City Council Meeting: February 12,
2008
Agenda Item: 8-A
To: Mayor and City Council
From:
Subject: Mid-Year
2007-08 Budget
Recommended
Action
Staff recommends that
City Council:
1) appropriate Fiscal Year 2007-08 budget changes and adjust
revenue budgets as detailed in Exhibit A2;
2) adopt a Resolution establishing classification and salary
rates for various positions detailed in Exhibit B1;
3) approve the position and classification changes detailed in
Exhibit B2; and
4) hold a public hearing and approve a second Amendment to the
FY 2007-08 Community Development Block Grant (CDBG) and Home Investment
Partnership Act (HOME) program One-Year Action Plan detailed in Exhibit C.
Executive
Summary
This report provides a status
update of the FY2007-08 budget and proposes revisions to the revenue and
expenditure budget based on departmental reviews of their budgets at the
mid-point of the year. The recommended
budget actions increase city-wide revenues by $2.7 million including a net
General Fund increase of $0.4 million, an increase in Big Blue Bus funding from
the Los Angeles County Metropolitan Transportation Authority of $1.9 million
and all other fund adjustments of $0.4 million.
Appropriation requests at
mid-year total $6.8 million city-wide with $2.0 million funded from funds
previously set-aside for employee medical trust/insurance premium contributions
and a contribution to the Education Foundation.
Increase to the General Fund budget is $2.2 million which includes $1.1
million for employee medical contributions.
Non-General Fund appropriations total $4.6 million with $1.2 million for
police vehicle replacements, $0.26 million for alternative fuel vehicles from
South Coast Air Quality Management District funds, $0.9 million for employee
medical trust/insurance premium contributions, $0.7 million for Big Blue Bus
contributions to the Self Insurance program, $0.5 million for commercial refuse
containers, $0.25 million for litigation expenditures in the Airport Fund, $0.37
million from Redevelopment Funds for a Commercial Corridor study and $0.4
million for miscellaneous grant projects.
All other appropriations in various funds total less than $0.1 million.
After all staff recommended
Mid-Year actions, there remains
$5.8 million in available resources that can be
appropriated for one-time projects or carried over to next fiscal year for
consideration during the adoption of the FY2008-09 budget. In these uncertain economic times, staff
recommends that Council not appropriate the funds at this time, but carry them
over and consider use as part of the FY2008-09 budget.
Discussion
Budget Review
At the budget mid-point, staff identifies any one-time funds
available for appropriation based on audited results from the prior year,
reviews revenue receipts to date, recommends revenue budget changes and
proposes adjustments in the budget expenditure projections, as necessary.
General Fund Status
Update
Following the closing of the fiscal year and audit of financial
records, the actual ending fund balance was $9.4 million higher than
anticipated. Adjustments through
December 2007 decreased the available fund balance to $7.2 million. The proposed mid-year actions will reduce
the available fund balance by another $1.5 million, leaving a fund balance of
$5.8 million.
Current FY2007-08 General
Fund revenues are up over the Adopted Budget by $0.4 million.
Decreases in six major revenue accounts were more than offset by
increases in eleven other accounts. Details
of these changes are shown on page 5. Mid-Year
Budget appropriations recommended at this time include $2.2 million,
with $1.1 million from funds previously set aside for employee benefit and
Education Foundation purposes. If these
changes are adopted, available General Fund balance will be $5.8 million.
Council has several options for allocating the additional $5.8 million
in available funds, including:
·
Leave the full $5.8 million in fund balance and decide how to
appropriate these funds in context with other priorities as part of the
FY2008-09 budget adoption in June.
·
Designate the funds for one-time CIP projects. These funds could be applied to unfunded or
under-funded capital projects, to accelerate projects scheduled in future years
or fund new priority projects. However,
this process is also part of the FY2008-09 budget development.
·
Use the one time funds to enhance reserve levels. Staff will recommend changes to reserves as
part of the upcoming FY2008-09 budget process.
·
Appropriate the funds for other Council priorities.
Given the continuing pessimistic economic outlook for the
nation, and the City’s most recent five year forecast showing a potential
structural deficit beginning in FY2009-10, staff recommends that any Council
appropriation of available funds be for one-time expenditures.
General Fund Mid-Year Recommendations
Exhibit A2 details proposed budget actions for FY2007-08 to adjust
accounts to reflect the status at the mid point in the fiscal year. Below are summaries of proposed revenue,
expenditure and balance sheet actions.
