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HomeMy WebLinkAbout2011/06/21 Item 09 Additional Information~~~r, CHU~IA VISTA Office of the City Attorney OFFICE OF THE CITY ATTORNEY MEMORANDUM To: Mayor Cox and Councilmembers Aguilar, Bensoussan, Castaneda and Ramirez From: Glen R. Googins, City AttorneyL~~~`"-- Bart C. Miesfeld, Sr. Assistant City Attorne~(.Jt/v" Date: June 17, 2011 RE: City Attorney Budget and Related Issues - a Supplemental Report This memorandum supplements the primary staff report regarding the overall City operating budget with additional information regarding the proposed City Attorney's Office budget. Related issues raised by a number of Council members are also addressed. This is NOT a confidential document and is intended to be shared with the public. I. Support for Addition of Deputy City Attorney Position In an effort to cut costs and improve services, the City Attorney's office is proposing to add one full time Deputy City Attorney III ("DCA") position to the Litigation Division. We expect the additional DCA to significantly reduce costs currently expended on tasks performed by outside counsel. Projected outside counsel cost savings should far exceed the cost of the new-in-house position. Moreover, no new monies will be needed to fund the additional DCA. Instead, the additional DCA will be funded by reallocating existing funding levels from (a) the City Attorney's Office outside counsel budget (to be reduced by $50,000); and (b) the City's Public Liability Trust fund (to be reduced from $900,000 to $753,000). The quality of risk management service provided by the department should also be greatly enhanced. The expected cost savings and improved service are discussed in more detail below. 276 Fourth Avenue, Chula Vista, CA 919]0 ~ www.chulavistaca.gov ~ (619) 691-5037 ~ fax (619) 409-5823 A. Costs Savings Historically, the three most significant areas of litigated cases in Chula Vista have involved (1) law enforcement (2) personnel, and (3) matters involving allegations of a dangerous condition of public property under Government Code section 835. Cases involving police or law enforcement/safety personnel generally implicate the Fourth and Eighth Amendments of the United States Constitution with allegations of excessive use of force and/or false arrest. Police cases tend to be legally complicated, emotionally charged, and hotly contested. Human Resources and employment related cases also tend to be legally and emotionally complex and generally involve numerous causes of action under local policies, labor agreements, and state/federal statutory and common laws. Damages claims in employment cases tend to be very significant due to allegations of lost wages/benefits, and allegations of malicious and retaliatory motivations for adverse employment actions against the plaintiffs. The employment arena also tends to involve higher outside counsel fees. Assertive pretrial discovery and motion work play an especially important role in the successful resolution of employment cases. Cases involving allegations of dangerous conditions of public property are statutory in nature and generally have several legal defense arguments the City may assert. Dangerous condition cases generally involve complaints of personal injury and other economic damages. We recently performed a review of the costs associated with the use of outside attorneys over the past three years within these three practice areas. The review indicated that there are tasks being performed by outside counsel that if performed using an additional in-house DCA could produce significant cost savings. Two areas of work by outside attorneys that are creating relatively large amounts of billable hours are: (1) motion/pleading preparation, and (2) pretrial discovery. Assertive pretrial discovery and motion work play an especially important role in the successful resolution of these most common types of city cases. (1) Motion/Pleadin~ Preparation During the normal course of a case in litigation there are times when detailed formal written papers must be filed with the court. Early in the litigation the papers that need to be filed are called "pleadings." These pleadings consist of the original complaint initiating the case and any written response to the complaint (e.g., demurrers, answers, motions to strike, etc.) Also during the litigation, up to and during trial, numerous dispositive and non-dispositive "motions" must be filed with the court. 