HomeMy WebLinkAboutFin FY 2009-10 Budget AmendmentsOlry OF
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Agenda Item No: 8
Meeting Date: January 4, 2010
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: FINANCE DEPARTMENT
Prepared by: Cindy�osser, Finance Director & City Manager Approval: K
SUBJECT: BUDGET UPDATE AND RESOLUTION ADOPTING AMENDMENTS TO
THE CITY OF SAN RAFAEL BUDGET FOR FISCAL YEAR 2009-2010
BACKGROUND:
As the economy plunged into the depths of the recession, the City faced a multi-million dollar
deficit for fiscal year 2009-2010. The City implemented many cost savings methods outlined in
the Recession Action Plan to remedy the situation. Furloughs for non -safety employees, early
retirement program, a hiring freeze, position eliminations including layoffs, and deferrals of
contractual salary increases are some of the actions taken to attack the deficit. With the
Council's guidance, the budget adopted in July 2009 projected a balanced budget for fiscal year
2009-2010. Since July, major economic changes continued to occur which requires the City to
modify the adopted revenues and expenditures. Many of these modifications were presented to
the Council at the November 16th Council study session. This report intends to define our rapidly
changing budget picture, and present a series of amendments that are necessary to meet our
obligations and attempt to balance the budget.
At the December 15th special City Council meeting, the Department Directors presented various
scenarios and service impacts in order to bridge another multi-million dollar gap. This report
will also discuss some challenges about the state of our fiscal condition, and how staff intends to
address these challenges. This report will provide the City Council and community with an
update on our budget picture.
This report will focus on several key areas, including an overview of the City's projected
financial condition, including major revenue and expenditure assumptions used to derive the
presented data and a multitude of budget balancing recommendations.
FOR CITY CLERK ONLY
File No.:
Council Meeting:
Disposition:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paue: 2
ANALYSIS:
FISCAL YEAR 2009-2010:
Although this is starting to sound like a broken record, the City's finances are spinning out of
control. The City will have to hit the rewind button and play the budget balancing game once
again. Overall, with the modifications detailed below, the City's finances are still in need of
some major overhaul. Actions that need to be taken to address specific revenue and expenditure
situations are detailed below.
REVENUES.
Exhibit A reflects modifications to fiscal year 2009-2010 revenues. Two categories are
presented. Category One represents the items recommended from the City Council actions since
the start of the fiscal year. Additional General Fund and Non -General Fund changes are
presented as Category Two. A breakdown of the changes is shown on Exhibit A. Highlights of
changes in Categories Two include:
• Tax Revenues — a reduction of approximately $3,100,000 is needed for various tax revenue
accounts. The biggest reduction is for $1.5 million for the Triple Flip Back -Fill revenue —
due in part to the State's overpayment correction of approximately $750,000 in fiscal year
2008-2009. Sales tax revenue also requires a reduction of approximately $1 million — due in
part the slow economy and loss of major car dealerships. One silver lining is that the State's
borrowing of $1.5 million in Proposition 1A property tax will be offset with the City's
participation in a securitization program of Proposition I borrowing.
• Grant revenue adjustments of approximately $109,000 have been made for the State's
reduction of services for the Latchkey grant.
• Fees and Fine revenues will be reduced for the Red Light Camera program in the amount of
$400,000 due to a delay in the start of the program. The appropriations for contractual
services will also be adjusted to reflect the delay.
EXPENDITURES:
Changes included in appropriations are found in Exhibit B. Similar to the revenue schedule, two
categories are used in order to help classify all of the changes to fiscal year 2009-2010. The
actions listed as #1's reflect budget decisions made from July through December. Category Two
illustrates additional General Fund and Non -General Fund changes not formally presented to the
City Council prior to this mid year budget report.
Changes to the debit side of the budget (in Category Two of Exhibit B) include:
T Staffing cost reductions for vacancy savings and position reclassification are approximately
$135,000.
A Net reductions for contractual service and utility cost changes total approximately $170,000.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pam 3
With the changes made with Exhibit A and Exhibit B, the City is facing a General Fund deficit of
$3.5 million. Another integral part of the budget process for this year is shown on Exhibit E.
These are the City Manager's Round #1 recommendations to the budget challenges the City is
facing. Recommendations include freezing or eliminating vacant positions, reductions in
temporary seasonal help, various supply accounts and contractual services, and allocating costs to
other funds and finding other sources of funds.
With all the modifications, the following table illustrates a breakdown the City's total budget of
$81.7 million between the capital and operating budget and further illustrating the General Fund
appropriation.
General Fund:
After countless hours working with all the Departments and obtaining guidance from the City
Council for service priorities, the City's General Fund, which accounts for most of the major
services to our residents and businesses (such as police, fire suppression and prevention,
planning, building, library, parks, streets, engineering, traffic enforcement and management,
cultural programs) is projected to be approximately $56.2 million for fiscal year 2009-2010
which includes the recommendations illustrated on Exhibit E.
