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Home My WebLink About17 - Resolution Adopting FY 2013-14 Budgeto �EWPORra CITY OF NEWPORT REACH City Council Staff Report Agenda Item No. 17 June 11, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 - 644 -3001, dkiff @newportbeachca.gov PREPARED BY: Dan Matusiewicz, Finance Director APPROVED: (✓1 TITLE: Resolution 2013 -53: Fiscal Year 2013 -14 Budget Adoption ABSTRACT: The City's Charter requires the City Council to adopt an annual budget by resolution each year prior to June 301h. RECOMMENDATION: 1. Hold the public hearing on the City Manager's Proposed Budget for Fiscal Year 2013 -14. After reviewing the staff report and taking public input, discuss and accept Council member recommendations for additions, deletions, or modifications to the budget checklist. 2. Conduct a straw vote on the budget checklist, including those added to the City Manager's Proposed Fiscal Year 2013 -14 Budget by Council members during the public hearing. Based on the straw vote, items approved will be included in the City's Fiscal Year 2013 -14 Approved Budget. 3. Approve Resolution 2013 -53 adopting the City Manager's Proposed Fiscal Year 2013 -14 Budget, as amended by Items 1 -2 above. FUNDING REQUIREMENTS: The City Council, upon adoption of the Budget Checklist as indicated on Attachment A and the originally proposed FY 2013 -14 Budget Resolution as indicated on Attachment B, will be authorizing the total appropriations for Fiscal Year 2013 -14. Projected revenues are expected to balance the proposed operating budget including the attached Budget Checklist. Resolution 2013 -_: Fiscal Year 2013 -14 Budget Adoption June 11, 2013 Page 2 DISCUSSION: Background Pursuant to Section 1102 of the Newport Beach City Charter, and Council Policy F -3 titled Budget Adoption and Administration, the Proposed Budget for the 2013 -14 Fiscal Year was first submitted to the City Council on May 9, 2013. The City Council held budget study sessions on May 14, 2013, and May 28, 2013, to review the City Manager's Proposed Budget for the 2013 -14 Fiscal Year. The City Manager's Proposed Budget for Fiscal Year 2013 -14 is balanced and reflects the City Council's commitment to fiscal sustainability and the effective allocation and management of the City's resources. The proposed General Fund revenue budget is $166 million, an increase of 2.2 %, or $3.5 million, over the amended Fiscal Year 2012 -13 General Fund budget. The increase appears modest due to certain one -time revenue sources received in Fiscal Year 2012 -13, which are not expected to reoccur in Fiscal Year 2013 -14. These include the distribution of our equity interest in the Airborne Law Enforcement joint powers authority of $2.5 million, the distribution of unencumbered proceeds from a County redevelopment agency (RDA) of $1.9 million, and certain other revenue. The General Fund's top three revenue sources are projected to increase as follows: secured property tax 4 %, sales tax 5.5 %, and transient occupancy tax 7 %. The total revenue for all funds is projected to increase 9% over the revised Fiscal Year 2012 -13. The backdrop for these positive developments is the increasing vitality of our local economy. Housing demand and values are increasing as are the number of new jobs in Orange County, thereby resulting in greater consumer confidence and spending. The recovering economy and the Council's guidance in recent years provide us with the opportunity to commit resources that are in furtherance of the City's policies, goals, and priorities. The Fiscal Year 2013 -14 proposed General Fund expenditure budget, including