2 City of Chula Vista The nature of the motion/pleading work is such that it requires large amounts of concentrated hours to research, draft and argue before the court. For example, a motion for summary judgment ranges on average from 40 to 100 hours to research and draft. Current staffing does not allow for the work to be done in-house. It's estimated that an average of ten major motions per year are required. Current outside counsel rates range from $250/hour to $550/hour (e.g., 10 motions/yr x 60 hrs/motion x $300/hr = $180,000/year savings.) (2) Pretrial Discovery The "pre-trial discovery" phase in the anatomy of a litigated case is where the parties investigate and "discover" evidence and legal theories to be used at trial. Legal tasks associated with this phase of a case routinely include depositions of witnesses, obtaining documents by subpoena, written interrogatories/request for admissions/and requests for production. The opposing party also gathers evidence against the City during the discovery phase that requires organizing and responding on behalf of the City to these same discovery procedures. An analysis of past outside counsel work indicates that on average two to three cases per year require significant pretrial discovery. It is not uncommon for the discovery work in such cases to exceed $50,000.00. It is anticipated that the addition of a junior to mid-level DCA would be able to invest large blocks of time to pretrial discovery work that could materially reduce the cost lost to outside counsel. (e.g., 2 cases/year x $50,000/pretrial discovery = at least $100,000.00/yr savings.) B. Improved Service Here are some examples of the improved service expected from the additional DCA. Note that improved service also means more cost savings. In General. The addition of a DCA in the Litigation Division will not only save costs by reducing outside counsel use, it will also improve the quality of service to the City and its departments. The in-house DCA will have a better understanding of his or her client and logistically will be more efficient. Use of outside counsel requires travel to the City to engage personnel and to review discovery on site. It is difficult, and costly, for outside counsel to develop a deep understanding of personnel and process within the City. A DCA, as a direct member of City staff, will inherently have a more intimate understanding of the City and its personnel. This will translate into more efficient case handling. -, Citv of Chula Viso Litigation and Settlement Strategy. An in-house DCA can be more aggressive in propounding discovery and bringing motions, this will improve the City's settlement posture on cases. Outside counsel usually do not initiate early discovery and are reluctant to file motions that are not dispositive in nature. Using a DCA for early discovery and motion work increases the litigation costs of the City's adversary and arms the City with more robust evidence to defend their case, without the added defense costs of outside counsel. Within alternative dispute resolution settings (like mediation and settlement conferences), the opposing attorneys use the cost of outside City litigators to increase settlement demands. Accordingly, the ability to keep more cases in-house will reduce the effectiveness of "cost of defense" type settlement demands by opposing parties. The ability to be more aggressive in bringing early dispositive and non-dispositive legal motions at no additional cost by using a DCA should also translate into better results both in costs of suit and ultimate payouts. An additional in-house DCA will also allow the City Attorney's Office to be more proactive in recovery of fees, costs and damages. Risk Mana ement. Increased interaction with Risk Management, risk assessments, and more departmental risk management training is intended and will also be possible with the additional DCA. Enhanced and proactive risk management capabilities will be particularly useful with the Human Resources, Police, Fire, and Engineering Departments. The office's capacity to have "litigation review" of contracts will also be enhanced, improving the defensibility and risk allocation in the City's many contracts. Assisting with the identification and mitigation of dangerous conditions will also be addressed. The recent $1.8 million settlement between the City of San Diego and an injured motorist is a good example of the kind of exposure City's face when such matters are not handled with litigation risks and issues in mind. Management and Reporting More efficient management of outside counsel activities, including strategies and costs, should be another benefit of adding a DCA. It is also envisioned that the additional DCA would be tasked with obtaining and analyzing risk management and litigation data for regular reports to the City Council. Attorney capacity to assist other Departments. The additional DCA, obviously, will also free-up some existing attorney resources to better serve other departments. Given current staffing, the departments expected to benefit the most from this are Police and Fire. In addition, a neighborhood prosecution unit deputy city attorney that is wholly grant funded is currently supporting the police department. The 2010 original grant funding was for a limited two-year period. The proposed DCA III