On oin Savin s City Manager's Office City Manager's Office Assistant City Manager 1.0 Downgrade Asst. City Manager Finance Purchasing Agent 1.0 Finance Senior Accountant 1.0 Community Development Senior Management Posrtion 1.0 Library Library Automation Specialist 1.0 Library Downgrade Ed. Services Manager Library Vacant Management Position(s) TOTAL 5.0 Anticipated Service Impacts No $ 241,200 Yes $ 78,430 No $ 154,706 Yes $ 133,211 No $ 171,059 Yes $ 103,707 Yes $ 30,965 Yes $ 91,475 $1,004,753 . Freezing one Assistant City Manager position can potentially be sustained on an ongoing basis by assigning these duties to an existing department head. It is anticipated that the organizational structure and staffing of tihe City Manager's Office will be reexamined following the hiring of the new City Manager. . Downgrading one Assistant City Manager to a new position of Economic Development Officer will allow for continued focus on several high-profile projects in a cost effective manner. This pOSition will serve as Project Manager for Bayfront Development (including Gaylord negotiations) and for University Park and Research Center Development and Implementation. . No service impacts on core support services, such as payroll, purchasing, and year- end financial reporting are anticipated as a result of freezing one position and eliminating another in the Finance Department. However, this change will hamper the 1-7 Page 7 Fiscal Year 2007-08 Budget Update 4/13/2007 department's ability to respond to special projects/assignments in a timely manner. Workload for eliminated support positions will largely need to be absorbed by existing staff. . The elimination of a senior management position in the Community Development Department may reduce the Department's ability to handle an increase in redevelopment and planning projects, such as those projected to occur following adoption of the UCSP. This proposed reduction is tied to Council approval of downgrading one Assistant City Manager Position in the City Manager's Office to the new classification of Economic Development Officer. . No direct service impacts are anticipated as a result of the reductions in Library management positions. ITEM 2: Reductions in Non-ManaQement Support Positions $1,006,260 Department Position Title FTE Ongoing Savings City Manager's Office Administrative Secretary 1.0 Yes $ 81,545 Finance Accountant 1.0 No $ 45,678 General Services Underfill various Animal Shelter pos~ions No $ 43,496 General Services Custodian 3.75 Yes $ 204,514 General Services Reduce hourly budget Yes $ 88,328 ITS Administrative Secretary 1.0 No $ 40,000 Human Resources Office Specialist 1.0 No $ 53,303 Human Resources Human Resources Analyst 0.5 Yes $ 58,692 Human Resources Downgrade Senior Benefits Technician Yes $ 9,747 Library Secretary 1.0 Yes $ 59,939 Fire Training Captain 1.0 No $ 140,600 Budget and Analysis Senior Administrative Secretary 1.0 Yes $ 90,433 Planning & Building Business License Representative 1.0 Yes $ 68,517 Planning & Building Reduce hourly budget Yes $ 21,468 TOTAL 12.25 $ 1,006,260 Page 8 1-8 Fiscal Year 2007-08 Budget Update 4/13/2007 Anticipated Service Impacts . No service impacts on core support services (e.g. payroll, purchasing, year-end financial reporting, budget, etc.) are anticipated as a result of reducing an Accountant position in Finance and eliminating two clerical positions in the Office of Budget and Analysis and the City Manager's Office. However, these changes will hamper the ability of staff to respond to special projects/assignments in a timely manner. The workload for these positions will need to be absorbed by existing staff. . It is likely that the Animal Care Facility will see impacts such as strained staffing during off-hours and weekends, reduced facility efficiency, and underutilization of staff skill. . Reductions in custodial services resulting from staff reductions will primarily be focused on non-public areas of the public services building, corporation yard, and police facility. . The one-year freeze of a Fire Training Captain would require existing training staff to absorb the captain's duties. Over an extended period of time, this could impact the quality of training provided to the department. In addition, though the position does not regularly provide fire suppression services to the community, they would be expected to