capital improvements, is projected at $162.3 million, an increase of 3.2 %, or almost $5 million, over the amended Fiscal Year 2012 -13 General Fund budget. Total proposed City expenditures in Fiscal Year 2013 -14, including debt service and capital projects, is $278.9 million. In summary, the balanced budget that you see in Fiscal Year 2013 -14 lays the groundwork for a stronger City government in the following key areas: Vital Support System for Law Enforcement • A new Crime Suppression Unit consisting of three officers and one Sergeant will mitigate State legislative action that shifts, and thereby will result in the early release into our community of, convicted felons from State prisons to County jails. • A reinvestment in the 800MHz system will provide vital communication support to public safety and other emergency operations. Community Serving Facilities and Basic Infrastructure • A General Fund contribution of $7 million to the Facilities Financial Planning Reserve will fund facility projects such as: Marina Park, Sunset Ridge, Lifeguard Headquarters, and the Corona del Mar Fire Station. Resolution 2013 -_ Fiscal Year 2013 -14 Budget Adoption June 11, 2013 Page 3 A General Fund contribution of $5 million to the City's Capital Improvement Program will provide for Balboa Boulevard landscape rehabilitation, street and sidewalk maintenance, park structure replacements., and other projects. Reducing the Cost of Personnel • A reduction of 16 Full -time and 14 Part-time FTE positions (net of the law enforcement personnel additions mentioned above) will reduce the cost, while maintaining the same level, of service delivery. • Increased pension contributions from City employees and lower tier benefits for new employees will reduce the cost of personnel over the long -run. • Accelerated payments on pension unfunded liability and retiree insurance unfunded liability will reduce the cost of the City's long -term liability. Better and Smarter Technology — Funding for the following technology enhancements will allow the City to function with greater efficiency: Integrated financial and human resource, or "Enterprise Resource Planning" (ERP) system. • Computer -aided dispatch system. • Online permitting system. • Web and phone applications to provide the community with convenient access to the City's business applications. Budget Checklist The City Manager is recommending changes to the Proposed Fiscal Year 2013 -14 Budget released on May 9, 2013. These changes are found in the Budget Checklist on Attachment A, which is an itemized listing of all proposed budget checklist items. As stated in City Council Policy F -3, all Council directed changes to the City Manager's Proposed Budget shall be added to the Budget Checklist. The Mayor will call for a straw vote on each checklist item during the public meeting. The expenditure appropriations from the Proposed Fiscal Year 2013 -14 Budget and the Budget Checklist are summarized as follows: FY 2013 -14 Proposed Expenditures General Fund Proposed Operating & CIP Budget Operating Budget Expenditure Adjustment Supplemental Operating Expenditure Budget Requests Supplemental CIP Expenditure Budget Requests CIP Rebudgets' Total FY2013 -14 Expenditure Budget & Checklist $ 162,340,392 (1,846,675) 1,916,470 720,000 175.252 $ 153,305,438 All Other Funds $ 116,577,484 2,762,721 459,786 7,518,740 $ 127,318,731 Total All Funds I 5 278,917,876 1 4,679,191 1,179,786 7.693.992 $ 290.624.170 1 ' A rebudget moves a capital improvement project appropriation from one fiscal year to the next as most capital projects span more than one fiscal year. Resolution 2013 -_. Fiscal Year 2013 -14 Budget Adoption June 11, 2013 Page 4 The revenues appropriations from the Proposed Fiscal Year 2013 -14 Budget and the Budget Checklist are summarized as follows: Proposed Revenue Budget Supplemental Revenue Estimates Total FY 13.14 Revenue Budget Checklist Fund $ 165,872,691 170,000 $ 166,042,691 Funds $ 87,831,650 1,459,534 $ 89,291,184 Total All Funds $.253,704,341 8 It is important to note that the Fiscal Year 2013 -14 General Fund budget is balanced, as indicated below, with a surplus of $600. FY 2013 -14 Proposed Budget 8 Checklist - Surplust(Deficit) General Fund Operating Surplus - AsPrinted $ 751,395 Expenditure Adjustment. 1,846,675 Proposed Operating Surplus $ 2,598,070 FY 13.14 Checklist Operating Expenditures $ 1,916,470 FY 13 -14 Checklist CIP Expenditures 720,000 FY 13 -14 Checklist Revenue Estimates (170,000) " "FY 13 -14 Adjusted General Fund Transfer to Tidelands 131,000 Checklist Changes that Affect the General Fund $ 2,597,470 Adjusted Operating Surplus $ 600 -'The General Fund transfer of $131,009 to the Tidelands Fund is needed to fund additional contemplated Tidelands expenditures on the checklist. Staffing Changes The City Manager's Proposed FY 2013 -14 Budget includes funding for 736 full -time and 111.88 full -time equivalent (part-time) positions, a reduction of 16 full -time and 14.26 full - time equivalent positions from FY 2012 -13. This is the result of continued departmental restructuring, realignment of functions, and contracting out. Four additional position changes are being submitted for consideration on the Budget Checklist: Full -time Position Budget Checklist Changes: Add one Administrative Assistant in Public Works Delete the Cultural Arts Coordinator position in Library & Cultural Arts Full -time Equivalent (part -time) Position Budget Checklist Changes: Add .5 FTE Senior Fiscal Clerk in Finance /Revenue Delete .47 FTE Office Assistant in Public Works Resolution 2013 -_: Fiscal Year 2013 -14 Budget Adoption June 11, 2013 Page 5 If the position changes on the Budget Checklist (Attachment A) are approved as listed, it will result in funding for 736 full -time and 111.91 full -time equivalent (part-time) positions, the lowest staffing levels in more than 10 years. Planning Commission Review The Planning Commission agenda for their June 6, 2013, meeting includes their review of the Proposed Fiscal Year 2013 -14 Capital Improvement Program to determine consistency with the General Plan. ENVIRONMENTAL REVIEW: 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 1, 2013. Prepared by: Z11= Submitted by: Dan Matusiewicz Dave Kiff U Finance Director City Manager Attachment: A. FY 2013 -14 Budget Checklist B. Resolution 2013- ATTACHMENT Budget Checklist - Amendments to the Proposed Budget Fiscal Year 2013 -14 Budget Department/Account NumberlDescription Increase (Decrease) Approved 1 GENERAL- FUND',SURPLUSADJUETMENT' =____ — _— Expenditure adjustment - Move requested budget appropriation to surplus $ (1.846,675 RANGES T_ ___ -k' C - _ - , O;THE'IPROPOSED BUDGET7A53PRINTED =;OPERATING ;EXPENDIT.UREST Administration Management Increases S 35,000 Debt Service - Investment Advisor $ (32,000) Part-time Senior Fiscal Clerk salary & benefits at.5 FTE $ 35,470 General Fund Transfer to FFP Reserve Fund $ 1,000,000 General Fund Transfer to Facilities Maintenance Plan Fund $ 250,000 City Council Crystal Cove Cottages - Renovation Support $ 20,000 Balboa Island Historical Society $ 15,000 Newport Bay Conservancy $ 30,000 Community Development City Hall Re -Use Consulting $ 50.000 Building & Plan Check Inspection Services (1001yo revenue offset) $ 