Council
Meeting: June 15, 2004 Santa
Monica, California
TO: Mayor and City Council
Chairperson
and Housing Authority Members
Chairperson
and Redevelopment Agency Members
Chairperson
and Parking Authority Members
FROM: City
Staff
SUBJECT: Adoption
of the Fiscal Year 2004-05 Budget, Approval of Ordinances/Resolutions
Establishing and Increasing Various Fees, Approval of Resolutions Establishing
the City's Gann Appropriations Limit for FY2004-05, Approval in Concept Placing
a Measure on the Ballot in November 2004 to Increase the Transient Occupancy
Tax, and Approval Planning & Community Development Priorities.
INTRODUCTION
This
report presents information and requests actions necessary to adopt the City of
Santa Monica, Santa Monica Housing Authority, Santa Monica Redevelopment Agency
and Santa Monica Parking Authority budgets for Fiscal Year 2004-05. It also presents, for information only, a
plan for addressing the 2005-06 budgets.
Following
the City Council Budget Study Workshops on May 25 and 26, 2004, staff has
developed priority interdepartmental work objectives for FY2004-05 (Attachment
A), made adjustments to the budget expenditure and revenue figures presented in
the Proposed Budget for FY2004-05 and Budget Plan for FY2005-06 (Attachments B
and C) and identified changes to compensation and position classifications for
FY2004-05 (Attachments D1 and D2).
Presented
for City Council review and approval are changes to existing fees and rates and
the establishment of new fees and rates.
This report identifies the increases and presents the necessary
ordinances and resolutions required to implement them (Attachments E1 – E7). Recommended
Council actions include approval in concept for A Transient Occupancy Tax (TOT)
increase and if approved, staff will present for Council approval in July a
resolution authorizing placing the tax increase on the ballot.
BACKGROUND
The
proposed budget and final changes identified in this staff report present a
constrained but optimistic budget for FY2004-05. Efforts to close the revenue and expenditure gaps in prior years
have helped to minimize the actions required to bring next year’s budget into
balance. The FY2004-05 proposed budget
continues to reflect a fiscally conservative, yet improving revenue forecast,
plus additional trimming of ongoing operating expenses.
Ongoing
General Fund revenues from Property Tax, Sales Tax, and Business License Tax continue
to recover and TOT revenue has reached pre-9/11 levels. New or revised fees are proposed in a
variety of programs to increase revenues by $1.4 M. An
increase in the TOT rate is also proposed, requiring voter approval in November
2004, that would raise $1.6 M in FY2004-05 and $3.5 M in FY2005-06.
The
primary unknown variable in the revenue outlook is what actions that the State
of California may ultimately take to balance their budget using local revenues.
On the
expenditure side, staffing efficiencies are proposed without layoffs to City
employees and a strategic hiring freeze to control expenses continues to be in
place. Major budget savings were
achieved by application of one-time monies to one-time capital projects, which
reduced ongoing capital projects, over the Capital Improvement Plan for
FY2004-05 presented to Council last year.
The
Proposed Budget for FY2004-05 provides enhancements for the operation of
Virginia Avenue Park and the Skate Park, an increase in parking operations cost
and an improved community recreation class program. The budget also provides an enhancement to the Santa
Monica/Malibu Unified School District Facility Use Agreement, bringing ongoing
payments to the school district to $6.0 M.
The FY2005-06 Budget Plan provides for full year funding for Virginia
Avenue Park and the opening of the new Main Library.
The
Proposed Budget continues the City’s tradition of careful financial management
and maintains the City’s financial flexibility. With this resource base, City staff can continue to provide
service to our residents, business community and visitors. If recovery continues, it may be possible to
strategically restore program elements the absence of which would otherwise,
over time, become apparent to the community.
RECOMMENDED
ACTIONS
1.
Detail of Community Priorities
Interdepartmental work objectives that address Council / Community priorities appear at Attachment A. They will appear in the Adopted Budget and guide the City’s work program upon Council approval.
2.