respond in the event of a major incident. . Elimination of a Business License Representative position can occur due to the transfer of the business license function back to the Finance Department and absorbing some of the workload with existing Finance counter staff. Limited (if any) service impact is anticipated. ITEM 3: Service & Supplv Reductions - Support Functions $949,764 Department S&S Budget % Reduction Ongoing Savings City Attorney $ 398,484 38.1% Yes $152,000 Human Resources $ 1,909,607 6.5% Yes $123,694 Human Resources $ 1,909,607 4.3% No $ 82,667 Police $ 3,810,985 2.6% No $100,000 Communications $ 237,863 30.5% Yes $ 67,221 Recreation $ 1,063,804 6.0% No $ 64,000 Budget and Analysis $ 109,273 50.3% Yes $ 55,000 Community Development $ 619,366 6.3% Yes $ 38,800 Page 9 1-9 Fiscal Year 2007-08 Budget Update 4/13/2007 Nature Center $ 216,077 17.1% Yes $ 36,860 Library $ 1,530,609 2.3% Yes $ 35,000 Public Works $ 4,238,911 <1% No $ 33,136 ITS $ 946,989 3.2% Yes $ 30,000 City Clerk $ 247,308 10.1% No $ 25,000 City Manager $ 260,179 9.6% Yes $ 25,000 General Services $ 1,282,589 2.0% No $ 25,000 Finance $ 172,314 3.7% Yes $ 6,386 Citywide - Cell Phones $ 250,000 20% Yes $ 50,000 TOTAL $ 19,199,965 4.9% $949,764 Anticipated Service Impacts Some of the anticipated service impacts include: . Delayed completion of the Municipal Code Update project . Reduced overall productivity . Reduced strategic planning & performance measurement efforts . Reduced special events insurance based upon historical usage . Reduced employee development programs . Reduction of interpretation services budget for Council meetings and workshops based upon historical usage . Discontinuation of promotional activities and items associated with the Healthy Lifestyles program . Elimination of certain video productions (not Council meetings) . Elimination of speakers bureau announcements . Deferred maintenance of city computers Page 10 1-10 Fiscal Year 2007-08 Budget Update 4/13/2007 ITEM 4: Extension of FurlouQh ProQram $500,000 By MOU agreement, the City currently has an employee funded holiday furlough program for all Chula Vista Employees' Association (CVEA) staff. The program essentially mandates one week of leave funded by the employees through a 1.92% payroll deduction for all CVEA employees. Most furlough leave is taken between Christmas and the New Year when the City is largely shut down with the exception of life-safety and emergency maintenance services. The Libraries and Recreation Centers are operated at reduced hours. Approval of this proposal by Council would extend the furlough program to all management and confidential staff. The program may also be extended to members of the Western Council of Engineers (WCE). The net savings resulting from approval of this proposal is estimated at $500,000 per year. Anticipated Service Impacts . No additional service impacts are anticipated as many City functions and buildings are already closed during the furlough period between Christmas and the New Year. Critical life-safety and emergency maintenance services would continue to be provided. ITEM 5: Active ManaQement Police Department (Support) Civilian Vacancies $484,789 Personnel service expenditure reductions will be achieved through a rigorous management of vacancies throughout the Police Department. Since staffing swom positions is a key goal for the department, savings in personnel services will be achieved through management of civilian vacancies and hourly wages. Anticipated Service Impacts The positions included in this group are positions that support the internal operations of the department. Vacancies here may require increased workload for existing staff but most iikely will not result in direct service impacts to the public. Page 11 1-11 Fiscal Year 2007-08 Budget Update 4/13/2007 DEVELOPMENT SERVICES $849,285 This section summarizes the downsizing that is being recommended in the development services areas as a result of the significant slow down in residential development activity. These changes are not anticipated to have significant service impacts, as the remaining staffing levels are adequate to address anticipated service demands. The fiscal year 2007-08 development related revenue projections assume 1,600 residential building permits. This is down from the 3,300 residential permits processed in 2004 (see attachment). Permit