position would have 4 City of Chula Vista similar experience/background that would facilitate a transfer of responsibilities to support the police department in the unfortunate event that we are unable to secure new funding for this position. Advancement of City Attorney Strategic Plan. The proposed DCA addition to the litigation division is a product of- and also advances- many elements of the City Attorney's office strategic plan. We have begun the process of taking a critical look at all of our services and processes, with the ultimate goal of improving quality and efficiency. Other near term strategic plan projects include: (1) a "kaizen event" for Public Records Act requests (scheduled for the first week of August); (2) peer review of City Attorney policies and procedures by City Attorneys from Oceanside and Carlsbad; (3) the addition of formal project management and tracking systems; (4) opinion, contact, resolution and ordinance "banks"; and (5) internship program expansion. C. DCA Position Characteristics The type of experience and background required to perform motion and pretrial work as noted above would be that of a junior to mid-level litigation attorney. It would be imperative that the additional attorney has some pretrial litigation experience along with employment, personal injury, and, ideally, civil rights defense and public safety representation experience. It appears that a DCA III position would adequately be classified at the mid-level position. The current legal resources market is extremely competitive due to the difficult economic environment making it an ideal time for the City to be pursuing amid-level litigation lawyer. One example: The City Attorney's Office for the City of Oceanside is currently seeking applications for a junior level attorney. The application period recently opened and Oceanside has already received over 110 applications for the single opening, including many high quality applicants. The current salary range for a DCA III position is from $117,853 to $143,250 per year. The total annual cost to the City, including all benefits and pension cost to the City for the position, as determined by the Finance Department, is $197,000. For an estimated 2,000 working hours per year that translates into an approximate cost of $100 per hour. As discussed above, this compares very favorably to current outside counsel billable rates, which range from $250.00 to $550.00 per hour. D. Source of Funding The DCA III position is proposed to be funded by reallocating $50,000 from the existing budget within the City Attorney's Office for outside counsel and reducing the existing Public Liability Trust fund budget by $147,000. In other words, no "new 5 City of Chula Vista monies" for the proposed DCA position are being requested. Instead, the position is funded by the reallocation of monies from different existing funds, all of which are oriented towards "risk management" within the City. The main City staff report discusses Public Liability Trust funding in greater detail. Although no changes are recommended at this time, the City Attorney's office has initiated, with Risk Management and Finance, a critical review of Risk Management reserve levels. Our intent is to report back within the first quarter of FY2011/2012 with an evaluation of whether or not these accounts are adequately funded. If the accounts are overfunded, this could free-up "one-time" funds for reallocation by the City Council to other City services. If the accounts are under funded a plan would be developed and presented for Council consideration to build up to more appropriate reserve levels. E. Staffing Levels To place the proposal of an additional DCA in context, the following information is provided. Current staffing levels in the department are seven (7) attorneys and three (3) support staff.' The proposed DCA position would increase attorney staffing to eight (8). An additional attorney assigned to the Neighborhood Prosecution Unit with the Police Department is grant funded, but only through June 2012. A historical review of staffing levels within the City Attorney's Office reveals a decrease over the past five years from a peak in 2006 of 9 attorneys and 5 staff. Proposed staffing levels for 2011/2012 are numerically the same as in FY 2001/2002. A chart of staffing levels over the past 10 years is provided as Exhibit A. A review of staffing levels at different City Attorney offices with City populations both above and below the population of the City of Chula Vista reveals that current staffing is well below the average of those compared. Of the ten (10) cities nearest in population, Chula Vista is 7`h in attorneys per capita and 8~' in overall staff per capita. The chart attached as Exhibit B provides additional detail. F. Conclusion The reallocation of existing funding currently expended on the use of outside attorneys to provide for amid-level DCA position could result in significant savings and reduction of reliance on private attorneys. The justification for the addition of a DCA is further supported in light of the fact that the new attorney should provide better and more efficient services to the City. Such ' There is also an unfunded "Law Office Manager" position listed in the budget which was added last year. While this position is important, given current economic circumstances, until direct costs savings can be identified this position is proposed to remain "unfunded". 