CITY OF SAN RAFAEL
FISCAL YEAR 2009-2010
BUDGET FIGURES
a
-a e. -
Total City Budget
$81,658,260
Less: Capital and Special Project
4,380,160
Total Operating Budget
77,278,100
Less: Restricted Funds Gas Tax, etc.
23,435,955
General Fund Operating Budget
53,842,145'1
Add: General Fund Program Support
2,369,720
Add: General Fund Projects
36,000
Total General Fund Appropriation
$56,247,865
The General Fund reserve is estimated to be 3.9% at the end of fiscal year 2009-2010. We are
estimating the reserves to dip down to $2.2 million for fiscal year 2009-2010. This amount is
well below the 10 percent goal in our approved financial policies.
BUDGET BALANCING RECOMMENDATIONS:
Dating back to early 2008, the City has been struggling to keep our budget balanced, as the
deepening recession, manifesting in local job losses, assessed valuation declines and retail
closures, has resulted in dramatic declines of both current and projected tax revenues.
Balancing the fiscal year 2008-09 and 2009-2010 budgets has required dramatic changes in order
to solve the recession based impacts which have been hampering our General Fund for these last
two years. A lengthy report was provided to the City Council at your June 1, 2009 meeting,
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
describing in lengthy detail what has been accomplished to keep our budgets in synch (up
through this past July).
I have included a summary of the many actions in the updated Recession Action Plan Progress
Report, which is included for your review (see Attachment I). As you can see, we have
implemented many of the Recession Action Plan strategies, saving millions of dollars. As we
have stated repeatedly over this past year, this economic down turn, and associated budget
challenges, are with us at least through budget year 2010-2011. 1 wanted to provide you
additional information concerning staffing and services as you consider another series of budget
actions to partially resolve our existing situation. I intend to summarize what has been done;
along with the latest results should you approve the Round #1 recommendations detailed in this
report.
Staffing losses:
As a reminder, staffing positions are presented as full-time equivalent employees (FTE's) based
on various workweek hours as negotiated in employee agreements. The totals by department
reflect a combination of full-time or permanent part-time positions which are entitled to all or
pro -rated benefits in accordance with the negotiated agreements for employees or individuals
who are under contract. These projected budgeted positions do not include temporary or
seasonal employees utilized for short-term or specific reasons during the year.
In July, the budget adopted reduced the total City staffing level, projected for fiscal year 2009-10,
to 416.47 positions. This reduction in staffing represented an overall 5% decline when compared
to the 2008-2009 levels. Fiscal year 2009-10 had a loss of 20.11 FTE's. The 20.11 FTE
reductions by Department produces varied results across the organization. By far the greatest
reduction for 2009-10 is in the Public Works Department, with a loss of 10 more positions, or a
drop of almost 13% in staffing when compared to the 2008-09 year. Next in line is the Library,
who sees almost a 9% decline with the loss of 2.11 positions, followed by Community
Development, with a 7% reduction (2.0 FTE).
We have provided a Personnel Authorization (Exhibit C) in this report, which delineates the
staffing changes by Department. We are showing the 2009-10 declines as adopted in July, with a
revised level of reduction based upon Round #1 recommendations. From input received at the
December 15th workshop, we are proposing additional staffing declines in several departments.
These do not involve layoffs at this time, but are slots that have been vacated due to retirements
and employee initiated departures. You will note a further loss of 12.75 positions, bringing the
current authorized total to 416 FTE. We have also noted in this schedule the staffing for FY
2010-11 (at this time), based upon the recommendations in this report being extended in next
fiscal year (unless denoted otherwise). While the recommended actions for your January 4, 2010
consideration do not include layoffs, further positions eliminations, including layoffs, will be
brought forward for your consideration at subsequent Council meeting(s).
Service Impacts:
Back in July, the staff work captured the reduction in services beyond just personnel cost savings
and loss of positions. Staff elaborated on how reorganizations and restructuring occurred in
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 5
several Departments as part of staffing reductions. Below I will summarize what transpired this
past July and offer some history/perspective on major Department's funding and services. More
importantly, we note how additional reductions of staffing and budgetary costs will impact future
service delivery. This new information was presented at the December 15th workshop in a
summary fashion. Hopefully this report adds some detail you may need, and the public should
know, in response to approving further Round 1 budget reductions.
Police:
The Police General Fund budget is the largest of any Department, if measured by staffing levels
and estimated budget appropriations ($20.2 million). To successfully provide our basic services,
the Police Department needs to maintain a base number of employees. Basic services begin with
our Officers who are on our Patrol Teams. The Officers on these Teams are responsible for the
field service that we provide 365 days a year, distributed into six beat assignments across San
Rafael. This includes Records Clerks and Dispatchers who answer the phones, help citizens at
our office, process the reports, and provide all the required legal statistical & paper
documentations.