volume is anticipated to continue at this level for the foreseeable future, therefore the reductions being proposed for the development services functions are generally permanent. While 1,600 residential permits is conservative compared to prior years it does assume that permit activity will increase significantly from the projected fiscal year 2006-07 level of 1,000 permits. Throughout fiscal year 2007-08, staff will continue to monitor residential permits and adjust revenue projections and maintain vacancies as necessary. In developing the base budget for fiscal year 2007-08 the Planning and Building Department and Engineering Department made major adjustments in order to bring expenditures in line with projected revenues. As part of the base budget process, these two departments eliminated 10 vacant positions and froze two other vacant positions. These changes are not anticipated to significantly impact service levels as the reductions were made in response to the slow down in development activity. Prior to being eliminated or frozen in the base budget, the positions listed below had been held vacant in anticipation of the reduced permitting and Inspection workload. The $1.7 million in budget reductions listed below have already been accounted for in arriving at the current citywide budget gap of $7.0 million. Combining the reductions already made in the base budget with the additional reductions now being proposed, the development services functions will have made an overall budget reduction of approximately $2.25 million dollars and will have reduced staffing levels by 20 positions. Summary of Reductions Alreadv Reflected in Base BudQet Department Position Title FTE Ongoing Savings Engineering Office Specialist 1.0 Yes $53,303 Engineering Principal Civil Engineer 1.0 No $141,193 Engineering Associate Engineer 1.0 Yes $109,154 Engineering Survey Technician 1.0 Yes $77,696 Engineering Reduce hourly budget Yes $73,175 Engineering Reduce overtime Yes $58,838 Page 12 1-12 Fiscal Year 2007-08 Budget Update 4/13/2007 Engineering Reduce contractual services Yes $48,000 Planning & Building Building Inspector 3.0 Yes $293,031 Planning & Building Associate Planner 1.0 Yes $90,570 Planning & Building Associate Planner 1.0 Yes $90,570 Planning & Building Development Services Tech 0.5 Yes $38,618 Planning & Building Office Specialist 0.5 Yes $26,686 Planning & Building Secretary 1.0 Yes $66,604 Planning & Building Senior Planner 1.0 No $109,750 Planning & Building Reduce contractual services Yes $420,679 TOTAL BASE BUDGET REDUCTIONS 12.0 $1.697,867 As part of the overall budget-balancing plan, additional reductions are being proposed in the development services areas. These reductions are also related to the slow down in development The positions listed below are all vacant positions and do not result in any layoffs. The affected departments have been holding these positions vacant in anticipation of needed budget corrections. Staff is recommending that these positions be eliminated or frozen in the fiscal year 2007-08 budget ITEM 6: Reductions in Development Services Positions $788.461 Department Position Title FTE On oin9 Savin s Community Development Sr. Community Development Specialist 1.0 Yes $ 115,900 Community Development Delay hiring vacant position No $ 115,712 Planning & Building Sr. Planner 1.0 Yes $ 113,148 Engineering Engineering Technician 1.0 No $ 77,696 Engineering Signal Systems Engineer 1.0 Yes $ 91,553 Engineering Senior Civil Engineer 1.0 Yes $ 124,014 Public Works Maintenance Worker 1.0 Yes $ 50,146 Public Works Public Works Inspector 2.0 Yes $ 100,292 TOTAL 8.0 $ 788,461 Note: The service impacts for Item 6 are included with Item 7. Page 13 1-13 Fiscal Year 2007-08 Budget Update 4/13/2007 ITEM 7: Service & Supplv Budqet Reductions $60.824 Department S&S Budget % Reduction Ongoing Savings Engineering Public Works 0.3% Yes $ 50,000 $ 10,824 $ 60,824 TOTAL $ 471,132 $ 4,238,911 $ 4,710,043 10.6% Yes 1.3% Anticipated Service Impacts of Proposals 6 and 7 There are no significant service level impacts anticipated as a result of these reductions, which are recommended in response to the slowdown in development activity. However, some impacts are expected including longer permit processing times, slower responses to citizen traffic related requests, and reduced long-range infrastructure planning. In the future, if