6 city of ch«la vista additional support would appear to be particularly valuable to the public safety, public works and human resources departments of the City. II. City Attorney Purchasing Authority for Outside Attorney Fees City Attorney "purchasing authority" relative to the limits and procedures for hiring outside attorneys and other professional services are set forth in Municipal Code Section 2.56.ll0.F. This Section states "In accordance with Section 503 of the City Charter, the city attorney oversees contracts for legal and related professional services." Under this provision the City Attorney has authority to hire outside counsel under contracts up to $50,000. City Council approval is required for any contract in excess of $50,000. We believe that this level of purchasing authority is necessary and appropriate for the efficient operation of the City Attorney's office. Even with the addition of a DCA, the City Attorney's office will undoubtedly need outside counsel to address specialty areas of the law, to handle intense, short term projects where current department workflow prevents in-house staffing, and to handle longer term projects that would otherwise take staff attorneys away from necessary day-to-day legal support responsibilities. Areas of expected and necessary use of outside attorneys include: specialty litigation and appeals, trial work, bond counsel, bankruptcy, elections, civil service commission staffing on discipline cases, CEQA and land use advise on major projects, telecommunications, specialty transactions, redevelopment, etc. Part of the efficient administration of any office is determining when and how to utilize in-house resources and when it is more efficient or necessary to contract for outside assistance. This decision is typically based on the amount of in-house staffing available, the expertise of in- house staff and current work demands. It is this rationale that affords the City Manager $100,000 in purchasing authority for supplies, and $50,000 for consulting services. The same rationale applies to the City Attorney's office. Moreover, because of the specialty nature of legal work, the City Attorney is uniquely qualified to evaluate the best attorney for any particular needed legal service. Legal deadlines also frequently create time constraints that do not allow for a formal Council level approval process when outside counsel is required. Delegation of purchasing authority is also consistent with LEAN principals that favor delegation and discourage micro-management. To put the current level of City Attorney purchasing authority in context we have attached for your information a summary of purchasing authority from the cities with elected City Attorneys that responded to our inquiries. (Ten of Twelve responded.) As you will see Chula Vista's City Attorney authority is well below the average, with many cities having no purchasing limit. See Exhibit C. The maintenance of at least the existing levels of City Attorney purchasing authority is also consistent with newly added Charter provision stressing the importance of having an independent City Attorney. 7 City of Chula Vista III. Board of Ethics and Campaign Ordinance Issues At the June 7`'' budget hearing one Councilmember proposed to establish a separate outside attorney services budget for the Board of Ethics. The suggested funding level was $30,000. Currently the Board of Ethics ("BOE") has a budget for expenses of $380. Per the Charter, attorney services are provided by the City Attorney's office. Municipal Code Section 2.28.110(C) also designates the City Attorney as the BOE Secretary. We recommend no change in the current arrangement. Per the Charter the City Attorney is charged with providing the BOE with legal advice. BOE legal demands are not extreme, and we are currently staffed to provide very high quality advice to this group. Legal support could be provided by outside counsel provided that the City Attorney was the hiring authority. Regarding funding for Campaign Contribution ordinance enforcement, as you may recall, the $100,000 funding allocation from previous years was eliminated by City Council action in January 2011. Funding for this activity has been absorbed into existing legal services accounts with no increase in funding levels. Additional appropriation may be necessary if there is a high demand for outside legal services this fiscal year. 8 City of Chula Vista CITY ATTORNEY AUTHORIZED POSITIONS City Attorney Senior Assistant City Attorney Assistant City Attorney Deputy City Attorney I/I I Deputy City Attorney III Executive Secretary Legal Assistant Senior Legal Assistant Law Office Manager Total Permanent FTE's FY 2001 FY 2002 FY2003 FY 2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 1 1 2 2 2 2 2 2 2 1 0 1 1 3 1 1 1 1 2 2 2 1 2 2 0 2 2 3 3 3 3 3 4 2 2 0 1 1 1 1 1 1 1 1 0 0 3 2 2 2 2 3 3 3 2 2 2 0 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 1 10 11 11 12 12 14 14 14 12 10 11 n ... Y 0 '~ ~ ~ ~ N x O ~ ~ H., ~ ~ ~ ~ O ~ Y N .