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Home My WebLink About20 - FY2012-13 Proposed Budget• 4 ' �l� �� I`P %knit 4� �� 1'' I!� � � ,t��' �-. '_ Agenda Item No. 20 May 22, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 - 644 -3002, dkiff @newportbeachca.gov PREPARED BY: Tracy McCraner, Finance Director APPROVED: TITLE: Second Meeting of the FY 2012 -13 Proposed Budget ABSTRACT: The City Council is required by the City's Charter to adopt an annual budget each year prior to June 30th. This will be the second public Council meeting to discuss the FY 2012 -13 Budget and receive comments from Council and the public. RECOMMENDATION: Receive and file report and presentation. Provide input as desired. FUNDING REQUIREMENTS: The total FY 2012 -13 proposed balanced budget is $241.392.568, amount subject to change with Council adoption on June 12, 2012. DISCUSSION: Background On Tuesday May 8, 2012 the Assistant City Manager and Finance Director made the first of three presentations to Council on the City Manager's Proposed FY 2012 -13 Budget. This budget sets key priorities based on council goals and a commitment by the City Manager to focus resources on delivery of high quality services and programs in three fundamental areas. The management team spent considerable time synthesizing the services and attributes of the City that are foundational to citizen expectations and pride in the City of Newport Beach. These areas of focus are: o Developing and maintaining a high quality physical environment — "Shining City by the Bay" Second Meeting of the FY 2012 -13 Proposed Budget May 22, 2012 Page 2 This encompasses the support and preservation of the natural environment as well as a focus on infrastructure development and maintenance such as community centers, parkways and medians, well- maintained roads and beaches, and more. We believe that Newport Beach has a different "look" from other communities as you enter it, and we want to keep that. o Enhancing the communities' sense of enjoyment and safety Our investment in our parks and libraries and our support of youth, adult and senior activities combine with a strong public safety presence to make us uniquely Newport Beach. o Providing rewarding and meaningful engagement within the community and with the many functions of city government We acknowledge and celebrate that our citizens are actively engaged with city government and our focus supports the activities of citizen boards, commissions and committees. o A commitment to being an accountable, responsive city government We should be about superior customer service, fiscal sustainability, accountability and transparency. We should be the standard of excellence in city government. This budget was prepared to focus on programs and activities that support the values stated above. It also supports a continued focus on the transformation of the Newport Beach city government to a more accountable and performance -based organization. As such, the executive team is not only improving what we are best at, but, also looking for what we should "not" be doing. We are currently projecting that we will close FY 2011 -12 with an increase to fund balance reserves of approximately $4.4 million and the City Manager's Proposed FY 2012 -13 current year budget estimates that revenues will exceed expenditures by approximately $1.7 million thereby following our fiscal sustainability policy of not using General Fund reserves to balance the budget. The City Manager is proposing that Council consider allocating these resources to the following key initiatives: 1. Technology: We are moving forward with our Information Technology Strategic Plan including, but not limited to an updated Finance and Human Resources system; a new CAD /RMS public safety system; and enhanced Planning /Permitting software for our community development and public works customers. Second Meeting of the FY 2012 -13 Proposed Budget May 22, 2012 Page 3 2. Workforce Management: We are reshaping the workforce with an improved and streamlined personnel classification system; a modernized on -line employee evaluation system; and continued review of opportunities to outsource or share public services when it can be proven to provide better customer service with a reduced cost. 3. Investing in our facilities and public programs: We have increased our funding for the Facilities Financing Plan; General Funded CIP projects (streets, roads, lights); and for our community programs /services (recreation, senior services and library.) At tonight's second public meeting, the City Manager and Finance Director will provide more detail into the operating department budgets (including staffing changes), review the total CIP budget again, and summarize change requests as recommended by the Council and City Manager. The third meeting is scheduled for Tuesday, June 12, 2012, and is the planned adoption date for the Proposed FY 2012 -13 Budget. Assignments of Fund Balance for Council Priorities Council Policy F -2 authorizes the City Manager to assign fund balance to be used for specific purposes that are not already contracted or encumbered. As mentioned earlier, the City is projected to end FY 2011 -12 with almost $4.4 million in General Fund operational savings. This Proposed FY 2012 -13 Budget includes a recommendation by the City Manager to assign this FY 2011 -12 surplus, then allocates these resources to funding our IT infrastructure and increasing our General Fund budget for CIP (streets, roads). Council approval is required before any fund balance assignment can be appropriated and expended during the year. �►1lll:l�7►.lil11�►.