Services include Evidence & Property clerks to receive, process, and document all of our
evidence. It includes a training unit that arranges, documents, and provides all of our state &
court required training to maintain our legal certification for our positions. It includes a small
number of Detectives to handle our very complicated & sensitive cases which also require a lot
of training and expertise (homicide, sexual assaults, child abuses, etc.). Finally, it includes a
small number of clerical staff to manage the Department's administrative tasks required to
support a 24 hour a day & 7 days a week operation. Proposed service reductions and staff
positions have taken into account officer beats, specialty assignments (Mental health, school
resource, patrol boat, etc.) as well as support service functions.
July 2009 Actions
Service Impacts — Police
January 4, 2010
Proposed Reductions
Additional Service Impacts
Eliminated Business Manager
Loss of `cover cars' or
Continuation of
Service reductions in prior
position; suspended one
staffing above the six beat
suspending four
column denoting slower
vacant dispatching and three
areas (minimum shift) to be
vacancies from FY
responses and overages
vacant officer positions for FY
regularly assigned;
2009-2010 (3 officers
continues into FY 2010-
2009-10 only; not fill one
community should expect
and one dispatcher)
2011
expected officer vacancy for
slower response time to all
into FY 2010-2011
six months
calls for service.
All non-violent crime
Loss of additional
Removal of coordinated
reports without a known
officer — pull back of
approach to dealing with
suspect only accepted
mental health
the homeless. Loss of
through the department's
program
coordination and problem
internet crime reporting
solving with other local
program or front counter
agencies; removal of our
report form. Limited officer
participation in a number of
response to private property
related boards and
non- injury accidents.
committees. Note: the
officer would remain with
the dept., but would not be
focused specifically on
mental health.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 6
July 2009 Actions
Service Impacts — Police
January 4, 2010
Additional Service Impacts
Inclusive of the dispatch
Vegetation management
Proposed Reductions
Continue to pay with
transition last March, the Fire
Reduced traffic enforcement
Loss of additional
Probationers not contacted
Department declined a net
throughout the city limits.
officer — elimination
regularly; monitoring shift
total of five positions. Three
Motor officers will be
of COPE program
to County Probation
were Fire Dispatching
reassigned to fill slots in the
participation
Department
functions; one Administrative
basic service beats on an as
Analyst position was
needed basis.
eliminated. Two additional
Slower response times to
staffing reductions occurred
incidents involving the
Reduction of
No safety issues; but
both at the administrative level
mentally ill. To maintain
Regulatory Officer
impacts to quality of life
basics beat services, a
services; permitting of
reassignment of one mental
massage and other
health officer must be made
businesses goes to State or
back to operations.
is reassigned; private
property graffiti complaints
Given all of the types of
handled by patrol officers
responses experienced each
as low priority call
day, lower priority is given
to non -injury, non -DUI
City sLaff to provide
responses to reduction in
accidents.
further reductions ofpatrol
Supportandandand Specialty
programs and services
January 6 2010 budget
meetin
Fire:
Due to the early retirement and layoffs in the Fire Department, a restructuring and reorganization
of duties, coupled with some new positions was approved. Other changes include paramedics
being redeployed in all fire stations (by intentionally reducing the number of higher cost Fire
Engineers), fire personnel taking on more ambulance transportation volumes, and cooperative
agreements between San Rafael and Larkspur to share Battalion Chief duties during emergencies.
Portions of the Fire Department budget are accounted for in other areas such as the EMS program
(supported by transportation billing and a special tax) and the Household Hazardous Waste
program. The General Fund portion is $14m for this current year.
July 2009 Actions
Service Impacts - Fire
January 4, 2010
Proposed Reductions
Additional Service Impacts
Inclusive of the dispatch
Vegetation management
Freeze Four
Continue to pay with
transition last March, the Fire
program will be reduced
Firefighter Positions
overtime — no service loss as
Department declined a net
from clearing 100 acres to
all stations function
total of five positions. Three
25 acres per year.
24/7/365
were Fire Dispatching
functions; one Administrative
Results of the restructuring
Analyst position was
and elimination of various
eliminated. Two additional
services is well under way.
staffing reductions occurred
The Matrix report, due
both at the administrative level
January 2010, will provide
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paee: 7
July 2009 Actions
Service Impacts — Fire
January 4, 2010
Proposed Reductions
Additional Service Impacts
(including an Administrative
options for two agencies to
Do not fill Training
Lack of coordinated training
Chief Officer position). Fire
enhance services, restructure
Officer
function for Fire and EMS
has planned to reconfigure a
cost sharing and hopefully
(both internal and external
Training Officer function with
do so with less overall $ for
impacts)
a qualified, certified instructor
Marinwood and the City.
who can provide required
Loss of traditional
Options to be developed by
course work to our staff and
Already, the ambulance
Marinwood CSD
both parties to eliminate
other agencies as well. This
billing improvement to date
funding
General Fund support and
function may manifest into
should add over $300,000 of
enhance services to both
another shared services
additional revenues per
communities.
opportunity.
annum to the Paramedic
Fund.