~-r A~ r. QQ cITY POPULATION ATTORNEYS SUPPORT TOTAL. PER PER (PER 2010 STAF'F' CAPITA CAPITA '. CENSUS) (ATTYS (ALL ~~~, ONLY) STAF'F') Long Beach.. CA 462,257 21 1 ~ 34 ~?>012 13,596 Anaheim, CA 336,265 1 I Civil Unit ~ 28 16,81 ~ 12,009 ~ 9 Prosecution 3 Unit Santa Ana, CA 324,528 8 4 12 40,566 27,044 Riverside, CA 303,871 14 ~~ ~5 21,705 12,155 Stockton 292,133 6 2 8 48,689 36,517 n CITIES ABOVE POPULATIONS OF 250,000 CITIES BELO~~' POPULATIONS OF 250,000 ll CHULA VISTA 243,916 7 3 10 34,845 24,392 Modesto 21 1,536 6 1 U 16 35,256 21,153 San [3e.nardino, C;a 209.924 10 7 17 20,992 12,348 Glendale, CA 191,719 13 ~ 20 14,748 9,586 ~-`~"`~"--`°"~`a~~'~c~ 189,992 7 8 15 27,142 12,666 n ara 0 ~' 0 0 ~e ~C ~x O `" ~~ ~ y ~ ~ '~ ~s Average per Capita (Attys Only): 28,277 Average per Capita (All Staffl: 18,147 EXHIBIT C Summary of Elected City Attorney Purchasing Authority Albany No set limit within approved budget for outside counsel. Oakland Redondo Beach San Francisco San Rafael San Diego Up to $250,000 (same as City Manager), but practice is to inform and seek approval for significant cases/expenditures. Long Beach City Attorney has authority up to $95,000. Above that City Council must approve. Huntington Beach City Attorney has authority up to $50,000. Above $50,000 and up to $100,000, City Manager must also approve. Above that, City Council must approve. Chula Vista City Attorney has authority up to $50,000. Above that City Council must approve San Bernardino City Charter provides for City Council approval of outside counsel. Los Angeles Did not respond Compton /~c~~ i t7 u -~c~1 ~ ~ F~ r-ry~,t-~ ~r~ ~ C~ur~e~im~,,~-,b~,,-- /~caJt,~.~ la.~ APPROVAL OF OPERATING & CAPITAL IMPROVEMENT BUDGETS AND ~I~fi~i"G APPROPRIATING FUNDS FOR FY 2011-12 MOTION: Move to approve the resolution that the City Council and Redevelopment Agency adopt the operating and capital improvement budgets for the city of Chula Vista....for fiscal year 2011-12 and appropriating funds for the fiscal year ending June 30, 2012 with the following modifications to the operating budget: Expenditure Increases A. Budget funds to the appropriate line item(s) within the Library Dept. budget to permit the Civic Center and south Chula Vista libraries to be open an additional 15 hours per week ..........................................$657,000 B. Budget funds to the city clerk's Elections budget (line item 03200/6501) to enable potential placement of two initiates on the_ball.at in the next statewide election ....:.............................................•;,.$600,000 C. Budget funds to the Recreation Dept. budget for Norman Park Center (budget item 17510) to permit the Center to be open an additional 15 hours per week ...............................................................................$48,000 D. Full time instead of half time webmaster ...................................$57,000 E. Use of Van for Grafitti Removal (budget item 16725) .................$57,000 TOTAL NEW EXPENDITURES ...................................................$1,419,000 Kevenue Savings. A. Conservative estimate of year-end savings (appropriated in 2010-11 but nodexpended} .........................................................................$600,000 B. Fiscal impact of unallocated increased Recreation (not including ball field rentals; including picnic shelter rentals} and Parking fees approved by Council on June 7, 2011 ............................................................$27,,000 C. Reduce funds allocated for outside counsel from $1,160,219 to $960,219 ........................................................................................$200,000 D. Reduce expenditures in the "Supplies & Services" category of the General Fund by approx. 2.7% (specific line item reductions to be deter-~ined by City Manager,~ .......................................................$350,000 TOTAL REVENUE SAVINGS .....................................................$1,421,000 (((/O ~ ~ r~ `~ ~~ '~1i v m ~~ ~ r o N N ro v v v rn o co r N f~ M M O r M P O~ ~ M ~ M N 1~ O Y CO O r O r V (O s1' OJ M cD (O N M M CO. O ~ O 1~ ~ ~ O M M O~ ti ~- O N N N C Cp ~ O u7 M (O c0 61 M M N OJ ~ 1~ N. 