100,000 Library & Cultural Arts Transition to Cultural Arts Contract. $ (68,000) Municipal Operations Electrical Maint / Repair (Streetlight Energy Efficient Demo) $ 50,000 Police Training Sergeant Promotion $ 49,000 Public Works Department CIP Traffic Operations Support and Contract Support $ 350.000 Salaries and Benefits (Admin Staffing Adjustment) $ 76,679 Salary savings (Admin Staffing Adjustment) $ (76,679) Tidelands Market Reuse Study on Newport Pier Concession $ 25,000 Workers' Compensation & General Liability General Liability Insurance Excess $ 45,000 General Liability Property Insurance _ $ 357,000 Workers' Compensation Excess Insurance $ 35,000 Equipment Fund Three additional Police. vehicles (2 motorcycles & i CSI van) $ 75,000 .800 MHz Radios $ 393.541 IT IT ISF Operational and Strategic Maintenance and Operating & Capital Outlay $ 1,259,930 Additional CADIRMS Implementation Costs $ 454,250 Narcotic Asset Forfeiture Fund Additional crime suppression expendilures $ 150,000 TOTAL CHANGES TO THE PROPOSED OPERATING EXPENDITURE BUDGET $ 4,679,191 TOTAL CHANGES TO THE PROPOSED OPERATING EXPENDITURE BUDGET BY FUND General Fund $ 1,916,470 Debt Service Fund. $ (32.000) Narcotic Asset Forfeiture Fund $ 150,000 General Liability Insurance Fund $ 402.000 Workers Compensation Reserve Fund $ 35.000 IT ISF $. 1,714,180 Equipment Replacement Fund $ 468,541 Tidelands Operating Fund $ 25,000 Total Changes to the Proposed Operating Exp Budget S 4,679,191 - CHANGES "T,OhTHE'PROPAO PE)'?BUDGET£?A51P,RINTEDn +CIp EXP,ENDIT;URES _ Capital Improvement Project Sediment Removal - Selenium al Big Canyon Golf Course $ 75,000 _Pump Station and Water Well Project (Southern Calif Edison component) $. 253,786 Newport Harbor Dredging Permit $ 56.000 Structural. Rehab of the Doryman Fleet Facility $ 50,000 City Street Light Circuit Rehabilitation $ 645,000 Arts & Culture Master Plan $ 100,000 TOTAL CHANGES TO THE PROPOSED CIP EXPENDITURE BUDGET $ 1,179,786 TOTAL CHANGES TO THE PROPOSED CIP EXPENDITURE BUDGET BY FUND General Fund $ 72(),000 Tidelands Fund $ 106,000 Contributions Fund $ 253,766 Public Arts Fund $ 100,000 Total Changes to the Proposed CIP Exp Budget $ 1,179,766 ^"LCHANGES,T,O 7HE PROPO,SED;;BUDGEU,'A RINTED_- ;REVENUE;= —' - -!' Budget Department/Account Number/Description Increase (Decrease) Approved Building & Plan Check Inspection Services (100% revenue offset) $ 100,000 General Fund Revenue Adjustment $ 20,000 Streetlight Energy Efficiency Demonstration (from SCE) $ 50,000 Tidelands Increment Revenue- Harbor Capital Fund S 1,205,748 Contributions Fund - Southern California Edison Refund $ 253,786 TOTAL CHANGES TO THE PROPOSED REVENUE BUDGET $ 1,629,534 TOTAL CHANGES TO THE PROPOSED REVENUE BUDGET BY FUND General Fund $ 170,000 Tidelands Harbor Capital Fund $ 1,205,748 Contributions Fund $ 253,786 Total Changes to the Proposed Revenue Budget ........... $ 1,629,534 _ - - APITAL• IMP_R • VEMENT P,ROGRAM:- ;F3EBUDGETS- -- -- -- ._. ___ —_ Budget Department/Account Number/Description Increase (Decrease) Approved Public Works 7011 - 0 7002 0 40 City Hall Interim Use Plan $ 28,395 7012- C2502010 Storm Drain Interceptors- Tier _ $ (22,058) 7012- C2502014 Storm Drain System Repairs and Sliplining $ (1.,400) 7013- C2001009 Sidewalk Curb and Gutter Replacement and ADA Improv $ 25,000 7013- C2002063 _ Balboa Boulevard Landscaping $ (22,265) 7013- C3001003 Transportation Model Maintenance. and Update $. 125,000 7013- C3001008 Traffic Signal Equipment Enhancement Program $ (10,420) 7013- C3002016 CitWwide Street. Signage, Striping and Marking $. 