Public Works:
The areas of City service in the Public Works Department include Engineering, Facility Repair,
Fleet Vehicles, Parks Maintenance, Sewers Maintenance, Street Maintenance, Traffic Operations
and development impact analysis. Some are paid out of special funds, such as the Sewer
Maintenance operations being 100% reimbursed by the San Rafael Sanitation District. Most of
the other operations are expenditures of the General Fund.
The Engineering Division has two components. Civil Engineering is responsible for the design,
construction management and inspection of all City Capital Improvement Projects. Traffic
Engineering coordinates and directs the operation and maintenance of San Rafael's traffic signal
and street lighting system, collects and analyzes traffic model data, and reviews private/public
project development traffic impacts and formulates mitigation strategies.
The Park Maintenance personnel maintain City -owned parks, athletic fields and the Terra Linda
pool, as well as the landscaping at several facilities such as the Falkirk Cultural Center, the San
Rafael Public Library and City Hall. Also maintained are 3 community centers, 10 neighborhood
parks, and 10 mini parks totaling 149 acres. This Division also provides landscape maintenance
of City -owned roadway medians (24 acres), roadsides (16 acres), and thousands of trees.
The Street Maintenance Division is responsible for San Rafael's 176 miles of streets and 260
mile storm water system. Street Maintenance employees are responsible for asphalt repair,
replacing traffic signs and guard rails, temporary and permanent sidewalk hazard repairs, curb
and gutter repair and related tasks. Street Maintenance Division personnel sweep all city streets
with curbs and gutters with one mechanical sweeper. In the fall, the leaf vacuum machine is used
to supplement leaf pickup to avoid clogging the storm drain system. Street Maintenance
Division personnel maintain San Rafael's storm and flood control system, which consists of 101
miles of storm drain pipes, 12 pump stations, 29 pumps, and 6 generators. Employees inspect
and clean over 3,600 catch basins annually and maintain the City's system of drainage ditches
and channels.
By far, Public Works has seen the greatest staffing decline of any Department. The reduction of
13 positions heading into fiscal year 2009-10 reduced projected General Fund expenditures by
almost $1.4 million. Should Council approve the proposed elimination of 3 more positions (1
from Streets, 2 from Parks), the force will consist of 63 FTE's. Public Works employed 82
personnel as recently as fiscal year 2004-05.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 8
July 2009 Actions
Service Impacts —
January 4, 2010
Additional Service Impacts
Public Works
Proposed
Reductions
Engineering —
For all new commercial and residential
No additional
None
elimination of two
developments, require an additional five
changes in this
Engineering
working days to review and submit
Division at this
positions and the
conditions before the application goes to
time.
Public Works
the Planning Commission; for all work
Inspector position.
within public right-of-way by utility
companies or private property owners
(such as driveway approaches,
sidewalks, drainage, walls and fences),
requires additional three working days
to process the applications and issue an
encroachment permit.
Parks — reduction of
Parks crews will maintain our parks and
Loss of two
Work is focused with high
three positions
median landscape areas less frequently;
additional
priority toward safety and
weeds visible longer than we used to
positions
health needs linked to these
allow, debris will not be removed as
assets. Median trimming
quickly. PW no longer removing graffiti
only once a year (causing the
on private property; right of way and
trimming to be more severe).
public utility areas to be eradicated by
Limited emergency response
crews within 2-3 days of complaint
capabilities
being received
Streets five
Routine preventative and response based
Loss of two
Work is focused with high
positions are
services, such as painting red curbs,
additional
priority toward safety and
eliminated
crack sealing and filling potholes, will
positions; use
health needs linked to these
occur less frequently. Priority will be
of local
assets. Capital budget for
given to the most critical needs in order
Measure "A"
street projects reduced by at
to maintain high safety standards for
funds for
least $700k over two year
pedestrians, cyclists and motor vehicles.
operations
period — impacts longer term
pavement condition index
and street quality Limited
emergency response
capabilities
Administration —
Work with other agencies (TAM,
Various
Limited availability to handle
loss of two
SMART, etc), will be slowed.
reductions in
one time problems, address
management
Engineering Services is setting priorities
operating
citizen requests.
positions
for various projects, both within and
expenses in
outside our City borders. Grant seeking
multiple
City staff to provide
responses to street sweeping
opportunities will be scaled back
divisions
program services at the
significantly.