� rd1 �7 �!I t�!iTl Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). The Public Notice for this item was published in the Daily Pilot on June 4, 2011. Prepared by: Tracy Mc r er Finance Dtre tor Second Meeting of the FY 2012 -13 Proposed Budget May 22, 2012 Page 4 Submitted by: _ A DcWe Kiff City Manager Budget Overview — 2nd Session FY 2012 -13 Proposed Budget Submitted by City Manager, Dave Kiff Finance Director, Tracy McCraner May 22, 2012 Core Values Physical environment Public Safety Civic engagement Accountable & responsive a OW r; R M �• 7 W-- hat we'll ■ Key Assumptions cover Departmental budget overview ■ Capital Improvement Program ■ Proposed budget adjustments ■ Citizen Advisory Panels (CAPs) n Key Assumptions ■Maintain FY 11 -12 budgetary levels ■ Built -in contractual obligations ■ CM approve any change requests ■ Reprogram + $1 M: IT operations /support ■ Increase funding $7M: IT, Facilities & CIP City Council / City Manager / City Clerk ■ Overall Budget ■ Maintains FY 11 -12 levels except: • NBTV (CM) • IT internal service fund (CM -IT) • Funding ERP financial system (CM -IT) • Election costs (CC) • Citywide document imaging (CM -IT) city Attorney ■ Overall Budget ■ Lower than FY 2011 -12 level ■ Personnel Changes ■ FTE's from 9.8 to 8.1 ■ Program Changes & Enhancements ■ Business process improvements • Centralized contract preparation • Handbook for Boards and Commissions • Development of Administrative Policies Human Resources ■ Overall Budget Maintains FY 11 -12 levels ■ Personnel Changes • Analyst to Senior Analyst (0 FTE impact) • One position from .75 FTE to 1.0 ■ Program Changes & Enhancements • Public Safety recruitment & selection services • Payroll business process • Classification & compensation study • Employee performance & evaluation system Finance ■ Overall budget ■ Maintains FY 11 -12 levels ■ Personnel Changes • Adds Business & Performance Analyst • Eliminates Budget Fellow ■ Program Changes & Enhancements • Business license program • ERP implementation • MOU changes • Evaluation of performance management • CPS contract amendment cuts $500k Police ■ Overall Budget ■ Maintains FY 11 -12 levels ■ Personnel Changes • Eliminate 1 Police Captain • Add 1 Crime Prevention Specialist ■ Program Changes & Enhancements • Emergency response time • Crime at historic lows • ABLE dissolution • Outsourcing opportunities t I kto dire ■ Overall Budget ■ Maintains FY 11 -12 levels • Personnel Changes • Eliminate 0.6 FTE Lifeguard Officer • Add 1 Department Assistant • Program Changes & Enhancements ® Life Safety Services ■ Training merged with Operations W7. A e• ^ +.' -�'. �•,, �". Community Development ■ Overall Budget ■ $500K lower than FY 11 -12 levels ■ Personnel Changes • Eliminates 1 Sr. Building Inspector, 1 Assistant Planner, 1 Planning Tech., 1 Admin. Assistant • Adds 1 Real Property Administrator ■ Program Changes & Enhancements ■ Planning, Building & Code Enforcement ■ Improved business processes L'xu. Municipal Operations ■ Overall Budget • Utilities budget $1.3M lower than FY 11 -12 levels • General Services maintains FY11 -12 levels • Personnel Changes ■ Eliminates 1 Equipment Mechanic II, 1 Grounds Worker I, 1 Utilities Specialist, 1 Safety Officer, and 1 Utilities Operations Manager • Program Changes & Enhancements ■ Increase tree reforestation • Consolidate citywide facility maintenance • Analyzing solid waste collection & service alternatives 12 Library & Cultural arts ■ Overall Budget ■ Maintains FY 11 -12 levels ■ Personnel Changes • Eliminate 1.0 Library Assistant • Add Two .48 FTE's Library Assistants ■ Program Changes & Enhancements • Realign service points • Maintain a full collection at each library • Use the latest technology • Utilize social media L- Recreation &Senior Services ■ Overall Budget ■ Maintains FY 11 -12 levels ■ Personnel Changes ■ Shared Analyst (.40 FTE) ■ Department Assistant to Recreation Coordinator -NCCC ■ Two 36 -hour Assistant Recreation Coordinators to Full Time Coordinators — contract classes ■ Program Changes & Enhancements • OASIS Senior Center • Traveling tidepool program • Adult basketball league coordination - contracted out 14 Public Works • Overall Budget ■ Maintains FY 11 -12 levels • Personnel Changes ■ Eliminate 1 Public Works Specialist • Add 1 Administrative Analyst • Add 1 Facilities Manager (could be contract position) P Capital Improvement by Category Wastewater $584 Miscellaneous 1 % $1,171 2% Water Quality & I Environmental $2,127 4% Water $8,965 17% Dollars in Thousands Parks, Harbors, 8 Beaches $17,282 34% `Facilities $3,340 / 7% Streets & Drainage $1,682 /o Capital improvement by Fund Water Enterprise $6,753 35% Major Facilities Master Plan $1,850 9% h Dollars in Thousands Wastewater Enterprise $193 1% CDBG $100 1% General Fund � $3,600 18% Measure M $2,550 13% Building Excise Tax $405 2% Gas Tax $2,701 14% Tide and )merged Lands $1,035 5% Contributions $360 2% City Council & City Manager Recommenda ions for Check! st Project GF Cost Cumulative 1) Reduce City Hall Interim Site Imp. to $100k - $400,000 $39200,000 2) Postpone Lifeguard HQ Rehabilitation 1 year 3) Streetlight Replacement Program 4) Purchase SCE 20A Credits (worth $2,157,903) 5) Finish Local Coastal Plan 6) Newport Coast Drive Monument Signs 7) Bristol Street S. Median Landscaping (grant match) 8) Balboa Boulevard Landscaping - $1,400,000 $1,800,000 $150,000 $1,950,000 (CAP) $974,000 $2,924,000 $150,000 $3,074,000 $50,000 $3,124,000 (CAP) $125,000 $3,249,000 (CAP) $265,000 $3514,000 Conclusion ■ Proposed budget is b a l a n c e d • Protects existing levels of services • Restructuring opportunities • Provides additional funding • Maintains existing reserves • Contracting efficiencies • Shifting pension costs to employees Looking Ahead to FY 2013 -14 ■ More to be done! • Regional service sharing opportunities • Analyze service delivery • Process improvements • Upgrade technology — getting smarter, then smaller City of Newport Beach FY 2012 -13 Proposed Budget City's budget documents can be accessed at: www.newportbeachca.gov/budget 21