development picks up, additional staff or external consultants may be needed to address the additional workload. In either case, the additional expenditures would be fully revenue offset. Page 14 1-14 Fiscal Year 2007-08 Budget Update 4/13/2007 DIRECT SERVICES IMPACTS $1,350,073 The primary criterion used in developing the budget-balancing plan was to minimize direct service impacts to the community. With this goal in mind, the proposed budget reductions anticipated to result in direct service impacts have been limited to $1.35 million. The proposed reductions listed below were selected largely on the basis of having the least impact to the community. ITEM 8: Activelv ManaQe Police Deparbnent Civilian Vacancies $494,583 The personnel service expenditure reductions will be achieved through a rigorous management of vacancies throughout the Police Department. Since staffing sworn positions is a key goal for the department, savings in personnel services will primarily be achieved through management of civilian vacancies and hourly wages. The positions included in this section are different from those included in Item 5 as these positions provide direct services to the community. Anticipated Service Impacts Although the proposed personnel savings will be isolated to the department's civilian ranks, there may nonetheless be some direct service impacts. Potential impacts include: . Increased response times for Priority 3 and Priority 4 crime reports where no suspect information is available. . Increased wait times for reports requested by the public and increased wait times for the public at the front counter. . Delayed input of pawn slips into a countywide database, resulting in additional time spent by officers researching manual records. . Reduced ability to handle police regulated business issues in a timely manner (e.g. ABC licensing and card room backgrounds). . Reduction in the number of cold case investigators by 50%, delaying the ability of the Department to solve cold cases. . Reduction of proactive directed enforcement strategies, due to reduced overtime utilization. Page 15 1-15 Fiscal Year 2007-08 Budget Update 4/13/2007 ITEM 9: Reduce Library Staffina $369,888 Position Title FTE Ongoing Savings Literacy Coordinator 1.0 Yes $ 64,373 Yes $ 34,000 Yes $ 71,302 Yes $ 46,007 Yes $ 154,206 $ 369,888 Cuttural Arts Coordinator 0.5 Librarian 1/11 1.0 Librarian III 0.5 Reduce Branch Library Hourly Budget by 22% TOTAL 3.0 Anticipated Service Impacts . Significant delays in re-shelving of books . Fewer staff on the public floor to assist guests . Diminished program offerings . Closure of all branches during the City's holiday furlough period . Less networking within the Chula Vista and regional arts communities . Elimination of the Adult Literacy Program; the emergent and youth literacy programs will continue to be provided. ITEM 10: Reduce Hours of Operation at Various Recreation Facilities $180,000 The Recreation Department evaluated the hours of operation at each of the facilities to determine which reductions would have the least impact on the community. The proposed hour reductions represent those hours where programs for the public would be the least impacted. As part of these changes, all recreation facilities will be closed during the City's furlough period. In order to achieve these savings the department will be reducing $130,600 in the budget for hourly staffing, this represents a 7.6% reduction in the department's total hourly budget. Reducing the hours of operation and programmed activities at recreation facilities will also result in savings of $39,800 in the utility budget, which represents a 6.5% reduction, and $9,600 in the department's services and supplies budget, which represents a less than 1 % reduction in the services and supplies budget. Page 16 1-16 Fiscal Year 2007-08 Budget Update 4/13/2007 Anticipated Service Impacts . Reduction in weekly hours of recreation facility operation from 540 hours to 470 hours, representing a 13% decrease . Closure of three facilities on Sundays . Closure of all recreation facilities during the City's holiday furlough period . Reduction in morning lap swim hours at Parkway Pool . Eliminate Recreation activities in advance of Yule Tide parade and tree lighting event ITEM 11: Reduce Park Maintenance Service Levels $228.992 This proposal would reduce park maintenance