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Home My WebLink About01 - Proposed Fiscal Year 2020-21 Operating Budget - PowerPointMay 26, 202 Ow r Special Meeting rv�*A Item No. 1 ' { 8k--;:d Joint Finance Committee/City Council Meeting Fiscal Year 2020-21 Proposed Budget May 26, 2020 2 Overview • The FY 2020-21 Proposed Budget is balanced. • The initial 2020-21 Budgetary Gap was $33.2 million. • Budget balancing strategies rely on a number of short- term tiered budgetary solutions. • Budget maintains current service levels. • Budget continues its commitment to maintaining critical CIP infrastructure and aggressive payment schedule of unfunded pension liability. • Budget is a placeholder and will be reviewed after first quarter results. COVIDm19 Disclaimers • COVID-1 9 dealt a sudden and significant blow to local, national and global economies. • Early stages of administering financial first aid. • The Proposed Budget is an initial bridge to financial recovery, not along-term solution if fiscal conditions persist past June 2021! Administering Fiscal First Aid 12 Steps through the process rd Now 3 Stages of Financial Recovery 1 % ' BRIDGING REFORM ' m TRANSFORM o i Recovery Plan Detailed 4 diagnosis Diagnosis Time Bankruptcy] Receivership Recovery Long -Term Fimandal Planning Planning Starts Community July 1, 2020 �011 S {0 • �oS� 4* I-- DECLINE DISTRESS --I I– STABILIZATION –11 RECOVERY F— FINANCIAL HEALTH ---I Your Financial Condition U 25,000 20,000 15,000 10,000 5,000 ell Short-term Budgetary Solutions Proposed Short-term solutions made to Operations, Capital Funding and Capital Expenditures by way of reversable levers as an initial bridge to financial recovery. General Fund Sources and Uses 2018-19 2019-20 2020-21 ACTUAL REVISED STARTING BUDGET PROJECTION SOURCES: FY 16-17 Surplus FY 2017-18 Surplus FY 2015-19 Surplus FY 2019-20 Surplus Use of FY 2019-20 Contingency Reserve Operating Revenues Less: Restricted Revenues Use of Restricted Revenues and Encumbrances Transfers -In TOTAL SOURCES USES: Operating Expenditures Operatic)nal Savings Transfers Out Set aside -PERS Reserve Increase in Contingency Reserve TOTAL USES UNRESTRICTED RESOURCES CONTINGENCY RESERVE 12,090,743 - - 1,428,885 11,591,448 - - 11,528,065 - - - 12,105,574 199}583}904 F229,812,594 219,003,184 (345,135) (1,534,114) (730,967) - 2,549,640 20,000 15,849,196 13,359,413 9,028,759 $ 258,8361288 256,527,586 220,010,570 208,164,257 219,837,899 230,126,525 - (4,722,705) - 34,824,531 29,303,571 23,088,804 4,319,430 - - $ 24713081215 244,418,762 25312151329 $ 11,525,065 12,108,874 $ (33,204,759) 54,969,903 $ $ 52,618,059 $ 52,618,059 E Tiered Short-term Budget Reduction Strategy - All Funds Operating Cuts Deferred TOTAL GAP Financial First Aid - initial Bridging No Service Temp Hiring Capital Funding ISF Charge Contingency Service Level FUNDING Options Level Change Freeze & Spend Reductions Reserve Cuts SOLUTIONS Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 Salaries And Benefits Salaries, Benefits and Other Pays (2,000,000) (2,000,000) Discretionary Pension Payments (2,316,684) (2,316,684) Total Salaries And Benefits (2,000,000) (2,316,684) (4,316,654) Maintenance And Operations - Professional & Contract Services (1,774,131) (1,774,131) Internal Service Premiums (17,511) (4,500,000) (4,517,511) Workers' Compensation (1,000,000) (1,000,000) General Liability - Uninsured Claims (1,000,000) (1,000,000) OPEB - Equipment Replacement/Mainte (17,511) (500,000) (517,511) Information Technology (2,000,000) (2,000,000) Maintenance & Repair (179,009) (179,009) Supplies & Materials (289,671) (289,671) Utilities (361,201) (361,201) General Expenses (98,300) (98,300) Travel & Training (151,115) (151,115) Grant Operating Expenses (40,000) (40,000) Total Maintenance And Operations (2,910,938) (4,500,000) (7,410,938) Total Transfers Out (18,477,137) (500,000) (18,977,137) Capital (2,500,000) (2,500,000) General Fund Discretionary Reserves - Total by Tier (2,910,938) (2,000,000) I (20,977,137) (5,000,000) (2,316,684)1 (33,204,759) Cumulative by Tier (2,910,938] (4,910,938) (25,555,075) (30,888,075) (33,204,759] General Fund Sources and Uses SOURCES: FY 16-17 Surplus FY 2017-18 Surplus FY 2018-19 Surplus FY 2019-20 Surplus Use of FY 2019-20 Contingency Reserve Operating Revenues Less: Restricted Revenues Use of Restricted Revenues