Revisions to the Proposed Budget
Attachment B presents revisions to revenues
and expenditures for all funds that have been made subsequent to release of the
Proposed Budget for FY2004-05. The
impact of the changes to the General Fund balance is as follows:
GENERAL FUND
|
|
Initial Proposed FY
2004-05 Budget |
|
Recommended Changes |
|
Final Proposed FY 2004-05
Budget |
|||
|
7/1/04 Estimated Actual
Fund Balance |
$ |
19,500,000 |
|
$ |
0 |
|
$ |
19,500,000 |
|
Plus Revenues |
|
192,451,276 |
|
|
(10,700) |
|
|
192,440,576 |
|
Less Expenditures |
|
(180,889,776) |
|
|
(5,169,595) |
1 |
|
(186,059,371) |
|
Balance Sheet Changes |
|
(12,680,097) |
|
|
5,000,000 |
1 |
|
(7,680,097) |
|
Use of One-Time Funds |
|
0 |
|
|
0 |
|
|
0 |
|
6/30/05 Budgeted Fund
Balance |
$ |
18,381,403 |
|
$ |
(180,295) |
|
$ |
18,201,108 |
1 A payment from one-time funds to the Worker Compensation Fund reclassified from a Balance Sheet transaction to an operating expenditure.
The increase in expenditures is largely due to 1) an accounting change to show the General Fund payment to the Workers’ Compensation Fund as an operating expenditure instead of a balance sheet transfer, 2) an appropriation for MTBE remediation at the Charnock well field pursuant to the settlement agreement with the oil companies, and 3) an appropriation for the Big Blue Bus Campus Expansion Project from grant funds available. Other expenditure modifications either more accurately distribute budget authority to the appropriate cost centers through technical adjustments or better reflect priorities and needs expressed by the Council and community members during the budget process.
With the changes identified, the anticipated General Fund balance at June 30, 2005, is estimated at $18.20 M. The fund balance requirement to meet the 10% set-aside for emergencies is $18.11 M. This provides $90,000 that Council could allocate now to unfunded needs or set-aside until the State budget is adopted. If Council chooses to set the funds aside and they are ultimately not required to back-fill for State revenues the funds would be available to meet unfunded needs at Year-End or at the Mid-Term Review.
Administrative changes to the FY2005-06 Budget Plan are presented in Attachment C. They reflect the second year impacts of changes made to the FY2004-05 Proposed Budget, additional technical budget adjustments and changes to better reflect the priorities and needs expressed by Council and the community during the budget process as they impact FY2005-06.
3.
Personnel Changes
As part of the budget process, classification and compensation change requests were reviewed by the Human Resources Department in accordance with existing Administrative Instructions. Recommended classification and salary changes will be incorporated into the FY2004-05 Budget upon Council adoption of the resolution and approval of the adjustments at Attachments D1 and D2.
4.
Adjusting and Establishing Various Rates and Fees
As part of the FY2004-05 budget balancing
strategy fee increases and new fees are proposed. Implementing resolutions and ordinances are shown in Attachments
E1 through E7. The new and revised fees
are discussed below.
Community
and Cultural Services ($136,395)
The Department
of Community and Cultural Services offers a wide variety of programs and
activities for seniors, adults, young children, youth and teens. City staff has analyzed its current fee
structure and has identified several instances where the City’s program fees
are less than those charged by other cities for comparable programs or where it
is reasonable to establish fees to partially offset operating costs of a
program or facility.
Staff is proposing increases in fees for the
Memorial Park Gym, community classes, Miles Playhouse, field permits, the
Community Aquatics program and youth camps.
Also proposed are new fees for the Skate Park, Memorial Park Gym, field
permits and classes. New fees will help
offset the cost of operating these programs.
The City’s General Fund will continue to significantly subsidize these
programs, including making financial assistance available to eligible
participants.
Taxi Decal Fee ($37,800)
All taxis operating in Santa Monica are required to possess and display a current City of Santa Monica Taxi Decal signifying that the taxi has been inspected by the City and meets all safety and operational requirements. The decal issuance process requires administrative time by business license staff to prepare necessary inspection documents, verify insurance coverage, schedule appointments for Police Department inspection of vehicles, and prepare the decal. A Police Officer inspects the taxi, completes the documents, and issues the decal. These costs are not recovered from in the current Police Permit Fee. A proposed new fee of $72.00 per decal will allow the City to fully recover costs associated with this function. At its meeting on June 8, 2004, the City Council introduced for first reading an ordinance authorizing creation of the fee. Second reading and final adoption of the ordinance is scheduled for June 15, 2004. A resolution setting the fee rate is included as Attachment E4 of this staff report.