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LL LL lL ~ LL O ~ N ~ >> O N ~ d i N N N O f0 ~ ~ O D p (n W O O O O O O O D U U U O D U O U W> m F- ~ I- Cn UJ H a (n r U Z Cn J Y U N N N N N lA M qp to O N t9 h t~0 O O N O M V t]0 N M N CO O N M O N M V n n h h tb O M W W tb W t7) O O O O N M M M V~ ~f V~ to ~~ h r r h M M M M M M M M M M M M M 't7 ~~ V V V V ~Y V V ~ V ~ V V ~~~ tt cr a} o ~ 0 0 0 0~ v ~ ~- ch N ~n M v M o v M~ V m o ~ o O n o v o ~n o o~ rn o o~ co _rn _rn N o ~n ~n v ao n o n n o ~ O O cD V O N I~ CO O O N CO O W O M O~ M n ON V O r O ~ Q O M (~i N M N V M t~ M ~~ O~ O c1 n e0 lfJ 61 ~ O ~ O~ ~f ~ lC7 CO c0 M M M O n~ O O N ~.. a O N r O~ b tp OJ t~ «~ O N 'Q O O r O..O O M O r b ~ CO <i N ~ .- .- .- N Q~ ~ O N O O O t0 O O O 00 ~ 0 0 o a s O ~ ~ O M O O O O CO O n0 O n O GO (p O V O ~ N o0 O O N N (O N O N O O O O ~ ~ fD N O M O n M O V O O ~A O V O ~ O 0 0 CD ~ V~ N~ M~ M O V M O V (O O 0 o n_ n co rn rn N o ~n ~n V eo n o O N O M CO O_ 00 O M O~ M n 0 O M O O~ c0 M n M tf) O of (O M N M t1') ~ 00 N a0 V (O M O n V O m N (O V CO N ~ V 00 e- N <f (O N ~-- O O 6] O O O O O O 0o V n O O M O O n O O O O 01 (O ~ N M N n ~ N N N n V O ~ N I~ O Q1 O n O n n O O M ~, CO M ~f7 N ~ ' O ' O N Q1 M N a l0 O N O M M N n N O O O O O 0 0 ~ O M CO O (O W e- O O O N co o ~ ~ ~ ~ n n co r~ N ~ ~ ~ r f0 N V O1 M r W ~ M O ~ M C p J J o O p ~ ~ ~ LLI ~ u, ~~~ Q m N a~i c N c a m 2 ~ d ~ O ~ p ~ ~ ~ ~ ~ Cn '~ p ~ ~ ~ N .~ •~ ~ '~ ~ o. ~~ U W U ~~ a a c o m o c ° N ~ ~ U d' LL" c o m ~ m~ E E>~ 'o p~~ o m~ :. o n. •- u. O Q~ m m c m O Q Q U c~ U~ U U m a~ ~~ V o~ ~ ~ d a _ x x ~ c v 4. Q~ J N p ~~~ m m rn o~ rn m a -o ~ o a~ Q y •~C •~ J ~ ~ c~ a~ p~ U 3~~ m m cXO Q m m -_Qo X o `m C~ N o~ ~ -o a~ ° c ~- ~ ~ o ~ ~ Q Q F F F- ~ m a~ x m - n. L co O ~, Q (.~ m m~ a ~ ~ o ti 'a 'o 'o •o .a ~~~~ Q c c~ U D aUi D O °- ~` > c N~ Q~ d d d d d~ F F in (Q H ti~~~ Q ~~a000F~`-~~°c~nc~i~c~i~t~i~c~'i~c~n~ooooo~~OF~`- ~ N n V n a0 M n ~ N M V~ M ~• to (O n (O I~ CO O ~ in to to ~~~ t0() M M O M O M O M O M O CD (O CO n 1~ r r ~~~ ~ .d'- ~ ~ __~, October 5, 2010: Manager's Budget Reduction Plan presented to City Council and public September 2010-January 2011: Negotiations with bargaining groups September 2010-January 2011: Over 20 public meetings held to discuss operating budget in all geographic areas of the community January 2011: Implementation of budget reduction plan April 14: Present balanced budget to City Council May 24: As required by City Charter, the City Manager's Proposed Budget was distributed to the City Council at least thirty five days before the beginning of the fiscal year 1 • June 7: A public hearing was held and Council discussed the fiscal year 2011-12 budget - Staff presented proposed budget that included changes to service delivery in response to issues/concerns raised by community and/or Council, including: Norman Park Center, Patrol Operations, Tiny Tots Program, Library Services, Graffiti Abatement, Park Ranger Program - Council/Redevelopment Agency/Housing Authority adopted their respective resolutions with some exceptions - Council requested additional information regarding the budget and continued the public hearing to June 21 • June 21: Public hearing and Council consideration of adoption of the fiscal year - Presentation will focus on responding to questions raised at June 7cn Council meeting and subsequent meetings with Council; including: - Long-term impact of January 2011 reductions - Use of one-time revenues - Staffing changes - Debt obligations - Pension reform savings - Police Senior Volunteer Patrol - Elections budget - Attorney services and risk management funds - Changes in fire revenues - Costs of operating the City Jail 2 • Council questions (continued) - Fiscal policies update - Elimination of hiring freeze - Addition of Grant Writer - Changes in Finance personnel costs - Cost of graffiti abatement staffing - Cost of additional hours of operation of libraries - Cost of additional hours of operation at Norman Park Center - Estimated cost to fix storm drain issue at Hilltop Drive - Outside counsel expenditures - Utility Users Tax revenue budget - Fiscal impact of Marketing and Communications Manager - Cost of Webmaster - Supplies and services savings • Key assumptions used in the development of the Five Year Financial Forecast: - Modest economic recovery (PTX 2%, STX 3%, TOT 2%) - No salary savings for attrition - RDA loan repayments averaging $1.5 million per year - Health care increases of 10% per year - Reflects salary increases for Police Officers Association & International Association of Fire Fighters per MOU agreements - No salary increases beyond existing MOU agreements - No revenues or expenditures budgeted for UUT wireless revenues - Projected pension cost increases per CaIPERS - Assumes no additional State takeaways or revenue swaps - No new positions - Final payment of the 1994 pension obligation bonds 3 Preliminary 5-Year Financial Forecast (in millions) ongoing Revenues $ 126,8 $ 121.7 $ 121,2 $ 122.5 $ 125.0 $ 127.5 $ 130.4 fine-Time Revenues $ 4.0 $ 9.6 $ - Total Revenues $ 130.8 $ 131.3 $ 121.2 $ 122.5 $ 125.0 $ 127.5 $ 130.4 Expenditures $ {129.91 $ (128.9) $ (123.6) $ (123.4) $ (127.1) $ (129.1! $ (131.6) Economic Contingency Reserve $ (2.4) $ 2.4 Surplus/(Deficit) $ 0.9 $ - $ - $ (0.8) $ (2.2} $ (16j $ (llj Fund FY 10-11 Adopted FY 11-12 Proposed Change C~neea! Fun_i 8~z1.