January 6. 2010 budget
meeting
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 9
Community Development:
Community Development has four primary programs: Current Planning, Long Range Planning,
Building and Fire Prevention and Code Enforcement. Long Range Planning is staffed by one
position, responsible for General Plan 2020 compliance and implementation, and entirely funded
by development related fees. Code Enforcement provides proactive efforts (hotel and apartment
inspection program) as well as enforcement of zoning and other code violations on a complaint
basis. Building and Fire Prevention are underway on the commercial life -safety inspection
program, as well as handling construction permit and plan checking. Community Development
staff has experienced declines in permit and planning applications, which they expect to continue
into next year. Recent fee updates are meeting or exceeding revenues goals (so far) and help
recovery costs for these services. Planning fees are —20% above expectations. Even with
increased revenues, planning applications do not fully fund all Planning activities. Fees are
likely to capture full cost recovery in the Building functions.
July 2009 Actions
Service Impacts —
January 4, 2010
Additional Service
CommunityDevelo ment
Proposed Reductions
Impacts
Loss of two staff positions
Slower or an inability to respond to
Reclassification of
Shift Code
in Code Enforcement.
Code Enforcement complaints about
Code Enforcement
Enforcement section
Eliminated one Planning
non -safety related issues such as
Manager to
management to
position and a part-time
illegal signs and banners, fences,
Supervisor;
Principal Planner.
Fire Inspector. Lastly,
trash or debris pickup and
funding was eliminated for
overgrown vegetation; Code
Eliminate .75 FTE
Less ability to assist
Planning interns which
Enforcement completing fewer
Administrative
other departments
assist with counter
health and safety code compliance
Position
and agencies; loss of
coverage, public hearing
inspections in apartments; Reduced
clerical assistance &
noticing and research.
public counter hours for Planning
slower pace of
Division; reduction to the level of
apartment
discretionary review by Planning
inspections.
staff*; fewer commercial fire
compliance inspections; turnaround
Use of technology
Eliminates portion of
time to review and issue building
funds to pay for staff
funding for AV
permits may be extended due to loss
support related to
modifications to City
of staffing in support divisions
permitting software
Council chambers
operations and
(* - by way of example — This is a work
oversight
in progress — intend to have ZO changes
City staff to provide
to PC/CC this winter; other options may
include no longer processing second
story additions to single family homes as
planning applications. Instead these
applications would move directly to the
building permitting stage once basic
code compliance is verified)
responses to
reduction in RBR
[resale inspection)
program and
planning services at
the January 6. 2010
budet meean
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 10
Library:
The Library Department oversees a variety of programming and services at both the Downtown
and Pickleweed locations. In addition, they serve as the administrator of the Literacy program,
which has a grant based $800,000 operation directed toward improving reading abilities for all
adult age groups across Marin. Our main Library operates at 48 hours a week, and has been in
this pattern since the last budget downturn of several years ago. The General Fund budget
proposed is around $2.3 million.
July 2009 Actions
Service Impacts —
January 4, 2010
Additional Service
Eliminated one
Library
Proposed
Reductions
Impacts
Staffing declines by 2.11 FTE
Library patrons will experience
None at this
Q2 staff to provide
responses to proposed
Cultural Center have dropped off
longer lines when checking out
time
service reductions and
dramatically. There is reduced
library books or waiting for
loss of Library hours at
public access to the mansion's
reference service
Reducing Aquatic Staff training,
the January 6. 2010
Transaction Based
Reimbursement (TBR) funds
Book purchases will be limited to
high -demand items; reference
delaying the opening of the
budget meetinr
to backfill additional cuts, up
book purchases curtailed by about
Terra Linda Pool a week and
to $100,000.
60 volumes per year; eliminated
closing the season two weeks
events.
up to 60 magazine subscriptions.
early
Community Services:
Community Services is defined in three separate ways. First, the Department operates and staffs
three separate community centers from which they provide programs, services and park and
recreation facility management. They serve as the caretaker and program provider of the Falkirk
Mansion and grounds. Lastly, and unique to San Rafael, Community Services operates preschool
and afterschool child care programs at nine school campuses, plus a facility in Albert Park.
Child care is self funded through fees (and small grants) paid by those who enroll children in
these programs. The centers and Falkirk offset many of there costs through rental rates and user
fees. An overall budget of about $6 million has a General Fund impact of only $1.44 million to
oversee the Department and keep the facilities open.