Fire Department Fees ($875,517)
The Fire Department will increase revenue by an estimated $875,517 in FY 2004-05 by receipt of medical restock funds through contractual agreement and establishment of an Advanced Life Support Assessment Fee (ALSAF) and a Code-3 Response Fee for services provided by paramedics for response, assessment, treatment and/or transportation of patients.
The private ambulance transport service operating in the City invoices and collects charges associated with ambulance transport. A portion of the fees collected are passed through to the City. The City’s new contract with the ambulance transport service provides for 1) medical restock funds that offset a greater share of Fire Department emergency medical service delivery costs than in the past and 2) invoicing services to collect and convey to the City the ALSAF and Code-3 Response Fee. The ALSAF and Code-3 Response Fees are set according to the most current Los Angeles County General Public and Ambulance Rates Schedule. The fees will be adjusted when modifications occur to the County Schedule.
The Proposed Budget also includes establishment of a delinquent penalty for late payments for Fire Department inspections of non-high rise commercial buildings and multifamily residences.
Traffic Database Fee ($60,000)
The proposed new fee will be charged to traffic consultants for use of the City’s traffic database for Environmental Impact Reports. The fee would recover City costs of updating and maintaining the database. Estimated annual revenue from the new fee is $60,000.
5.
Budget Resolutions
Approving the resolutions at Attachment F1 - F4, will: a) adopt the FY2004-05 Budget revenue at the account level, operating expenditure appropriations at the major account group level within a fund for each department, and capital improvements at the program category level within a fund; and b) reappropriate funds for continuing capital projects and the Disaster Relief Fund into FY2004-05 from FY2003-04.
6.
GANN Appropriations Limit
Based upon Article XIIIB Appropriations Limit
Uniform Guidelines published by the League of California Cities, the City's Gann
Appropriations Limit of $475,656,176 for FY2004-05 has been computed and made
available to the public fifteen days prior to this meeting. The FY2004-05 limit has been computed based
on the following allowable increase factors applied to the FY2003-04 Gann
Limit: the annual percentage change in the City’s non-residential assessed
valuation times the annual percentage population change for the City. The
assessed valuation change factor is based on data provided by the Los Angeles
County Assessor, and the City population change factor was provided by the
State Department of Finance. Staff
recommends that Council approve the FY2004-05 limit based on these
factors. The calculation of the City's
FY2004-05 limit using these factors is detailed at Attachment G. An appropriate resolution to establish the
City's FY2004-05 Gann Appropriations Limit at $475,656,176 is at Attachment H.
A comparison of the City's FY2004-05 Gann Appropriations Limit and FY2004-05 appropriations and tax proceeds subject to limitation as set forth in the City's Proposed FY2004-05 Budget is as follows:
Proposed Gann-related
Spending for FY2004-05
|
|
Total |
|
Gann Limit Appropriations Subject to Limitation |
$475,656,176 112,386,905 |
|
Net Under/(Over) |
$363,269,271 |
The above indicates the
FY2004-05 appropriations subject to limitation are less than the City’s Gann
Appropriations Limit. In terms of
receipt of tax proceeds, the City is $301,757,651 under the Gann Limit.
7.
Planning and Community Development Priorities
The Council reviewed Planning and Community Development (PCD) priorities at the May 26, 2004 budget study session. The only change staff recommends to the priorities is the addition of the Transportation Right of Way Rezoning study, which had originally been incorporated into the General Plan Land Use and Zoning Ordinance Update. At Councils’ request, this study will precede the comprehensive zoning and land use update. The study will cost approximately $75,000, which is currently not budgeted but may be funded with department year-end savings, and should take approximately six months to complete. (See Information Item on Responses to Budget Study Session Questions). Attachment I includes the revised PCD Priorities for FY 2004-05.
RECOMMENDATIONS
It is
recommended that the City Council:
1. Approve the Community Priorities as shown in Attachment A.
2. Approve the Resolution of the City of Santa Monica Establishing New Classifications and Adopting Salary Rates for various listed positions at Attachment D1 and approve the Position and Classification Changes at Attachment D2;
3. Approve the Resolution of City Council Establishing User Fees for Social Service, Recreation and Community ty Programs, Classes and Services of the Department of Community and Cultural Services at Attachment E1;
4.
Approve the Resolution of City Council Setting
Amount of Fees to Be Charged for Use of Santa Monica Swim Center and Miles
Memorial Playhouse Operated by the Community and Cultural Services
Department at Attachment E3;
5.
Approve the Resolution of City Council Setting
Taxicab Decal Fee at Attachment E4;
6.