service levels by eliminating four vacant gardener positions ($193,992) and reducing the water budget ($35,000 or 3.8% of the department's water budget) for a total savings of $228,992. Two gardeners that work on the construction crew will be moved to help supplement regular park maintenance crews. Reduced water usage will increase the dormancy period for grass in the City's park areas. This will affect the condition of the turf. which is subject to heavy use on sports fields. Position Title FTE On oin Savin s Gardener 4.0 Yes $193,992 Anticipated Service Impacts . Litter pickup may take longer to complete . Reduced restroom cleaning at some parks from twice daily to once daily . Scarifying (smoothing out the surface) of infields will be completed quarterly instead of monthly . Aeration of turf on sports fields will be reduced from quarterly to semi-annually . Repairs to playgrounds and other park amenities will be done on a reactive basis, instead of proactively Page 17 1-17 Fiscal Year 2007-08 Budget Update 4/13/2007 ITEM 12: Reduce Street Sweepinq Services $47,320 This proposal would reduce street sweeping services on business and commercial streets. For business class streets, like Fourth Avenue and H Street, this would reduce the level of service from once per week to once every two weeks. On commercial streets, like Third Avenue between E and G Streets, this would reduce the level of service from twice per week to once per week. Anticipated Service Impacts Streets will not be cleaned as often. This reduction may result in some complaints related to decreased service levels. ITEM 13: Reduce Tree-Trimminq Services $29,290 This proposal would reduce tree-trimming services, which are contracted to an outside vendor. The proposed contract modification will reduce the number of trees trimmed by approximately 15%. Anticipated Service Impacts Because of their unique altered environment, urban trees are more prone to structural failure than are trees that grow in the wild. However, trees that are properly trained while young need less attention and become much more sound structurally, which minimizes the probability of property damage and human injury due to limbs falling. Reduction of the tree- trimming contract may result in increased City liability associated with greater potential for bodily or property damage. Page 18 1-18 Fiscal Year 2007-08 Budget Update 4/13/2007 NEW FEE REVENUES $536,000 In addition to the aforementioned expenditure reductions, departments have also proposed a variety of new fee revenues totaling $536,000. It is anticipated that these proposals will be brought back to Council by the individual departments for approval prior to the beginning of fiscal year 2007-08. ITEM 14: Increase Alarm Permit & Penalty Fees $120,000 This item would increase the existing Alarm Permit Fee and Alarm Penalty Fee. For the Alarm Permit Fee, the Police Department proposes doubling the fees collected every two years from both residential and commercial customers. For the Alarm Penalty Fee, the Police Department proposes doubling the 3rd and 4th alarm penalty amounts. No changes to the 1st, 2nd, 5th, or succeeding alarm penalty amounts are recommended. This increase will only impact those whose alarm systems repeatedly ring false alarms. False alarms are a significant resource drain to the Police Department, as 99% of all alarm calls are false. Staff has estimated that the time spent responding to false alarms equates to upwards of four full time officers (approximately $400,000 annually). ITEM 15: Implement Passport Services $50,000 This item reflects potential new revenue resulting from provision of passport application services by the City Clerk's Office. The Clerk's Office is proposing to offer passport services on a part-time, appointment only basis for the first year of operation. In future years, the program is anticipated to generate $200,000-300,000 annually, if services are expanded to full-time basis. With newly mandated travel restrictions, demand for this service is anticipated to increase over the next several years, as citizens apply for passport documentation. ITEM 15: Increase Various Fire Permit Revenues $180,000 This item reflects increased fee revenues resulting from Fire Prevention Division's proposed permit fee update. Specific fees to be addressed via the fee update include: . Sprinkler systems . Fire alarms . Standpipes . Suppression systems . Technical report reviews Page 19 1-19 Fiscal Year 2007-08 Budget Update 4/13/2007 These fees were not included in the recently approved Maximus fee study, which looked only at development related processing fees. ITEM 17: Distressed PropertY Manaoement Prooram $50,000 New Code Enforcement fee revenues would result from the implementation of a Distressed Property Maintenance Program. This program would require property owners to register and pay a fee to the City when their property falls into default (foreclosure). This program would give the City the ability to monitor the condition of the property, and to require maintenance when the conditions fall below a prescribed level. The program would also require the property owner to retain the services of a local property management company, that the City can contact as needed to remedy any observed violations. Anticipated revenues generated via this program would reimburse the General fund for existing staff costs at the City's full cost recovery rates. No new positions would be required to implement this program. ITEM 1 B: PropertY Profile Report Prooram $100,000 New Code Enforcement fee revenues would result from the preparation of Mandatory Property Profile Reports. These reports would be required prior to property transfers as a method of disclosing any significant restrictions that may have been placed on the subject property. Specifically, it is intended to assist the City's code enforcement efforts by advising potential buyers of the existence of pending code enforcement actions. The reports can also serve to alert all parties of any discrepancies that may exist between what uses are authorized on the property, versus how the property is actually being utilized. By using the services of an outside vendor, we can recover revenue for this program by charging the Title companies processing the subject property transfers. At a cost of $70 per report (the rate charged by Los Angeles), staff anticipates generating revenues of approximately $100,000. ITEM 19: Increase Recreation Fees $36.000 All youth sports league fees, some adult sports league fees, and many recreation class fees have not been increased since 2003. This proposal wouid increase these fees by 5% to 10% in order to keep pace with increases in the Consumer Price Index over this time period. Page 20 1-20 Fiscal Year 2007-08 Budget Update 4/13/2007 NEXT STEPS In the weeks to follow Budget staff will be working to incorporate these changes into the budget and prepare a proposed budget for Council consideration. The remaining budget schedule is as follows: . Finalize budget balancing recommendations April 20 - April 30 . Develop proposed budget document May 1 - May 23 . Submittal of proposed budget document to Council May 24 . Presentation of proposed budget to Council Early June . Council Adoption of Budget June 19 Attachments: A. Development Projections B. Presentation from the March 1 Council Budget Workshop Page 21 1-21 4,000 3,500 3,000 2,500 ~ I N N 2,000 - 1,500 1,000 Attachment A - Development Projections Histotrical and Projected Residential Permits 500 I I I CY'96 CY '97 CY'98 CY'99 CY'OO CY'01 CY'02 CY '03 CY '04 CY '05 FY'06 FY '07 FY '08 FY '09 FY'1 0 FY '11 r-A~iual . Projected I Attachment B - Presentation from March 1 Council Budget Workshop City Council Workshop ~\(?-- r ~::.~ (mO! CHULA VISfA Budget VVorkshop Agenda · FY 2006/07 Second Quarter Report · FY 2007/08 Budget Update - Budget/Fiscal Policies - General Fund Base Budget and Trends - Budget process and next steps · 5-Year Forecast · Council Member Block Budgets 1 1-23 Attachment B - Presentation from March 1 Council Budget Workshop Second Qualier Report ISSUES AMOUNT ACTION PLAN AMOUNT Projected Re\€nue Shortfall: Tax Re\€nues (net) $ 1,651,608 Contingency Plan SalAngs $ 3.558,701 De\elopment Re..enues $ 2,371.875 Mgml. Vacanl Positions (esl) $ 644,448 Other Departmental Re-.enues $ 506.156 $ 4,203,149 *Mid-YearAppropriations $ 172,212 $ 4,701,851 Projected Impact 10 ReseMS $ (498,70Z) *Represents net impact of Mid.Year Council Approved Appropriations. General Fund Reserve PROJECTED GENERAL FUND AVAilABLE BALANCE General Fund ReseMs July 1, 2006 Projected Re\enues & Transfers In Projected Expenc:lilures & Transfers Out Rel.enues o\€r(under) Expenditures 'Projected Available Fund Balance