July 2009
Actions
Service Impacts —
Community Services
January 4, 2010
Proposed Reductions
Additional Service Impacts
Eliminated one
Art shows, public events and
Eliminate 1 vacant
Public will experience facility
mid-
holiday celebrations at Falkirk
administrative
closures — TLCC Monday
management
Cultural Center have dropped off
position; reduce part
nights; SRCC Friday nights
position at
dramatically. There is reduced
time help and
Falkirk
public access to the mansion's
operating expenses;
Reducing Aquatic Staff training,
grounds and galleries. Falkirk
realign staff hours
delaying the opening of the
will still be available for private
Terra Linda Pool a week and
rentals for weddings and other
closing the season two weeks
events.
early
Parks and Recreation Commission
By reassigning work shifts for
currently spearheading a survey of
several of the FTE employees
community desires and
we propose eliminating some
formulating strategies for greater
Seasonal and Part Time
volunteerism and fundraising
Em to ees that now provide
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paim 11
i
July 2009
Service Impacts —
January 4, 2010
Additional Service Impacts
Actions
Community Services
Proposed Reductions
services as evening and weekend
Facility Assistants in our three
community centers
City stajfto provide responses to
reduction in Youth/Family
programming and services at
Januar 6 2010 bud et meetin
Administration:
Administration is inclusive of the services provided by Information Technology, Human
Resources, City Clerk and City Attorney offices, Finance, Emergency Services and the City
manager's office. We are proposing a variety of operating expense and cost allocation
reductions. At this time, we are not proposing any staffing reductions. However, as noted on the
Round #1 Recommendation, we are reducing operating costs in several of these functions
BUDGET GAP RECOMMENDED SOLUTIONS:
The choices to solve our budget situation are extremely limited. Even after all the actions noted
above, the next choices involve reductions across many of our departments who provide
programs, responses and services to a wide segment of our community. I have worked closely
with the Department Directors to explore many decision options. You saw a taste of what would
occur in the line operations and administration at the workshop of December 15th. Given our
circumstances, and the true sense of urgency to resolve our current deficit, I am proposing this
first round of service reductions and position losses for 2009-10. Additionally, I ask that you
consider allowing us to build the 2010-2011 budget with similar reductions. The details of our
work are reflected on Exhibit E.
It is important to stress that the actions tonight are the beginning of complex and gut wrenching
options that must move to action in order to keep our General Fund budget in balance over the
coming years. I am recommending that you adopt the Resolution before you. Next we must
launch public outreach required prior to making obligatory budget balancing decisions over the
next month.
Summary Impacts
You have a fair amount of detail, and the availability of staff expertise, if you desire more
information or clarification as you consider these first round budget actions. As we have stated
all along, this is a partial solution to a problem that is with us through this next year (at least). To
help capture succinctly the budget work which remains, please take a look at the table below.
SAN RAFAEL CITY COUNCIL AGENDA REPORT I Page: 12
For each of the two fiscal years, we have identified the projected deficits. The first row of
solutions (Round 41) is what you are considering this evening. The Resolutions seeks a formal
amendment for the Exhibit E items relating to 2009-10, and concurrently asks for those items
related to 2010-11 be built into next year's General Fund budget. The second rows of solutions
were those services and positions provided on December 15th, for which we are not asking you to
act this evening. This data is illustrated to show if you desired to act on 100% of options
presented last month how this would further close the gaps.
At this juncture, the remaining gaps for each year can only be solved in one of two ways. The
first involved compensation concessions by labor groups and management. The City negotiating
team has been meeting with all of these groups, and is making progress in these conversations.
As we have stated, a 1% concession in compensation, across all employees paid from General
Fund resources, achieves annualized savings of about $250,000.
I am compelled at this juncture to paint a picture of what is next. Simply stated, if a gap remains
over two years totaling $1.294 million, we need to reduce the workforce by another 12-13
positions to solve this problem. This would necessitate layoffs. I would be recommending
elimination of services and implementing additional layoffs (sooner, not later) in Police,
Administration, Engineering, Public Works Maintenance, Community Services, the Library and
other functions supported by General Fund tax revenues. Absent compensation savings, we are
faced with no choice but to take services across many functions down to even lower levels. This
level of loss further reinforces the City will do less (not more with less).
Now, I'll offer some further context and perspective. Yes, these are painful budget and service
choices. Keep in mind we are focusing our efforts on having the budget in check over the next
18 months. There will come a time when the recession ends (and we see real increases in tax
revenues). I truly hope the worst of our problems are bottoming out in 2010, and signs of a
recovery make 2011 look better. Having Rafters released, a new bakery in downtown, and a
Target application approved over the next year offer longer term positive outlooks for our local
economic health. Northgate is a retail boos, and should continue to blossom as additional tenants
come to life through next spring. If employment picks up some steam, people will begin to spend
dollars on new card, home remodeling and consumer purchases.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 13
Over this next 1.5 years, events will occur (retirements, transfers, promotions, etc.) which offer
opportunities to alter budget options as we have noted (and the related services impacts). We are
still taking the Recession Action and Economic Vitality Plans seriously. Staffs are steadfast in
examining and implementing service changes that may involve restructuring, realignment, shared
services, etc. Life unfolds differently, no matter how well we plan and forecast. As the next
year and a half ticks away, we will look for continued ways to structure our services to maximize
efficiencies and effectiveness, while still trying to achieve cost savings.