~5 '' 776 25, -88 Ot3 Development Services .......... ........................... . 39.00 39.00 - . _ __ Ppl'ice Grant': Fund (less CBAG3 3.00 __ ' 6 00'' 3'f?0 Environmental Services 4.00 4.00 - ARRA ' 6.5fl ...: ', 5 5il' ., -1,003 Fleet 10.00 8.00 _. -2.00 Transit ' 3.00 ' 1 0~3 x:00 Sewer 46.00 46.00 RedevetopmentAgeney '; 4 OD ', 4,Dfl Housing 00 7.00_ Total Cltywid® Hess' CRAG} ', 986.75 896.75: -90c00 CBA ~~ 1; . 00 28 00 10'00 Total -All Funds 1004.75 924.75 -80.00 4 Development Services {General Economic Development Director of Economic Development 1.0 $ - Fund) Director of Conservation and Environmental Services -1.0 $ - Marketingand Communications Administration Communications Manager 1.0 $ - Developnrent Economic Development Economic Development Officer Services {GFJ -1.0 $ - Ad i i i ti C i Special Events Coordinator 1.0 $ - m n strat on ommun ca ons Communications Coordinator -1.0 $ - Directorof Human ResourcesJlnformation Technoogy Human Resources Administration Services De artments 1.0 $ 12,750 i Director of Human Resources -1.0 jlnformation ,Technology Di rector of I nformati on Technology 'Services Administration Services -1.0 $ (216,850} • • • ~ ~ ~ ..~ __ _.__ r LYh ~, - Associate Accountant -1.0 $ (28 035J Finance Com roller Division Accountin Technician 1.0 ~ Princi aI Mana ementAnal st -1.0 $ (5,160) Pubtic Works Fiscal Services Senior Mana ement Anal t 1.0 ~ Fire En ineer -1.0 (Fire Trainin Fire Ca taro 1.q $ 16600 ~ De uty Buildin Official ~ -1.0 Building Services guilding Official/Code $ 24,145 Development Enforcement Mana er 1.0 (Services Fund i DeveloprrientPlanning Assistant Planner -1.0 $ 8,710 Associate Planner 1.0 ~ LandPlanning Senior Civil En ineer -1.0 $ 7180 _ Princi al Civil En ineer 1.0 Net Im act of Chan es Ci wide -1.0 5 • Police Department (General Fund) -Reinstated 2.0 Police Agent positions • Police Department (Grants Fund) -Added 1.0 Police Sergeant, 1.0 Peace Officer, 1.0 Police Community Relations Specialist, and 4.0 CBAG positions to be offset by grant funds • Administration Department -Reassign Police Administrative Services Manager to Continuous Improvement Manager (pilot program) • City Attorney -Added 1.0 Deputy City Attorney III cost offset by other expenditure reductions Annual Debt Service Obligation of the General Fund ~< 0 ,2 ,fl _. ,4 . " ~ s .~ 4 _ ..~m-,-„v,,.,. ~ _ ~;.:. - Q FY09 FYIO FY1'3 FY 11 FY73 FY14 ~ Shopping MaR parking fV Chj7D03 ftef COP &Shopping k1N1 COPj1003 Ref COP s Pension Oblig~tron 86nd5 ^(inan~ixl SYStemsJ20D3 Ref COP library System tapital4ease e8P0 Mha Radio Systemh D43 Ref COP ~Uxporativn Yard-20UCICOP 800 Mttx Equiprnent-70W C.(W Vofke Faaiity2002 U.?P v Gvic Center Expansion ZODa COP m Gvic Center Expansion 20D6 CGP .. G~c Centee fzpansxm 2010 6 Redevelopment Agency -Bonded Debt Payments by Fiscal Year $6 -- _ __. _.._. _. _.._ .__ _. „~ r.__ _.. $~ 2006 ERAF $q rn ^ 2005 FRAF "" 2006 RDA TARS ~ $3 ^ 2003 Refunding COP $2 ^ 2008 RDA TABS $1 ~'',-~ FY 10 FY 11 FY l2 FY 13 FY 14 Fy 15 FY 16 Outstanding Interfund loans as of June 30, 2010 (Audited Financial Statements) i i f ~iLaan5000a[fed OYef SeVerill years prlmallly j General Fund ~~ Redevelo ment Agen~_.. due to 93 COP ~ $ 24z362~453 ~^ Public Facility Dev Impact loans related to CC Phase IR -bond ', ( General Fund Fee restructuring ' $ 1,502,554 __._ .. Transportation Dev PublecFacility Oev Impac. '~ i Irnpad Fee ._. Fee Loan to fund COP bonded payments due _..._. _ _. .__.. ;. $ 10,909,837 TransportatianDev Im act Fee ~ Western TDIF _ '. Loan to fund Regional Arterial Study ~ ~ i $ 184,380 I ',:Inter-project area loans occurring over IBayfront Project Area Merged Project,Area several years $ 4,953,565 .Law & Mod Flousrng Fund Redevelopment Agency ._Ioan to fund State RDA takeaway $ 4, 154,A50 ~ Storm Drain&SaltCreek .Loan for construction of Salt Creek Trunk ~: Trunk Sewer _ DIF ~~ ;Sewer _ ? $ 17,072,065 (Sewer Faci li ty Replacement Fund Storm Drain ':Loan related to CMP replacement/rehab ~ $ 746,117_ Tofal interfund ltwns $ 6 815,821 7 • Pension reform savings -estimated FY12 savings total $3.94 in the General Fund and $0.7 in other funds • Police Senior Volunteer Patrol -Department is evaluating the feasibility of SVP members assisting with enforcement of sports field allocations • Elections budget - FY12 budget totals $160,000 based on the cost of holding a General Municipal election scheduled for tune 2012 g • Attorney Services and Risk Management -Transferred budget of $200,000 from Non Departmental