Approve the Resolution of City Council Setting
Fees for Emergency Medical Services at Attachment E5;
7.
Approve the Resolution Amending Fee Provisions Relating to Annual
Inspection of Multi-Family Residences and Non-High Rise Commercial Buildings by
the Fire Department at Attachment E6;
8.
Approve the Resolution of City Council Setting Fees for use of Traffic
Database E7;
9.
Direct staff to prepare and present to Council for approval a Resolution
to place an increase in the Transient Occupancy Tax from 12% to 14% on the
November 2004 election ballot for voter approval.
10.
Approve Resolution establishing the City’s Gann Appropriations
Limit for FY2004-05 at $475,656,176
based on the allowable increase factors of the annual percentage change in the
City’s non-residential assessed valuation and the annual percentage population
change of the City at Attachments G and H;
and
11.
Approve the PCD Priorities as
shown in Attachment I.
It is recommended that City Council, Housing
Authority, Redevelopment Agency and Parking Authority:
1.
Approve the Resolution of the City Council of the City of Santa Monica
Approving its Budget for Fiscal Year 2004-05 at Attachment F1, as amended
by Attachment B to this staff report;
2.
Approve the Resolution of the Housing Authority of the City of
Santa Monica Approving its Budget for Fiscal Year 2004-05 at Attachment F2,
as amended by Attachment B to this report;
3.
Approve the Resolution of the Redevelopment Agency of the City
of Santa Monica Approving its Budget for Fiscal Year 2004-05 at Attachment
F3, as amended by Attachment B to this report; and
4.
Approve the Resolution of the Parking Authority of the City of
Santa Monica Approving its Budget for Fiscal Year 2004-05 at Attachment F4,
as amended by Attachment B to this report.
Attachments: A - Community
Priorities
B. - Revisions to the Proposed Fy2004-05 Revenue
Estimates and Budget Expenditure Appropriations
C - Revisions to the FY2005-06 Budget
Plan Revenue and Expenditure Estimates
D1 - Resolution
Revising Salaries for Various Positions
D2 - Listing of Position and Classification Changes
E1 - Resolution
of City Council Establishing User Fees for Social Service, Recreation and
Community Programs, Classes and
Services of the Department of Community and Cultural Services
E2 - Resolution of
City Council Setting Amount of Fees to Be Charged for Use of Community and
Recreational Facilities Operated by the Community and Cultural Services
Department for Rental of Civic Auditorium Parking Spaces, and for Use of
Barnard Way Beach Parking Lot
E3 - Resolution of City Council Setting Amount of Fees
to be Charged for use of Santa Monica Swim Center and Miles Memorial Playhouse
Operated by the Community and Cultural Services Department
E4 - Resolution
of City Council Setting Taxicab Decal Fee
E5 - Resolution
of City Council Setting Fees for Emergency Medical Services Provided by City
Fire Department Paramedics
E6 - Resolution
of City Council Amending Fee Provisions Relating to Annual Inspection of
Multi-Family Residences and Non-High Rise Commercial Buildings by the Fire
Department
E7 Resolution of City Council Setting
Fees for Use of Traffic Database
F1 - Resolution
of City Council Approving Its Budget for Fiscal Year 2004-05
F3 - Resolution of
the Redevelopment Agency Approving Its Budget for Fiscal Year 2004-05
F4 -
Resolution
of the Parking Authority Approving Its Budget for Fiscal Year 2004-05
G -
City of
Santa Monica Calculation of FY2004-05 Gann Appropriations Limit
H -
Resolution
of the City Council of the City of Santa Monica Establishing the Gann
Appropriations Limit for the Fiscal Year 2004-05
I - Planning and
Community Development Priorities
Prepared
by: Susan E. McCarthy, City Manager
Gordon Anderson,
Assistant City Manager
Kate Vernez,
Assistant to the City Manager
Mona
Miyasato, Assistant to the City Manager
Steve
Stark, Director of Finance
Janet Shelton, Budget
Manager
David Carr, Assistant
City Treasurer/Revenue Manager
Kathy Chang,
Principal Budget Analyst
Annette Morales,
Senior Budget Analyst
Prema Krishnan,
Senior Budget Analyst
Karen
Bancroft, Director of Human Resources
Barbara
Stinchfield, Director of Community and Cultural Services
Suzanne
Frick, Director of Planning and Community Development