as of June 30, 2007 $ 14.929,410 $ 166,607,702 $ 167,106,404 $ (498,702) $ 14,430,708 Resel\es as Percentage of General Fund Operating Budget 8.5% 2 1-24 Attachment B - Presentation from March 1 Council Budget Workshop Fiscal Policies · The City's financial assets will be managed in a sound and prudent manner in order to ensure the continued viability of the organization. . A comprehensive Financial Plan will be developed and presented to the City Council for approval every two years. Fiscal Policies . Recurring expenditures will be funded by recurring revenues. One-time revenues will be used for capital, reserve augmentation, or other non-recurring expenditures. . Accounting systems will be maintained in accordance with Generally Accepted Accounting Principles. 3 1-25 Attachment B - Presentation from March 1 Council Budget Workshop Fiscal Policies . Investment policy and practice will be in accordance with State statutes that emphasize safety and liquidity over yield, including quarterly status reports to the City Council. (Council Policy) General Fund fiscal status reports reflecting comparisons of actual and projected performance with budget allocations for both revenues and expenditures will be presented to the City Council on a quarterly basis. (City Charter) Fiscal Policies . City operations will be managed and budgets prepared with the goal of maintaining an available fund balance in the General Fund of no less than eiqht percent of the General Fund operating budget. (Council Policy) 4 1-26 Attachment B - Presentation from March 1 Council Budget Workshop Fiscal Policies Updated / New · Debt Service Policy - Update in Progress . Worker's Compensation / General Liability Reserve Policies - New policies to be proposed as part of long-term financial planning process ~\.r?- ~{$; ,.,1\(. (j-tlItAYI5f.\ FY 2007/08 General Fund Base Budget FY06/07 Amended Budget $170.9 million . i Personnel Costs per MOU $5.5 million . T S&S Accounts $1,0 million . l Budgeted Salary Savings $0_9 million . t Fire OT Budget $0.7 million . i Debt Service $0.5 million . Mid-year 2007 Appropriations $0.5 million . New Storm Water Permit Compliance $0.5 million . 1 Fleet Replacement Charges $0.5 million . Otay Valley Regional Park Funding $0.2 million . Transfer of PubJic Liability Expense to Public Liability Expense Fund ($0.7 million) . Transfer RDA Debt to RDA ($1.1 miliion) . Elimination of 13 Vacant Positions: ($1.2 miliion) Planning (8), Engineering (4), Council (1) FY07/08 Base Budget $178.0 million 5 1-27 Attachment B - Presentation from March 1 Council Budget Workshop ~\IIc- ~!~~ Budget Trends: 76% General Fund Increase Since FY 2001/02 $90 $80 $70 $60 $50 $40 $30 $20 $10 $- ~. ~ --. ~--:::::::- - em Of (HULA VISTA .--~.:..:.:::.===:.;,;::.~.;.~~...:::::::::::::..~~-~::.- --- FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 ; --e- Legislative and Administration -- Development & Maint __ Public Safety - - Culture and Leisure Budget Trends 194.5 new positions since FY 2001/02 - an 18.3% increase - 103.5 Safety. 74.25 Development and Maintenance, 10.5 Legislative & Administrative, 6.25 Community Services MOU salary increases averaging 3 to 5% per year - 5% POA, 4.4% IAFF. 3.1% Miscellaneous Health premium increases averaging 11 % per year - 9,5% Kaiser. 12.6% PacifiCare . $21.3 million increase in PERS costs since FY 2001/02 (from $6.5 million in FY 2001/02 to $27.8 million in FY 2007/08) - 17.4%to40.3%forsafety - 8.7% to 28.7% for miscellaneous . Personnel services have increased from 72.3% to 81.4% of General Fund budget since FY 2001/02 6 1-28 Attachment B - Presentation from March 1 Council Budget Workshop ~\It- :;;{1-- U""Of (HULA VISTA Budget Trends: Personnel Services Share of General Fund Budget Millions $180 $160 $140 $120 $100 $80 $60 $40 $20 $- ~~ ~~ ~~ ~~ ~oo ~~ ~oo FY 2007/08 General Fund Revenues: $171.7 Million . i Discretionary Revenues . i Flat Programmatic Revenues . 1 One-time Revenue . 1 RDA Staff Time Reimbursements FY07/08 Projected Revenues $170.1 million $6.6 million $0.1 million ($4.0 million) ($1.1 million) $171.7 million FY06/07 Adopted Revenues 7 1-29 Attachment B - Presentation from March 1 Council Budget Workshop ~11t- ~!~~ em Of CHVLA \'ISf.