23,000 7014- C5002002 Buck Gully Stabilization $ 30,000 7181- C3002018 Traffic Signal Modernization Phase 6 $ 120,000 7231- C4402007 Seawall and Bulkhead Modifications $ 80,000 7231- C4402012 Eelgrass.Survey Lower Harbor $ (50,000) 7231- C4402014 Vessel Waste Pumpout Station Repair $ (15,000) 7231- C4801003 Bay Beach Sand Management and Minor Dredging $ 250,000 7251- C3002021 Eastbluff Bike Lane $ (88,712) 7251- C4402014 vessel waste Pumpout Station Repair $ (55,000)_ 7255- C5002006 Newport Coast ASB5 Protection Program $ (41,000 7261 - 03002018 Traffic Signal Modernization Phase 6 '$ 280,000 7271- C1002021 Central Library HVAC Refurbishment $ (15,050) 7284- C2502010 Storm Drain Interceptors - Tier 1 $ (96,799) 7410- C1002009 Civic Center and Park $ 677,764 7410 - 01002030 Civic Center and Park - Construction $. 5,456.318 7410 - 01002033 Civic Center and Park - FF &E. $ 4,153 7410 - 01002035 Civic Center and Park - OCIP Loss Claims $ 967.379 7410- CIO02041 Civic Center and Park - ITIAV $ 119,094 7411- C4002002: Marina Park $ (174,070) 7412 - 05100515 Sunset Ridge Park $ 19,000 7459- C5100379 Santa Ana Heights Utility Undergrounding $ 53.755 7541- C7002004 Big Canyon & Pon. Streets Sewer Diversion Improvements $ 26,905 TOTAL CAPITAL PROJECT REBUDGETS $ CAPITAL IMPROVEMENT PROGRAM REBUOGET SY FUND General Fund $ Building Excise Tax. Fund $ Contributions Fund $ Environmental Contributions Fund $. Civic Center Fund $ Marina Park Fund S. Measure M Competitive Fund S Misc SAH Projects Fund $ State Gas Tax Fund $ Sunset Ridge Park Fund $ Tidelands Fund $ Transportation and Circulation Fund $ Wastewater Capital Fund S. Total CIP RebudgetslChanges $ 7,693,992 175,252 (15,050) (143,712) (41,000) 7,224,708 (174,070) (96.799) 53,758 120,000 19,000 265,000 280,000 26,905 7,693,992 Attachment B RESOLUTION NO. 2013 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH; ADOPTING THE BUDGET FOR THE 2013 -14 FISCAL YEAR. WHEREAS, the City Manager of the City of Newport Beach has prepared and submitted to the City Council a proposed annual budget for the 2013 -14 Fiscal Year; and WHEREAS, the City Council has reviewed said proposed budget, detennined the time for the holding of a public hearing thereon, and caused a. notice of said hearing to be published not less than ten (10) days prior thereto in the official newspaper of the City, and copies of the proposed budget were made available for inspection by the public in the Office of the City Clerk and the Finance Deparhnent at least ten (10) days prior to said hearing; and WHEREAS, the City Council has held a public hearing on said proposed budget on June 11, 2013, and has made such revisions in the proposed budget as it deemed advisable; and WHEREAS, the City Manager has the authority to approve budget increases not to exceed $10,000 in any Budget Activity or Capital Project, in accordance with Council. Policy F -3 (Budget Adoption and Administration); and WHEREAS, the City Manager may accept donations or grants of up to $10,000 on behalf of the City and appropriate the funds for the purpose intended, in accordance with Council. Policy F-3 (Budget Adoption and Administration); mid WHEREAS, all requirements of the City Charter relating to the preparation and consideration of the animal budget have been complied with. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the budget of the City of Newport Beach for the 2013-14 Fiscal Year as revised by the City Council via the Budget checklist is hereby adopted. The total approved appropriation of $278,917,876 Attachment B ($260,897,610 with Transfers Out), plus any items on the approved Budget Checklist attached as Attaclunent A, has been allocated to the following ftiinds in the amounts hereinafter shown: Fund General Fund Ackerman Fund CD:BG Fund Asset Seizure Fund AQMD Fund. SLESF Fund, State Gas Tax Fund Measure M Fund Tidelands Fund Contribution. Fund Circulation Fund Building Excise Tax Environmental Liab. Newport Annexation Debt Service Civic Center Marina Park Sunset Ridge Park: LG Headquarters Strategic Planning CdiM_Fire Station' Rebuild. Big Cyn Reservoir Maint Yard MISC SAN Projects Fund Major Maintenance & Repair Insurance Reserve Fund Retiree Medical Fund Comp. Absence Fund IT Strategic Fund Equipment Fund Water Fund Wastewater Fund Total Appropriations Operating Budget $155,673,022 5,000 327,397 250,220 10,500 138,_ 222 0 0 2,509,600 0 0 0 176,886 1,200,000 10,633,017 0 0 0 0 0 0 0 0 0 5,963,51.0 3,428,403 2,670,050 7,782,977 4,735,471 19,281, 1.14 2,845,911 $217,631,300 Capital Budget $6,667,370 0 0 0 0 0 6,298;350 6,860,775 2,930,000 7,261,500 300,000 340,000 0 0 0 500,000 1.5,275,000 8,750,000 1,384,000 187,601 250,000 750,000 100,000 150,000 0 0 0 0 0 2,737,000 544,980 $61,286,576 Total Budget $1.62,340,392 $5,000 $327,397 $250;220 $10,500 $138,222 $6,298,350 $6,860,775 $5,439,600 $7,261,500 $300,000 $340,000 $1.76,886 $1,200,000 $10,633,017 $500,000 $15,275,000 $8,750,000 $1,384,000 $1.87,601 $250,000 $750,000 $100,000 $150,000 $5,963,51.0 $3,428,403 $2,670,050 $7,782,977 $4,735,471 $22,018,1.1.4 $3,390,891 $278,917,876 BE IT FURTHER RESOLVED that a copy of said approved budget, certified by the City Clerk shall be filed with the persons retained by the City Council to perform auditing functions for the Council, and a further copy shall be placed, and shall remain on file, in the Office of the City Clerk Where it shall be available for public innspection. Attachment B BE IT FURTHER RESOLVED that the budget so certified shall be reproduced and. copies made available for the use of the public and of departments, offices and agencies of the City. ADOPTED the i I °i day of June, 2013. MAYOR ATTEST: CITY CLERK Attachment: Budget Checklist PROOF OO F PU:LfCP,TlON STATE OF C LIFO;"'JIH )ss- COUNTY I am a citizen of the United States and a resident of the County of Los Angeles; I am over the age of eighteen years, and not a party to or interested in the notice published. I am a principal clerk of the NEWPORT BEACH /COSTA MESA DAILY PILOT, which was adjudged a newspaper of general circulation on September 29, 1961, case A6214, and June 11, 1963, case A24831, for the City of Costa Mesa, County of Orange, and the State of California. Attached to this Affidavit is a true and complete copy as was printed and published on the following date(s): Saturday, June 1, 2013 I certify (or declare) under penalty of perjury that the foregoing is true and correct. Executed on June 10, 2013 at Los Angeles, California i(1113 ,Kitt < 4 , ":'1 r `_ `/ r Juriea,'201 CITyYg F =NEWPORTj+BEACH; I ANITOPMSIEWICZT(999)C4,4,312 LFGA1-')NOTICE - NOTICHIIS7HEREBYGNENTHA ,T the CityCoun -W ofthe CitK Newport,. Beach will Bold a pubhc hearing regardmg�Ero ``p�osedjBugehe'�`�2013- 4� FtscalaYeaPtpursuant to Section�11021of .[he)NewporttBeac Ctty�aI t NOT�ICETiI3;HEREBYfOIUEN tTAAT saidlpubhc }h�earmg w[Itdbetha,] "doh the '11&4a 2013yzP the }houraofr7i00 p m Jm,the C y IialltC,bumff Chambers;r100fCrvw Cenfef'Drive Newpo2e, Beach,CAt92660, at),w111 ttme *anAplacemteresYe`d�persons [nay,a -p a'r]andbe heard [hereon TOTA DUDGETALl FUNDSIINCEUDING CAPITAL IMPROVEMENTS �,SalarresandBenefits, Maktenanc`eL dOpaFatioas 5128,011;14,,4, 73,428M905i 1CaprtaljOutl'ayi _ - - r, "496,5(2 Caprd1Ji g ;ovements Seiv, ice. 6 75 6 ,.Debt - ,If�4�73Q, .To �Bu4,90t "' 5278.917.876