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Home My WebLink AboutSS4 - Budget Updaterrco: H N ,U ��k 4 \LjF� �I Agenda Item No. SS4 May 11, 2010 Council Presentation May 11, 2010 FY 2010 -11 Proposed Budget Purpose of Today's Presentation • High -level review of the proposed budget. • Revenue and Expenditure Estimates • Assumptions • Reminder: Fiscal Sustainability Plan • Challenges ahead. • How the public can find out more. • What's Next: • May 25, 2010 — Study Session — more in -depth (including of CIPs) • June 22, 2010 —Budget Adoption What's the Fiscal Picture Today? • Significant cuts made in FY 2009 -10: • ERIP — 40 FTEs removed from the payroll. • Contracts re- opened, renegotiated (Fire, Lifeguards, vendors). • Contracting Out of Street Sweeping • Yet: • No impacts to line public safety staffing — fire, lifeguards, police — we hope to be able to continue this into FY 2010 -11. • No reductions in library hours. • Budgets headed towards balance with: • Additional negotiations concessions (pension pick -up); • Continued restructuring (resulting in better service, too); • We've banked reserves for capital projects -- we're getting to the point where these will start to be spent. Distribution The budget volumes are available: • In the Reference Area at the Central Library and at each City branch library. • On -line at www.Newl?ortBeachCA.gov. Go to Departments & Services, Administrative Services, Accounting Division, Financial Information, City Budget Documents or http: / /NewportBeachCA.gov /BudgetInfo • For purchase from the Cashiers at City Hall. Fiscal Sustainability Plan 1. The City will proactively seek to protect and expand its tax base by encouraging a healthy underlying local economy. 2. The City will work to enhance and protect the property values of all Newport Beach residents and property owners. 3. The City will encourage shopping, dining, and visiting at Newport Beach stores, restaurants, and hotels. 4. The City will establish and maintain appropriate cash reserves. 5. The City will manage its Facilities Financing Plan to not exceed the 5% of General Fund expenditures threshold. 6. City revenue performance will be reviewed no less than quarterly and appropriate budget adjustments will be made in advance of the end of a budget year if revenue performance is not meeting projections. 7. The City will initiate a "results -based budgeting" approach that allows the public and the City Council to prioritize City expenditures strategically rather than simply adjusting legacy expenditures to reflect inflation. 8. The City will implement a Performance Measurement /Management Strategy as part of an ongoing effort to ensure high- quality and efficient performance. Fiscal Sustainability Plan 9. The City will consider competitive contracting of services and equipment when appropriate and where clear, cost - effective alternatives exist. 10. The City will make it a priority to be energy efficient in its provision of public services. 11. The City will establish appropriate cost - recovery targets for its fee structure and will annually adjust its fee structure to ensure that the fees continue to meet cost recovery targets. 12. The City will oppose efforts of the State and County governments to divert revenues from the City or to increase the unfunded service mandate of City taxpayers. 13. The City will work in partnership with its employees to ensure fair compensation and that costs related to pension and other benefits are appropriately allocated between employer and employees. 14. The City will vigorously defend itself and its taxpayers against frivolous lawsuits. 15. The City will seek additional intergovernmental funding and grants, with a priority on funding one -time capital projects. Grant- funded projects that require multi -year support will be reviewed by the Finance Committee. Revenue Summary Revenue Total Property Taxes Taxes Other than Property Licenses and Permits Intergovernmental Charges for Services Fines, Forfeitures & Penalties Use of Nloney and Property Other Revenue Total General Fund Revenue All Other Revenue Total City Revenue Less Internal Premiums 2009 -10 2009 -10 2010 -11 Change from Original Amended Budget Proposed Budget Amended $ 71,119,504 $ 71,723,296 $ 70,642,840 -1.51% 46,781,119 39,688,755 43,622,841 9.91% 2,947,790 2,530,022 2,663,975 