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HomeMy WebLinkAbout19 - A Budget Amendment to Fund Overtime Shortfall Related to Increased Building Activity; and Increase Costs for Advertising and Public Relations�aE`x'PORr CITY OF NEWPORT BEACH Hearing Date: January 11, 1999 O� COMMUNITY AND ECONOMIC DEVELOPMENT Agenda Item No.: 19 PLANNING DEPARTMENT 3300 NEWPORT BOULEVARD Staff Person: Patricia L. Temple NEWPORT BEACH, CA 92658 (949) 644 -3200 (949) 644 -3200: FAX (949) 644 -3250 REPORT TO THE MAYOR AND CITY COUNCIL SUBJECT: A Budget Amendment to Fund Overtime Shortfall Related to Increased Building Activity; and Increased Costs for Advertising and Public Relations ACTION: Approve the requested budget amendment. Background In the 1998 -99 Fiscal Year Budget, funding was requested for paid overtime (2710 7040) and advertising and public relations (2710 8010), at a level established by the prior.year's actual expenditures. However, as a result of a much higher than anticipated work volume, combined with the use of contract plan check companies by the Building Department, the Planning Department has nearly exhausted the budget line for advertising and public relations, and has exceeded the budget established for overtime costs in an effort to provide timely service. Discussion Overtime The Planning Department typically has very low costs associated with authorized overtime for its employees. Charges to the budget line historically are secretarial overtime for night meetings, and occasionally planners for expedited plan check. This year, the extremely high volume of building activity has caused two changes, which have significantly altered the Department's need for funding of overtime. First, there has been an increase in expedited plan check. Second, and most importantly, the Building Department has commenced use of outside plan check companies. This has significantly reduced that Department's turn - around time. Since we have a relatively fixed amount of personnel available for assignment to the plan check function (currently 2.5 of 7 FTEs, or 35% of our personnel resources), the Planning Department is now a "bottleneck" for many projects seeking a building permit. As a result, plan check personnel have been working far more overtime hours than anticipated, and even more hours will be required to clear up the backlog and keep turn - around times consistent with the Building Department. There are planners in the Department who previously served in the plan check function. While these employees do not have any excess available hours within their normal workweek, two of them have offered to work additional hours plan checking, if they can be paid for their overtime. From the Department's point of view, this is a good solution. These planners are very familiar not only with the City's process, procedures, and computer systems, but also with the specifics of the Zoning Code, Specific Plans, and Planned Community District Regulations, which are unique to the City of Newport Beach. It is felt that using these staff members to assist in plan check will result in excellent efficiency, and minimal errors due to misinterpretations of the Code. We have explored the possibility of utilizing private contractors to address this problem. This approach is not recommended for two reasons. First, the hourly overtime rate for the Associate Planners interested in the overtime is $40 (1.5 times $26.73). This is compared to the hourly rates of a firm offering planning services at similar experience levels of $45 for Technician level, $52.20 for Assistant Planner level, and $67.50 for Associate Planner level. Using in -house staff is, therefore, a more cost - effective approach. Second is the previously mentioned Code familiarity. It would take a significant amount of time for outside planners to "come up to speed," and would also require in -house staff to spend time training outside personnel on the operation and unique characteristics of our Codes. Staff also contacted the City of Irvine for information related to contract planning services. A manager in that City's Community Development Department indicated that they use outside plan checkers only for very simple projects, like tenant improvements. They would not consider outside planners for remodels or reconstruction of homes or businesses, due to the high likelihood of plan check errors. The Department has estimated that a budget amendment of $25,000 will be necessary to address this funding issue. This will resolve the current budget shortfall in the Department's overtime budget ($7,000), cover continued overtime for secretarial staff and for expedited plan check, as well as fund overtime costs of other Department planners assisting in plan check. This will allow the Department to overcome the existing backlog, and make sure the Planning Department's plan check turn - around stays equivalent to the Building Department's. General Fund Implications In making this decision, the City Council should be aware that, while the Planning Department revenues are also higher than anticipated in this year's budget, this budget amendment is not revenue neutral from a General Fund standpoint. The City Council has established the revenue recovery ratio for Planning Department plan check at 50% of the "fully loaded" hourly rate. Since we are requesting overtime funding for day to day plan check activities, and not just for expedited plan check, costs associated with the day to day plan check would be recovered at only one third of the cost (50% vs. 150 %). This is because most projects handled on an overtime basis would not be expedited at the request of the applicant, and, therefore, would not be charged a premium fee of time and one -half. Planning Department Budget Amendment Page 2 Advertising and Public Relations The advertising and public relations budget line is used to pay the costs of newspaper advertising for public hearings. As of the fifth month of this budget year, the Department has expended nearly 90% of the budgeted amount for this activity. Staff has reviewed the reasons for this shortfall, and concluded that it is attributable to a significant increase in workload combined with the extra noticing requirements associated with the staff level approvals instituted in the Zoning Code update. We tried to anticipate the increased need for funds for this activity by increasing the budgeted amount from $1,500 to $2,500. However, based on our year -to -date expenditures, this budget line needs to be increased to $5,000 ($2,500 additional). It should also be noted, however, that the fees charged by the Department for these applications includes the cost for advertising. Therefore, the General Fund is receiving revenue to offset these added costs. Submitted by: SHARON Z. WOOD Assistant City Manager Prepared by: PATRICIA L. TEMPLE Planning Director Planning Department Budget Amendment Page 3 City of Newport Beach BUDGET AMENDMENT 1998 -99 EFFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates X Increase Budget Appropriations AND X Transfer Budget Appropriations from existing budget appropriations from additional estimated revenues PX from unappropriated fund balance EXPLANATION: NO. BA- 032 AMOUNT: $27,500.00 Increase in Budgetary Fund Balance Decrease in Budgetary Fund Balance No effect on Budgetary Fund Balance This budget amendment is requested to provide for the following: To appropriate $25,000 for overtime needed to expedite plan checks associated with increased volume in the Building Department. To appropriate $2,500 for newspaper advertising for public hearings. The Planning Department anticipated an increase in costs associated with the Building Department activity, but underestimated the extent of such increased activity. There have been no prior budget amendments made to these accounts during this fiscal year. The proposed budget amendment would reduce surplus reserves in the City's General Fund. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Account 010 3605 REVENUE APPROPRIATIONS (3601) Fund /Division Account EXPENDITURE APPROPRIATIONS (3603) Amount Debit Credit Description Fund Balance Control $27,500.00 ' Description Signed: C 4 - P-P Finan ' pproval: Finance Dire Date Signed: Administrative Approval: City -Manager Date Signed: City Council Approval: City Clerk Date Description Division Number 2710 Administration /Planning Account Number 7040 Overtime, Misc. $25,000.00 Division Number 2710 Administration /Planning Account Number 8010 Advertising and Public Relations $2,500.00 Division Number Account Number Division Number Account Number Division Number Account Number Signed: C 4 - P-P Finan ' pproval: Finance Dire Date Signed: Administrative Approval: City -Manager Date Signed: City Council Approval: City Clerk Date