I encourage you to act as appropriate, and know our staff is committed to carrying on the
tradition of providing high quality services to our community within our available resource
levels. The coming months offer a time of reshaping and redefining what we wish to do long
term. We should jointly work to define these service levels and agree to perform them with
excellence. Concurrently, we may need to reduce or shed what we can no longer due rather than
have our entire body of work sink into mediocrity.
Public Processes. Communication and Outreach
At your request on December 15th, you asked the staff to outline a series of steps to respond to
questions, educate the public, and involved our community in these difficult choices. On
December 21st, we proposed a timeline and public outreach process. The approved Timeline,
with your amendments, is provided as Attachment B. Subsequent to this meeting, the staff has
established public meeting dates, times and locations. We have also been developing our
notification processes and content. Staff plans to share more specifics interrelated to this timeline
when this report is presented and action considered on January 4th.
OPTIONS:
The City Council may choose to:
1. Approve the Mid Year Budget Amendment as presented
2. Amend the proposed Round #1 Recommendations, and approved the attached Resolution
with said amendments.
3. Take no action. Request staff to bring back information or other alternatives to solve the
budget deficits.
ACTION REQUIRED:
1. Adopt the Resolution as presented.
IMR:T ORI LTJvaON 9
WAManagement Services- WorkFile\Finance- WorkFile\Council Material\Staff Reports\2010\City\09-10 mid -year budget.doc
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAN RAFAEL ADOPTING AMENDMENTS
TO THE 2009-2010 BUDGET
WHEREAS, the City Council approved Resolution 12784 adopting the fiscal year
2009-2010 budget; and
WHEREAS, the continued economic downturn requires updates to some City
operations; and
WHEREAS, it is the intention of this Council to review recommendations from
staff regarding the City's financial condition, including revenue projections and available
resources and provide funding for various ongoing, capital and other service needs; and
WHEREAS, the City Manager has submitted to the City Council a report outlining
the additional budget items; and
WHEREAS, after examination, deliberation and due consideration, the City
Council has approved the same report and recommendations.
NOW, THEREFORE, BE IT RESOLVED, by the San Rafael City Council that
Resolution 12784 for fiscal year 2009-2010 is amended for administrative items and for
items presented at previous study sessions which adjust expenditures by $1,390,153 as
presented on EXHIBIT B of the staff report on file with the City Clerk and reduces
revenues by $2,093,352 as presented on EXHIBIT A of the staff report on file with the
City Clerk.
NOW, THEREFORE, BE IT FURTHER RESOLVED, by the San Rafael City
Council that Resolution 12784 for fiscal year 2009-2010 is further amended to adjust
expenditures by the City Managers recommended items detailed on EXHIBIT E for a
reduction of total expenditures of $1,872,000. Acceptance of all items recommended
by the City Manager will amend total expenditures to $81,658,263 as presented on
EXHIBIT B of the staff report on file with the City Clerk and to adjust total revenues to
$79,315,276 as presented on EXHIBIT A of the staff report on file with the City Clerk.
NOW, THEREFORE, BE IT FURTHER RESOLVED, by the San Rafael City
Council that fiscal year 2010-2011 will include adjustments to expenditures
recommended by the City Manager as detailed on EXHIBIT E for a reduction of total
expenditures of $2,670,800.
1, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular
meeting of the Council of said City on Monday, the 4th of January 2010, by the following
vote, to wit:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ESTHER C. BEIRNE, City Clerk
WAManagement Services- WorkFile\Finance- WorkFile\Council Material\Resolutions\2010\Amend City budget 09-10
mid yr.doc
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SAN RAFAEL
RECESSION ACTION PLAN
ACTIONS TAKEN MAY -DECEMBER 2009
Below is the third in a series of reports, defining progress on our Recesssion Action
Plan since its adoption in May 2009. As a reminder, the Principles for Budget
Recovery are included, along with a short summary of actions to date.
Principles for Budget Recovery
To meet our financial challenges, the City is taking steps that will keep our budget
balanced and in line with the City Council's goals and priorities. Budget actions will
also be guided by a series of long-standing financial management policies. The Council
has identified the following guidelines as we respond to the recession:
• Collaborate with neighboring governmental agencies to consolidate or regionalize
services to leverage resources and improve efficiency
• Reduce services, where necessary, after identifying the impacts and weighing the
reduction against other options
• Reject new services or projects if reduced staffing levels cannot manage the
workload
•Continually assess and improve efficiency in the delivery of services
•Manage the size and compensation of the workforce to best deliver services given
our current and anticipated financial realities
• Provide a responsible level of transition assistance to city employees who have
lost their jobs
• Seek additional revenues from all sources to meet the community's expectations
of a high level of service
• Implementing an Economic Vitality Plan Commenced implementation of Economic Vitality
focusing on local business retention, Plan (see separate report)
expansion and attraction as well as job
development
• Pursuing Federal Stimulus actions and
other grants that can provide one time
resources for projects and service needs
Secured $2 million to date in Federal Stimulus
grants for one time resources for street
resurfacing, energy efficiency, Police Citizens
Academy and other Police activities. Applied for
fire station renovation grant. Pursuing additional
stimulus funds. Possible second round of street
funding coming in 1' half of 2010.