Revenue Adjustments – General Fund
At Mid-Year, staff reviewed current year revenues and
identified budget revisions based on actual revenue receipts to date. This year, approximately $0.4 in additional
General Fund revenue is available.
Revenue accounts recommended for adjustment are identified below:
Expenditure
Adjustments – General Fund
A review of department budget through the first half of the
fiscal year has identified areas where additional appropriations are required
totaling $2.2 million. The proposed
appropriations are identified below:
Other Funds
Revenue and expenditures changes for other funds are summarized in
Exhibit A1 and detailed in Exhibit A2.
Other Funds - Revenues
Other fund revenue adjustments include a reduction in
Miscellaneous Grant Fund revenues of $407,227 to reflect timing changes in
reimbursement of grant expenditures offset by some additional grant awards;
increase in Water Fund revenues of $300,000 based on review of year-to-date
actual receipts, increase of $500,000 in the Wastewater Fund to reflect
reimbursement from the City of Los Angeles for the Moss Avenue Pumping Station
capital project, increase in Big Blue Bus Prop A Discretionary funding of
$1,948,814 to reflect final funding actions of the LACMTA and a $2,000 increase
to the Information Technology internal service fund for contribution toward the
purchase of additional computers.
Other Funds
Expenditures
Proposed appropriations at Mid-Year in all non-General Fund
funds total $4.6 million. Included in the request is $1,163,694
appropriation from the fund balance of the Vehicle Maintenance Fund for the
purchase of new police vehicles, $700,000 from the Big Blue Bus Fund for bus
self-insurance funding, $250,000 in the Airport Fund for anticipated litigation
expense funded from the General Fund, and $366,500 in Miscellaneous Grants
appropriations for grants received for the 100th Anniversary Pier
celebration, a “pilot collection program” and allocation of Prop A local return
funds. The Earthquake Recovery Fund
requests appropriation of $400,000 to develop a Commercial Corridor Strategy
following identification through the Land Use and Circulation Element process
of priorities. The Solid Waste
Management Fund requests appropriation of $500,000 for purchase of refuse
containers for commercial operations, $56,273 is appropriated in the Special
Revenue Source Fund reflecting a funding change for the Cloverfield Soundwall
capital project and $264,000 is appropriated from the AQMD Fund for purchase of
alternative fuel vehicles. Various funds
(Beach, Water, Solid Waste, Pier, Wastewater, Civic Auditorium, Airport,
Cemetery, Big Blue Bus, Vehicle Management, and Worker Compensation)
appropriate the one-time contribution to the Miscellaneous Employees Medical
Trust.
Personnel Actions
Exhibit B1 is a resolution establishing new position
classification and adopting salary rates for various classifications. The Mid-Year recommendation adds 1.0 FTE
city-wide in the Human Resources Department.
All position changes such as reclassification, compensation adjustments
or addition/deletion increase the FY2007-08 budget by $101,987. The ongoing cost into FY2008-09 of these
changes is calculated at $139,092.
FY2007-08 Amended One-Year Action Plan for Community
Development Block Grant (CDBG) and HOME Funds
On June 12, 2007, Council held a public hearing and approved the FY2007-08 Amended One-Year Action Plan for federal CDBG and HOME funds. The One-Year Action Plan is designed to meet the community needs identified in the Consolidated Plan (FY2005-10) adopted by City Council and submitted to the Department of Housing and Urban Development in June 2005 and program these federal entitlement funds. The Amendment to the Plan adopted in June is necessary in order to reallocate CDBG entitlement funds to new projects and to amend funding for existing projects. The Amendment is shown as Exhibit C of this report.
Financial Impacts &
Budget Actions
The budget impact of adoption of the mid-year changes detailed in
Exhibit A2 is summarized in Exhibit A1 of this report.
Prepared by:
Janet Shelton,
Budget Manager
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Approved: |
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Forwarded to Council: |
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Director
of Finance |
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P. City Manager |
Attachments:
Exhibit A1: Summary of FY2007-08 Revenue and Expenditure Budget
Changes
Exhibit A2: Proposed FY2007-08 Mid-Year Revenue, Expenditure
and Balance Sheet Changes
Exhibit B1: Resolution Establishing New
Classification and Adopting Salary Rates for Certain Positions
Exhibit B2: Position and Classification
Changes
Exhibit C: Second Amendment to the FY2007-08
One Year Action Plan