Item CC/PA/RA-1

City Council Meeting: 02-23-99 Santa Monica, California

TO: Mayor and City Council

Chairperson and Redevelopment Agency Members

Chairperson and Parking Authority Members

FROM: City Staff

SUBJECT: Recommendation to Conduct FY1998-99 Mid-Year Budget Review and Adopt Associated Budget Changes

Introduction

This report provides a mid-year review of the FY 1998-99 budget, recommends budget and personnel changes, and reports on progress of work objectives.

Background

The mid-year budget review is an opportunity to assess the status of the adopted budget and make necessary mid-course corrections. In addition to reviewing projected revenues and expenditures after six months of operations, staff evaluates progress on collaborative and departmental objectives. Revisions to the adopted budget are recommended based on this analysis.

Discussion

Overview - A summary review of all funds is at Exhibit A. There will be no significant change in any projected fund balance as a result of the actions proposed in this report.

With respect to the General Fund, the Mid-Year Review report projects various FY 1998-99 changes to ongoing revenues and expenditures, and various one-time changes. Ongoing revenues are estimated to be about $0.7 million under budget, and about $0.3 million of expenditures financed from ongoing revenues are recommended. The resulting variance of $1.0 million is expected to be offset by year end by other expenditure savings. There should therefore be no impact on fund balance. The receipt of $1.5 million of one-time revenue will be delayed to next fiscal year. Additional expenditures of $4.95 million for housing programs are recommended which will be financed from one-time revenues in hand.

Details of previously approved budget actions and the mid-year analysis of City revenues are contained at Exhibit B.

As is the City's practice, an analysis will be prepared at the end of the fiscal year to identify changes in any of the fund balances as well as any final expenditure savings or budget revisions that are necessary.

Operating Budget Review - Recommended budget transactions are outlined in Exhibits C and D. Revenue adjustments will more accurately reflect grant and other revenues the City will receive during the fiscal year. In addition to these proposed technical adjustments, the following program related budget changes are also recommended.

Pedestrian and traffic safety has been a City Council priority for several years. The Police Department conducts more than 50 special crosswalk stings annually (resulting in 727 citations in 1998 alone) and crosswalk safety enhancements have been approved as part of the Pico Streetscape Project and are being developed for other key streets in the City. In conjunction with these enforcement and engineering components, staff was directed this year to develop a Pedestrian/Traffic Safety Public Education Campaign. To that end, public input on a draft campaign was gathered at crosswalk enhancement workshops and by questionnaire in October/November 1998. Based on public input, a campaign theme ("Slow Down, Santa Monica!") was determined, target audiences were identified, a set of strategies to be rolled out over the year was developed, and evaluation benchmarks established. The campaign kicked off in early December 1998 with several activities, most prominently theme banners displayed at strategic locations in the community. The Pedestrian/Traffic Safety Campaign is a collaborative project of the City Manager's Office, the Police Department and the Planning and Community Development Department.

With additional resources, the City can move forward quickly and in a more focused manner for maximum impact on pedestrian and driver behavior in Santa Monica. A mid-year appropriation of $39,615 for overtime will enable the Police Department to field five to six special enforcement details each month through June. An $80,000 allocation for the public education campaign recommended for the balance of this fiscal year would be used to: 1) retain a communications/marketing firm to assist with the elements of the "Slow Down, Santa Monica!" campaign, including theme and strategy refinement and design of materials; and 2) produce certain campaign elements that cannot be produced within current budget constraints. Staff intends to include funds to continue the "Slow Down, Santa Monica!" campaign in the proposed FY 1999-2000 budget.

The Planning and Community Development Department and the Main Street Merchants Association continue to seek non-structural parking solutions for that business district. To conclude their work, staff recommends "gap" funding for the previously authorized Parking Coordinator position. The position was engaged by the Merchant's Association through the Chamber of Commerce and its future funding will come from business assessments. Because the cost and efficacy of various alternative solutions have not yet been determined, no additional action is necessary at this time.

Departmental Program Performance Review - Staff reviewed all FY1998-99 performance measures and objectives. With the exception of the those listed at Exhibit E, collaborative and departmental work objectives and performance measures are on target.

Capital Improvement Projects (CIP) Review - A CIP Status report as of December 31, 1998 accompanies this staff report. It presents information on project implementation, financial status, management responsibility and changes in the scope or cost of project work authorized. All projects authorized in the FY 1998-99 revised budget are listed, as well as those projects from prior years which were not completed by June 30, 1998.

Personnel Actions - Included at Exhibit F is a resolution revising salaries for various positions. These salary changes result from an analysis of similar positions in comparable cities and internal equity factors. The cost of these changes will be absorbed in the existing budget.

Also at Exhibit F is a listing of new positions and reclassifications that have been reviewed and approved by the City Manager, Personnel Director and the Personnel Board and require approval by Council in order to be incorporated into the FY 1998-99 City budget. No appropriation is required to implement any of these changes.

Purchases Required to be Reported to Council Pursuant to Ordinance #1743 - City procurement procedures require competitive bidding, but also authorize the City Manager to secure necessary resources on an expedited basis if an emergency arises, or if it is in the interest of public health and safety. If the City Manager exercises this authority, it must be reported to the Council. Applicable purchases are listed at Exhibit G.

Recommendations

It is recommended that the City Council Redevelopment Agency and Parking Authority approve the resolutions at Exhibit H which recommend the revenue and expenditure budget changes noted in the attached exhibits.

Staff also recommends that the City Council adopt the changes in job classifications and approve the salary resolution contained in Exhibit F.

Prepared By:

Susan McCarthy, Assistant City Manager

Katie Lichtig, Assistant to the City Manager

Karen Bancroft, Director of Personnel

Mike Dennis, Director of Finance

Ralph Bursey, City Treasurer/Revenue Manager

David Carr, Assistant City Treasurer

Gigi Decavalles-Hughes, Principal Budget Analyst

Karen Feinberg, Principal Budget Analyst

Christopher Francisco, Senior Administrative Analyst - Budget

Amy Kohut, Senior Administrative Analyst - Budget

Joan Akins, Administrative Services Officer