5.29% 2,051,200 2,667,134 1,840,272 - 31.00% 14,380,989 14,401,635 13,878,895 -3.63% 3,645,000 3,627,000 3,651,000 0.66% 7,418,404 8,033,117 9,213,907 14.70% 595,600 1,152,662 433,050 - 62.43% 148, 939, 606 143, 823, 621 145, 946, 780 1.48% 63,447,854 74,581,904 69,568,422 (1) -6.72% 212,387,460 218,405,525 215,515,202 -1.32% (14,938,989) (14,938,989) (14,149,469) -5.28% Total City Revenue Net of Internal Charges $ 197,448,471 $ 203,466,536 $ 201,365,733 (1) -1.03% (1) Note: The Budget envisions bond proceeds of up to $130,000,000 not reflected in this schedule. Expenditure Summary 2009 -10 2009 -10 Change from 2010 -11 Change Original Revised Mid -Year Proposed from Function and Activities Budget Budget Budget Adj. Budget Revised .e3 ►1 =C7_\0191k►IRle111DIC3a1 General Government $ 16,281,291 $ 15,521,319 -4.67% $ 15,516,702 -0.03% Public Safety $ 78,617,750 $ 78,084,316 -0.68% $ 76,878,354 -1.54% Community Development $ 8,746,353 $ 8,819,164 0.83% $ 7,910,348 - 10.31% Public Works $ 31,026,388 $ 30,117,757 -2.93% $ 28,892,972 -4.07% Community Services $ 13,790,978 $ 13,905,106 0.83% $ 14,063,479 1.14% Debt Service $ - $ - n/a $ 780,000 n/a Total General Fund Operating $ 148,462,760 $ 146,447,662 -1.36% $ 144,041,855 -1.64% General Fund CIPs $ 8,636,613 $ 8,162,989 -5.48% $ 4,790,100 - 41.32% Total General Fund Budget $ 157,099,373 $ 154,610,651 -1.58% $148,831,955 -3.74% TOTAL CITY BUDGET Total Operating Budget $ 195,805,687 $ 196,486,304 -0.35% $187,741,905 -4.45% Total CIP Budget $ 60,784,459 $ 60,962,102 -0.29% $ 51,043,789 - 16.27% Total City Budget $ 256,590,146 $ 257,448,406 -0.33% $238,785,694 -7.25% Less Internal Charges $ (14,938,989) $ (14,938,989) 0.00% $ (14,149,469) -5.28% Total City Budget Net of Internal $ 241,651,157 $ 242,509,417 -0.36% $224,636,225 -7.37% More about Reductions in FY 2010 -11 • Draft budget proposes that some positions in PD transition from office to field. • No reductions in on- street protection. • ABLE under discussion with Costa Mesa. • Today's draft budget does not include (but will): • Restructuring of Development Services. • Results of current assessment of Fire - Lifeguards. • Impacts of current open negotiations — Police, PMA • Negotiations for Misc Groups (July 2010) CIP Summary CIP Category Facilities Streets and Drainage Traffic Parks, Harbors and Beaches Water Quality and Environmental Water Wastewater Miscellaneous FY 2011 Budget Major Project Examples: $1,080,000 Civic Center/ OASIS $21,729,249 Jamboree Bridge and Road Improvements $1,345,000 Traffic Signal Modernization $17,448,000 Rhine Channel Dredging / Marina Park/ Sunset Ridget Park $2,874,860 Big Canyon Wash Restoration $2,750,000 Penninsula Pt. Water Main Improvements $844,780 Sewer Pump Station Master Plan $2,971,900 Santa Ana Heights Utilities Undergrounding Total forAll Categories $51,043,789 Note: Recent contracts for Civic Center Design and Dirt Removal will be added for Final Budget Balancing the General Fund Budget NET BUDGET DEFICIT FY 2010 FY 2011 NET DEFICIT $ (8,000,000.00) $ (11,700,000.00) MID -YEAR BUDGET ADJUSTMENTS: Operational Budget Savings $ 2,992,579.00 $ 4,956,912.00 Contract Re- negotiations and Outsourcing $ 1,560,800.00 $ 209,743.00 CIP close -outs and deferrals $ 1,284,356.00 $ - Internal Service Fund Surplus $ 618,325.00 $ 618,325.00 Special Events Holiday (Employee Recognition) $ 30,000.00 $ 30,000.00 Subtotal $ 6,486,060.00 $ 5,814,980.00 EXPENDITURE INCREASES (ONE - TIME): Information Technology Consulting $ - $ (40,000.00) Class and Comp Study $ - $ (100,000.00) Subtotal $ - $ (140,000.00) REVENUE ENHANCEMENTS: Revenue Estimate Increase $ - $ 1,107,735.00 Revenue Contract Amendments / Fee Increases $ 30,000.00 $ 2,356,262.00 Subtotal $ 30,000.00 $ 3,463,997.00 PENDING CONTRACT NEGOTIATIONS or ADDITIONAL RESTRUCTURING: Transfer to Facilities Financing Plan Reserve to fund capital improvements $ 1,483,940.0 $ 2,561,023.00, NET BUDGET DEFICIT Conclusions • Consistent with Fiscal Sustainability Policy, remaining goals are to: • Reduce FY 2011's reserve use from $2.5 million to $0 (Policy #4). • Still have a ways to go — tight year -end close. • Labor negotiations are key — more cost - sharing of pensions ( #13). • More competitive contracting ( #9). • Effectively fund the Facilities Plan ( #5). • Use restructuring to improve service and cut costs ( #8).