and Encumbrances Transfers -In TOTAL SOURCES USES: Operating Expenditures Operational Savings Transfers Out Set aside -PERS Reserve Increase in Contingency Reserve TOTAL USES UNRESTRICTED RESOURCES CONTINGENCY RESERVE 181 A B B -A B/A 2018-19 2019.20 2020.21 2020-21 ACTUAL REVISED STARTING PROPOSED BUDGET PROJECTION BUDGET $ VAR % VAR $ 12,090,743- 1,428,885 11,591,448 - - (11,591,448) -100.0°x6 - 11,528,065 - - (11,528,065) -100.096 - - 12,108,874 12,1D8,874 12,108,874 - - - - 2,316,684 2,316,684 - 229,812,594 219,003,184 199,583,904 199,583,904 (19,419,280) -8.9% (345,135) (1,534,114) (730,967) (730,967) 803,147 -52.4% - 2,549,640 20,000 20,000 (2,529,640) -99.2% 15,849,196 13,389,413 9,028,759 4,171,130 31.2% $ 258,536,283 $ 255,527,535 $ 220,010,570 $ 230,859,038 $ (25,668,595) -10.0% $ 208,164,257 $ 219,837,899 $ 230,126,525 $ 219,859,038 $ 21,139 0.0% - (4,722,705) - - - - 34,824,531 29,303,571 23,088,804 6,000,000 (23,303,571) -79.5% - - - 5,000,000 5,000,000 - 4,319,430 - - - - -100.0% $ 247,308,218 $ 244,418,762 $ 253,215,329 $ 230,859,038 $ (18,282,432) -5.5% $ 11,528,065 $ 12,108,874 $ (33,204,759) $ - $ (7,386,166) -100.0% $ $ (2,316,654) -4.4% $ 52,618,059 $ 52,615,059 $ 54,969,903 50,301,375 181 Revenues 2018-19 SOURCE by Category ACTUAL Property Taxes Sales Takes Charges for Services Use of Money & Property Other Takes Transient Occupancy Tax Licenses and Permits Fines & Penalties Other Revenues Intergovernmental TOTAL GENERAL FUND 108�365e 61 38e50 A70 0e300'379 1)609e169 51988044 4,697e446 51071e609 3A54e660 3e901e 104 3e922,453 A B B -A 2020-21 2019-20 START NG 2020-21 REVISED PROJECTION PROPOSED VAR 112�723e6 6 34e411A05 18NOX M676e836 81316J70 191O87e031 41567,521 3+0891260 4e511e39 e800e003 1 M567�018 38�760XO 2 1e276e330 11141e43 914411789 71599e738 5J38e647 31545e50 21604e422 11995e374 117�508�227 28e690e831 17e35OX3 9e8 1e619 7e701e878 6e434,115 4e39e333 3e681e031 e509e51 1e646e716 4e784e601 (5e70e574) (1e46%099) (855,217) (614e9) ( 1e65e916) (328e188) 591771 (100e078) (11153e87) B/A % VAR 4.2% —16.6% —7.81 —8.0% —7.4% —66.3% —7.% 19.2% —44.41 —41.2% 229,812,595 19,003, 188 241,0710x711 199,583,904 (19,413,279) -a.9 •I Property Tax D 4.2% Increase over Fiscal Year 2019-20 Sales Tax 16.6% Decrease over already reduced Fiscal Year 2019 -20. Transient Occupancy Tax 66.3% Decrease over already reduced Fiscal Year 2019-20 10 Expenditures 2018-19 2019-20 EXPENDITURES BY CATEGORY ACTUAL REVISED Salaries and Benefits $ 142,315,971 145,397,927 Professional & Contract Services 2113181540 25,987,695 Internal Service Premium 23,154,076 26,008,196 Maintenance and Repair 914691175 9,394,130 Supplies & Materials 512.351678 5,360,234 Utilities 219711221 .3,.328,840 General Expenses 212091597 2,272,634 Travel & training 8261174 9671741 Grant Operating Expenses 663,825 1,120,502 Operational Savings - (4,722,708) TOTAL 208,164,257 $215,115,191 2020-21 STARTING PROJECTION $ 156,491,072 25,458,712 26,104,060 8,929,894 5,990,636 .31.3221958 2,223,801 964,483 640,000 2020-21 PROPOSED $VAR. o VAR $ 149,134,523 23,684,581 26,087,458 8,750,885 5,700,965 2,961,757 2,12 5,501 81.3,.368 600,000 3,736,596 (2,303,114) 79,262 (643,245) 340,731 (367,083) (147,133) (154,373) (520,502) 280,126,525 219,859,038 4,748,847 2.6 -8.9 0.3 -6.8 6.4 -11.0% -6.5 -16.0% -46.5% 2.2% COVID=1 9 Impacts to Other Funds • Tidelands: Decline in price of oil will result in revenue shortfall of $354,000 within the Tidelands Operating Fund and an additional $757,588 in the Tidelands Capital and Operating Fund for FY 2020-21 for other tidelands related revenue. • Gas Tax: Reduction in fuel consumption will result in revenue shortfall of $72,000 for FY 2020-21. • Measure M: Reduction in taxable sales will result in revenue shortfall of $70,000 in Measure M2 Local Fair Share Program allocation for FY 2020-21. • Water and Wastewater: An increased number of accounts may be delinquent as a result of Governor Newsom's Executive Order N-42-20 temporarily suspending water shut off. However, staff does not anticipate a material impact to the Water and Wastewater Funds. Program Enhancements Harbor Department - $43,316 (Tidelands Fund) • Transfer of Code Enforcement Supervisor from the Community Development Department • Additional part-time Code Enforcement Officer Trainees, offset by reduction of Department Assistant and Harbor