\ Revenue Trends Discretionary vs. Program Revenue $180,000 $160,000 $140,000 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Projected FY 2007/08 Budget Gap: $6.3 Million FY07/08 Revenues Projections $171.7 million Minus FY07/08 Base Budget $178.0 million FY07/08 Base Budget Gap ($6.3 million) 8 1-30 Attachment B - Presentation from March 1 Council Budget Workshop Changes from Initial Budget Projections I I i i I I i , ---L- . i program revenues - Tow contracts i vehicle impound fees, Fire Prevention, Nature Center I I I Current Projected Budget Gap I . 1 Transfer of Public Liability Expense to Public Liability Fund $10.1 million ($1.3 million) ($0.7 million) Initial Projected Budget Gap . 1 in potential "wildcard" issues . T cell phone site revenues ($0.5 million) ($0.9 million) ($0.4 million) . T grant revenues $6.3 million Program Revenues & Net City Cost . Program revenues are broadly defined as those revenues generated by a given program or activity (e.g. recreation fees, building permit fees, sewer service fees). GENERAL FUND BUDGET - PROGRAM REVENUES NET CITY COST 9 1-31 Attachment B - Presentation from March 1 Council Budget Workshop Discretionary Revenues . Discretionary revenues are broadly defined . as those revenues that are generated not by any given program or activity, but by general or specific taxing authority (e.g. property taxes, sales tax, and vehicle license revenues). Net City Cost Recreation 5% Planning & Building 3% Community ~ Development 1% 10 1-32 Attachment B - Presentation from March 1 Council Budget Workshop Projected Sales Tax Growth FY2000 to FY2013 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% FY FY FY FY FY FY FY FY FY FY FY FY FY FY 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Five Year Forecast: Sales Tax Revenue Projected to Fiscal Year 2013 Millions $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 11 1-33 Attachment B - Presentation from March 1 Council Budget Workshop ~II?- ~l;;:;;: Five Year Forecast: UTYOf CHUIA VISTA Sales Tax Per Capita /' $350 , $300 $250 $200 $150 $100 $50 $- Carlsbad Chula DelMar $241 Vista $106 $328 County Average $139/State Average$141 . General Retail o Construction B Cajon Escondida Irrperiaf National San [lego $220 $205 Beach $25 City $243 $152 . Food products 0 Transportation o Business to Business D Miscellaneous ~II?- ~JL Five Year Forecast: em- Of CHUIA VISIA Growth in Assessed Value 25.00% -;----.....-- 10.00% /\ I . / \ .. ____J '\ / ,,/ /~\ ! --I I , 20.00% 15.00% 5.00% \ \ \ . -"........ ~" ". 0.00% 1995 1997 1999 2001 2003 2005 2001 2009 2011 2013 ~ Chula Vista ~ C()u_n!y Overall 12 1-34 Attachment B - Presentation from March 1 Council Budget Workshop ~I{?- ~l:::::: Five Year Forecast: em Of CHUlA VISTA Debt Service Millions $14.0 $12.0 $10.0 $8.0 $6.0 FY04 FYOS FYOS FY07 FY08 FY09 FY10 FY11 !FY12 FY13 $2.5 $1.6 $4.1 $6.7 $7.5 $7.0 $7.1 $7.1 $7.1 I $7.1 $3.3 $4.9 $6.2 $6.6 $6.2 $6.3 $6.4 $6.5 $6.6 I $3.9 $4.0 $2.0 $- [] Non General Fund . General Fund ~I{?- ~l"", Five Year Forecast: effi'Of CHUlA VISTA Projected Deficit/Surplus Summary $225 Millions $200 $175 $150 $125 , 2006 2007 , I I 2010 ! 2005 ! 2008 I 2009 2011 2012 2013 Actual ktual Est. Est. , Est. Est. Est. Est. Est. f] Expenditures $143.2 $158.0 $167.1 '$171.8 !$181.3 $188.8 $194.7 $202.0 $206.7 II Revenues $137.8 $157.8 $166.6 $171.8. $180.0 $188.2 $195.91 $203:.2 $209.5 --r- Surplus I (Deficit) _~j54) $(0.2) ! $(0.5) $- I $(1.3) $(0.6) $1.2 f-!:!;2 $2.7 I Reserves 9.70% 8.80% i 8.50% I 8.400;;-1 7.20% 6.60% 7.10% I 7.400/; ~50%-1 13 1-35 Attachment B - Presentation from March 1 Council Budget Workshop ~II?- ""l-- General Fund: Five Year Forecast nlynf CHULA VIST,V General Fund Reserves Projected to Fiscal Year 2013 5% 30% 25% 20% 15% 10% 0% FY FY FY FY FY FY FY FY FY FY FY FY FY FY 00 01 02 03 04 05 06 07 08 09 10 11 12 13 TOT Comparison Data Transient Occupancy Tax Revenue per Capita $140 o Stockton . Escondido . Ch u la Vista Fremont Riverside o Oceanside o Glendale o San Bernadino . Bakersfield . Huntington Beach _Irvine . Carlsbad 14 1-36 Attachment B - Presentation from March 1 Council Budget Workshop Five Year Forecast Budget Process & Next Steps ;; March to April Mid April ... (04/18?) Late April to May :, un> Early June City Manager/Departments to finalize proposed reductions to close budget gap Budget Workshop to review proposed measures to close budget gap Proposed Budget document developed and submitted to Council Late May Council Budget Workshop Budget presented to Council for adoption 15 1-37