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Claremont
City
Council
Agenda
Report
TOCITY
COUNCL
FROM
JEFFREY
C
PARKER
DATE
JANUARY
31
2009
SUBJECTFISCAL
YEAR
2008
2010
BUDGETREPORT
SUMMARY
Due
to
the
current
nationaleconomc
situationthe
City
of
Caremont
is
experiencing
a
reduction
in
revenues
below
projections
made
during
the
budget
process
in
the
spring
of
2008
At
this
point
staff
is
estimating
the
City
will
have
a
1
5
mllion
dollar
shortfall
at
theend
of
fiscal
year200809
and
a
2
mllion
dollarshortfall
at
the
end
of
FY
2009
10
unless
the
City
acts
now
to
reduce
expendituresaccordingly
This
report
detailsthe
proposedoperational
changes
tocorrect
the
FY
2008
09
budget
shortfall
and
outlinesthe
current
status
and
remaining
gap
for
FY
2009
10
Staff
Recommendation
Staff
recommends
that
the
City
Council
1
Approve
the
presented
plan
to
balancethe
2008
09
budget
and
appropriate
the
1
011
000
in
onetime
unanticipated
revenue
Attachment
A
2
Receive
and
file
the
CityManager
s
draft
2009
10
budget
plan
whichincludes
operational
reductions
benefit
reductions
and
organizationalchanges
Attachment
B
3
Direct
the
CityManager
to
bring
back
the
final2009
10
budget
plan
to
the
City
Council
on
February
24
2009
ANAL
YSIS
c
The
City
of
Caremont
is
feeling
the
impacts
of
the
current
economc
situation
across
the
country
and
the
world
While
the
City
has
been
fortunateto
not
suffer
as
severely
from
the
foreclosure
crisis
as
some
of
our
neighbors
nevertheless
Caremont
s
other
key
revenuesourcesare
down
Automobile
and
other
sales
are
down
Transient
Occupancy
Tax
paid
by
visitors
staying
at
our
hotels
are
down
and
development
has
all
but
stopped
0809
Shortfall
1
170000
TaxFOR
CTY
COUNCILAGENDA
ITEM
 
City
Council
January
31
2009
Page
2
of4
Staff
anticipates
these
revenues
will
remain
down
in
simlar
amounts
next
fiscal
year
09
10
with
theaddition
of
a
25
increase
in
operating
costs
due
to
normal
escalations
in
contracts
and
employee
benefits
0910
Shortfall
1
220
000
80
000100000
20
000
80
000
Revenue
TVDe
Sales
Tax
Transient
Occupancy
Tax
Hotel
Tax
Buildinq
PermtFees
Development
Fees
Plan
Check
Fees
The
combination
of
these
reductions
in
revenue
and
an
estimated
500
000
increase
in
operational
costs
come
together
to
produce
Caremont
s
current
1
5M
budget
shortfall
in
FY
2008
09
and
a
2M
shortfall
for
FY
2009
10
2008
09
At
this
time
staff
anticipates
a
revenue
shortfall
of
1
5
million
for
FY
2008
09
In
order
to
maintain
a
balanced
budget
for
FY
2008
09
Attachment
A
presents
the
staff
recommended
solution
for
theshortfall
The
first
section
of
thetable
outlines
onetime
unanticipated
revenue
the
City
received
from
grants
thestate
and
operationalchanges
that
have
occurred
since
the
completion
of
the
budget
The
secondsection
showsthe
vacancies
and
associated
savings
in
leaving
current
vacancies
unfilled
through
theremainder
of
thefiscal
year
Thefinalsectionshowsthe
operational
reductions
from
City
departments
as
well
as
categorical
cuts
for
items
such
as
training
travel
and
equipment
Through
the
implementation
of
these
adjustments
the
1
5M
budget
shortfall
can
be
resolved
2009
10
Due
to
the
same
economc
issuesthat
are
present
in
FY
2008
09
including
reduced
revenue
as
well
as
increasing
costs
the
2009
10
anticipated
shortfall
is
2M
Staff
has
determned
it
is
not
possible
tomeet
this
shortfall
with
operational
reductions
alone
Personnel
costs
will
also
need
tobe
reduced
through
some
combination
of
reductions
in
benefits
and
the
number
of
budgetedpositions
 
City
Council
January
31
2009
Page
3
of4
The
firstthree
sections
of
Attachment
B
are
simlar
to
Attachment
A
with
some
additional
reductions
achieved
by
having
a
full
year
of
coststo
reduce
Additionally
there
is
118
000
from
the
General
Fund
Reserves
to
fully
resolve
the
shortfall
Over
the
last
three
weeks
theAssistant
CityManager
and
negotiating
team
have
been
meeting
with
the
six
employee
associations
to
brief
them
on
the
budget
situation
and
provide
them
with
options
on
how
to
help
reducethe
budgetbeyond
the
operational
cuts
already
made
by
the
CityManager
The
fourth
section
shows
the
benefit
reduction
recommendations
for
each
of
the
employee
groupsbased
on
their
responses
to
the
CityManager
s
request
to
reducebenefit
costsThesereductions
have
not
yet
been
agreed
to
by
the
employee
associations
The
negotiating
team
will
be
meeting
with
thevarious
groups
over
the
coming
weeksto
get
final
concurrenceon
the
proposed
reductionsThe
fifth
section
shows
the
groups
whose
percentage
of
the
cut
will
need
to
be
achieved
through
organizationalchanges
The
CityManager
will
be
meeting
with
Department
Heads
to
decidewhat
organizationalchanges
will
be
necessary
to
reach
the
required
dollar
amount
from
eachgroup
Once
the
negotiating
team
and
theassociations
have
come
to
tentative
agreements
on
the
benefit
reductionsthese
benefit
reductions
will
come
to
the
City
Council
for
approval
After
the
benefit
reductions
are
finalized
by
council
the
CityManager
will
inform
the
council
of
the
organizationalchanges
that
will
be
needed
to
resolve
the
shortfall
PUBLIC
NOTICEPROCESSThis
item
has
beennoticed
through
the
regular
agenda
notification
process
Copies
are
available
at
the
City
Hall
public
counter
the
Youth
Activity
Center
theAlexander
Hughes
Community
Center
the
City
website
and
the
Caremont
Public
Library
ALTERNATIVES
TO
STAFFRECOMMENDATION
In
addition
to
the
staffrecommendation
there
are
the
following
alternatives
1
Request
further
information
from
staff
2
Take
no
action
of 00

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