Service Workers - total overall increase of .5 FTE Public Works - $106,658 (Environmental Liability Fund) • Added 1.5 part-time Code Enforcement Trainee positions to be funded by the Environmental Liability Fund Utilities Department — $336,300 (Multiple Funds) • Replacement of two Monochloramine water analyzers, and three chlorine water analyzers for the 16th Street Pump Station and Big Canyon Reservoir (One-time) • Additional appropriations for contract services for street sweeping contract Staffing Levels FILL TIME FY 19 FY 20 FY 21 DEPARTMENT F/T F/T F/T DEPARTMENT City Attorney City Clerk City Manager Community Development Finance Fire Harbor Human Resources Library Police Public Works Recreation & Sr Svcs Utilities TOTAL PART TIM E 7.00 7.00 7.00 City Attorney 5.00 5.00 5.00 City Clerk 21.50 21.50 21.50 City Manager 50.10 50.10 49.20 Community Development 32.00 32.00 32.00 Finance 143.90 143.90 143.80 Fire 1.00 1.00 2.00 Harbor 11.00 11.00 11.00 Human Resources 36.00 36.00 36.00 Library 231.00 232.00 232.00 Police 92.50 93.00 93.00 Public Works 42.00 42.00 42.00 Recreation & Sr Svcs 53.00 53.50 53.50 Utilities 726.00 728.00 728.00 TOTAL FY 19 FY 20 FY 21 FTE FTE FTE 1.00 1.60 1.60 1.00 1.00 1.00 2,00 1.80 1.80 7,86 10.20 10.20 4.26 4.55 4.55 42.17 43.12 43.12 9.89 8.89 9.39 0.50 1.25 1.25 22.83 22.83 22.83 13.87 14.87 14.87 6.05 6.35 7.55 38.13 38.00 38.00 1.46 3.96 3.96 151.D2 158.42 16D.12 14 Capital Appropriations by Category Category Assessment Districts Facilities Miscellaneous Parks, Harbor, Beaches Streets & Drains Transportation Waste at r Water Water Quality & Environment Grand Tota Total CIP Budget 91699,197 10,064,500 8,555,011 24,353,538 16,573,200 8,460,788 1,800,000 E12,733,475 41741,344 86,9811048 Critical Capital Infrastructure Maintenance Carries on! 9 FY20 and FY21 Project Adjustments per Council Direction Project Title $10,0; ............................ $80,4= ........................... $130,0( ............................ 75,0{ ........................... $295,5: ............................ $9,564, $1,350,000 ........................................ $2,555,720 ........................................ 200,000 ........................................ $64,866 ........................................ $35,000 ........................................ $51005,586 ........................................ i $700, 0 $0 ............................................. $3,200,000 FY20 and FY21 Project Adjustments per Council Direction A1�. Project Title PROJECTS DEFERRED - REPROGRAM TO FY 2021-22 Balboa Boulevard Median Improvement ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $1,972,236 Balboa Ward Enhancements $0 $0 $88,400 ................................................................................................................................................................................................................................ Central Library Lecture Hall ................................................................................................................................................................................................................................ ................................................ $0 ................................................ ..................................................... ..................................................... ...................................................... $0 ...................................................... $7,360,052 Cliff Drive Mobility Improvements ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... S250,00 Cliff Drive Park Clubhouse $0 $0 $540,000 ................................................................................................................................................................................................................................ Collins Islands Bridge Replacement ................................................................................................................................................................................................................................ ................................................ $0 ................................................ ..................................................... ..................................................... ...................................................... $0 ...................................................... $150,000 Facilities Strategic Planning ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $50,00o Junior Lifeguards Building ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $3,179,991 Landscape Enhancement Program ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $623,512 Marine Ave Rehabilitation $0 $0 $231,129 ................................................................................................................................................................................................................................ Newport Blvd Landscape Rehab ................................................................................................................................................................................................................................ ................................................ $() ................................................ ..................................................... ..................................................... ...................................................... $0 ...................................................... $711,270 Ocean Boardwalk / Parking Lot Improv ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $350,00o Orange Coast River Park Vision Plan ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $20,000 Park Walls and Staircases Rehab $0 $0 $500000 ................................................................................................................................................................................................................................ Santa Ana Avon Slope Improvements ................................................................................................................................................................................................................................ ................................................ $0 ................................................ ..................................................... ..................................................... ...................................................... $0 ...................................................... $335,070 West Newport Park Rehabilitation ................................................................................................................................................................................................................................ $C) ................................................ ..................................................... $o ...................................................... $225,500 West Newport Streetscape ................................................................................................................................................................................................................................ $0 ................................................ ..................................................... $0 ...................................................... $486,560 WC Highway Median Landscaping ................................................................................................................................................................................................................................ $() ................................................ ..................................................... $0 ...................................................... slwom Subtotal $0 $0 $17,073,720 ................................................................................................................................................................................................................................ Grand Total ................................................ $01 ..................................................... ...................................................... $0 $20,273,720 Next Budget Milestones • Thursday, June 4 —Finance Committee to develop written comment on City Manager's Proposed FY 2020-21 Budget. Recommendations for changes to Proposed budget will be presented via Proposed Budget Revision (PBR). • Tuesday June 9 —City Council Budget Adoption and GANN limit public hearing. • November 2020 — Review budget after first quarter results