Recession Action Plan — December 2009 Progress Report Page 2
Continuing to suspend hiring of
Suspended hiring and then permanently
positions whenever possible
eliminated 14 vacant positions over the FY 2008-
09 fiscal year saving $1.3 million annually. For
FY 2009-2010 have also held several positions
vacant since budget adoption in July.
Offering early retirement packages
For FY 2009-2010, created Voluntary Retirement
through incentives
Separation Program, resulting in 9 early
retirements, saving approximately $900,000
annually through permanent elimination of these
positions.
Offering employees the opportunity to
Several employees have requested time off
voluntarily reduce their work hours
without pay, which will result in approximately
$20,000 in one time savings.
Reducing the workforce by laying off
Implemented layoffs in June 2009 of 6
employees through strategic planning
classifications resulting in $737,500 in annual
savings; provided transition assistance to those
who lost their jobs
Working with employees to develop a
Furlough implemented for Fiscal Year 2009-10.
furlough plan that includes a pay
Includes 5% salary reduction for non -safety
reduction and time off by closing City
employees, saving approximately $500,000 for
Hall and other non-public safety facilities
this one fiscal year.
on certain days
• Meeting with employee unions to
Contract negotiations completed. Deferred
control costs by analyzing compensation
existing salary increases, resulting in one time
levels, including possible reductions in
savings of $400,000 spread over a two year
salaries or benefits
period. No new salary increases were
negotiated. Other cost savings that were
negotiated included furloughs and changes to
health and retiree health benefits.
Considering alternative work schedules
Staff has investigated alternative work schedules
in order to save costs
in place in other agencies and will prepare
recommendations for future Council
consideration.
• Maximizing opportunities to recover
City reviewed and set fee schedule for cost
costs, such as changes in our paramedic
recovery in early 2009; new building and planning
transport service
fees took effect 7/11/2009; change in ambulance
transportation away from private sector and back
to City paramedics will increase revenues by over
$300,000 per annum.
Recession Action Plan — December 2009 Progress Report
• Continuing to explore collaboration
opportunities with other public agencies
to maximize efficiency
Other Actions to Reduce Expenditures
Page 3
Implemented OES and Fire Battalion Chief
services agreements with City of Larkspur,
resulting in cost sharing; Contracted out Fire
Dispatching with the County's Communication
Center Dispatch saving $225,000 annually;
Working with Marinwood CSD to determine if fire
operations can be restructured to improve
service and save expenses for both entities.
Deferred contribution to vehicle fleet
replacement fund which saved $754,000 for
FY09/10.
Reorganized Information Technology and
Engineering Divisions, saving over $200,000
per year.
Schedule of Next Steps on Budget
Timeline, Outreach and Process
Approved December 21, 2009
December 16th through January. Staff
developing responses to questions raised from Budget Study Session
Attachment B
2. Dec 21't- Present Timeline; get City Council acceptance of process, dates, outreach, etc.
City Council provided input and approved Timeline Plan as amended
3. Jan 4th. —
a. Initial progress report on meetings with Bargaining Units and Management
concerning compensation reductions
b. City Council to approve "Initial Actions" to close deficits — identify remaining
gap, provide staff report and formal resolution
4. January 6th -3-6 p.m. City Council Chambers - Afternoon session (2-3 hours) with City
Council and public to respond to questions about service impacts to budget options held
over from December 15th workshop
January 12th — 6-9 p.m. (TLCC) and January 14th 6 — 9 p.m. (SRCC)—
a. Two evening City Council sponsored public outreach meetings on budget options,
possible service losses, to solicit community input. City staff to develop
`invitation' to meeting, explaining situation, and extending invite to residents and
business via different media outlets.
b. Offer a "pre meeting primer" on public finance and background information on
actions taken to date (details to be determined)
6. Jan 19'
a. Updated progress report on meetings with Bargaining Units and Management
concerning compensation reductions; determination of savings to close remaining
deficits
b. City Council to consider "Remaining Actions" to close deficits — identify
remaining gap, provide staff report and formal resolution.
c. Possible additional budget action also could occur on February 1, 2010 based
upon results of public meetings in previous weeks and City Council direction.
7. Late January: Possible Council retreat on policy matters and other issues
a. Include progress report on two year objectives and work accomplished to date
8. February —June 2010: Additional public input on city service reductions and priorities
and the FY 10/11 budget. Longer term service and policy issues continue to be
developed, deliberated and decided prior to formal action in June on FY 2010-2011
budget.
W:\City Managers- WorkFile\Meetings\Council Retreats\12-15-09\fy 09-10 approved mid year budget timeline and process.doc