to City Attorney, total General Fund budget for (outside) attorney services $496,780 - Public Liability Trust Fund -split budget for Public Liability Expenses between Public Liability Expenses and Attorney Services - City Attorney purchasing authority - Board of Ethics -recommended proposed policy from the Board of Ethics to be considered by Council • Fire Revenue -difference between current year projections and FY12 budget reflects the elimination of one-time revenues and a reduction in license and permit revenues • Jail -Department recently entered into a MOU with US Marshal's Office, estimated cost of operating the jail reduced to $85,300 • Fiscal Policies - in depth review will be brought to City Council in the fall of 2011 9 • Hiring Freeze -the elimination of the hiring freeze pertains to Council authorized positions, no new positions can be added without Council approval • Addition of Grant Writer -implementation of grant program eCIVIS in progress, will re- evaluate addition of grant writer position as funding becomes available • Finance Personnel Services -Eliminated 1.0 position but salary savings experienced in the current year and transfer of analyst position result in a projected increase in costs • Graffiti Abatement Program- estimated cost of enhancing budget with hourly staffing totals $57,012 10 • Increased hours of operation at Libraries -the estimated cost of adding 30 additional hours of operation per week at Civic Center and South (combined} total $657,000 annually • Increased hours of operation of Norman Park Center -the estimated cost of adding 15 additional hours of operation at the Norman Park Center is estimated at $48,000 annually • - - ~ - ~ • Estimated cost to fix storm drain issue at Hilltop Drive -the cost of this project is estimated at $2.6 million • Outside counsel expenditures -the total expenditures for outside counsel by fiscal year are estimated as follows: .- . 2008-09 $1.5 million 2009-10 $1.3 million 2010-11 $1.4 million 2011-12 $1.2 million 11 • Utility Users Tax -these revenues post to the Non Departmental org key • Fiscal Impact of Marketing and Communications Manager -sufficient revenues have been identified to offset the cost of adding this position, therefore no net fiscal impact is anticipated • Cost to restore full-time Webmaster -the cost to restore this position from part-time hourly to full-time benefitted totals $56,300 • Possible savings in General Fund Supplies and Services budget -the budget for these types of expenditures has been reduced over the last several years FY08 actual $ 15,345,356 FY09 actual $ 13,275,817 FY10 actual $ 13,564,822 FY11 projected $ 13,692,416 FY12 proposed $ 12,787,516 12 • Since the June 7t" budget presentation, the proposed fiscal year 2011-12 budget has been updated to reflect the following changes: - The addition of $150,000 to the Public Works Department's personnel services budget to be offset with an increase in picnic shelter rental fees revenues - The transfer of $200,000 budgeted in attorney services from Non-Departmental to the City Attorney's budget • Staff further recommends making the following changes - Adding funding for the Graffiti abatement program and restoring Webmaster position to be offset by new revenues resulting from the 6/7/11 Council approved fee changes (excludes sports field rental revenues) - Transferring $663,439 from Public Liability Expense account to Attorney Services account in the Public Liability Expense Fund • Staff will continue to evaluate other program recommendations and return to Council mid year as funding becomes available 13 General Fund $ 123,630,720 $ 123,630,720 Budget Adjustments (6/21 report) $ 150,000 $ 150,OOD Webmaster $ - $ 56,300 Graffiti Abatement Program $ - $ 57,012 Council approved revenue adj $ 113,312 $ - Updated General Fund $ 123,894,032 $ 123,894,032 e • General Fund $ 123,630,720 $ 123,630,720 Budget Adjustments $ 263,312 $ 263,312 Updated General Fund $ 123,894,032 $ 123,894,032 Other Funds (from 6/7J2011 report) $ 144,311,964 $ 164,975,205 All Funds Budget $ 268 205'996 $ 288,869,237 .., All Funds Budget $ 268,205,996 $ 288,869,237 Reserves (prior yearresources)* $ 20,663,241 $ - Total $ 288,869,237 $ 288,869,237 Note: the proposed General Fund budget for fiscal year 2011-12 is balanced and continue s to provide core services to the community. For other funds, the budget refl ects a projected impa ct to reserve levels totaling $20.7 million -this reflects the expenditure of funds collected in prior years for capital im provement projects and debt service costs. 14 • That the City Council/RDA adopt the City Manager's Proposed Budget and appropriate funds for the fiscal year ending June 30, 2012 • That the City Council amend the Compensation Schedule and Classification Plan to reflect the addition of 5 titles and the elimination of 6 • That the City Council place Ordinance C on first reading 15