City of Alameda Budget Study Session April 18, 2013

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Budget Presentation Outline
 Two Year Budget Process for FY13-14 and FY14-15  All Fund and General Fund Budget Overview  General Fund Budget: Revenue / Expenditure Projections  Options for Addressing Projected Budget Deficits  Other Budget Highlights  Budget Challenge  Council Direction on Proposed Budget  EOC Update

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Budget Study Session – April 18, 2013

Why A Two Year Budget ?
 Time savings realized during two year period  Requires more conservative revenue and expense
projections

 Improve funding certainty for departments,
employees and programs

 Limits the “use it or lose it” syndrome  Allows the focus to be more on policy versus
balancing the budget

 Results in improved long range strategic planning
and departmental accountability

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Budget Study Session – April 18, 2013

Preliminary Proposed Expenditure Budget by Fund FY13-14 (in Millions)
(Based upon FY13-14 forecast of $153 Million)

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Budget Study Session – April 18, 2013

General Fund Budget Overview Closeout of FY12-13
FY12-13 projected to end with a structurally balanced budget (in millions):

Budget Revenues $ 71.0 Expenditures 72.2 Net Change $ (1.2)

Estimated $ % Actual Change Change $ 72.1 $ 1.1 2% 71.3 0.9 1% $ 0.8 $ 2.0

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Budget Study Session – April 18, 2013

General Fund Budget Overview (continued)
 March 2013 – Mid-Year Report Presented to Council: • Initial forecast deficit of $2.3 million for FY13-14
and $4.0 million for FY14-15

• Initial projected ending available fund balance of
$17.0 million (23% of budget) for FY13-14 and $13.0 million (17% of budget) for FY14-15 absent corrective actions

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Budget Study Session – April 18, 2013

General Fund Budget Overview
(continued)
April 2013 – Staff prepared initial budget estimates for FY13-14 through FY17-18:

• Projects deficits of $2.7 to $7.4 million annually thru
FY17-18

• Assumes revenue growth of 1-3% annually depending
on the source

• Incorporates new and projected Miscellaneous / Safety
PERS rates, including additional employee contributions for PERS and health

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Budget Study Session – April 18, 2013

General Fund Budget Overview
(continued)

•Assumes health and OPEB increases of 6-12% per year,
(incorporating some cost sharing provisions of MOUs);

•Incorporates other provisions of new MOU agreements,
including salary increases based upon the increase in BRI (minimum of 1.5% for 2014, 2% for 2015 and 2016)

•Assumes 2.5% increases for all non-personnel expenses
resulting from inflation beginning in FY15-16.

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Budget Study Session – April 18, 2013

General Fund Budget Overview
(continued)
5 Year Projections for FY13-14 through 17-18 (in millions) Without proposed changes
13-14 14-15 15-16 16-17 17-18

Revenues Expenses Deficit For Year

$72.9 $74.1 $75.2 $ 76.5 $ 77.9 75.6 78.5 81.0 83.0 85.3 $ (2.7) $ (4.4) $ (5.8) $ (6.5) $ (7.4)

Ending Available Fund Balance $18.6 $14.2 $ 8.4 $ 1.8 $ (5.6) % of Expenses 25% 18% 10% 2% -7%

Ending Available Fund Balance assumes no cost-saving measures are taken.

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Budget Study Session – April 18, 2013

General Fund Budget Revenue and Expense Trends
($ in millions)

$90 $85 $80 $75 $70 $65

Revenues

Expenses

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Budget Study Session – April 18, 2013

General Fund Budget
Major Revenue Sources - $73 Million FY13-14

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Budget Study Session – April 18, 2013

General Fund Revenues 5-Year Plan Annual Assumptions
     

Property Tax – 2.2% annually through 17-18 Sales Tax – 6% 13-14, 4% 14-15, 3% thereafter Utility Users Tax – Flat thru 14-15, 1% thru 17-18 Franchise Taxes – Drop 13-14, 0-1% thru 17-18 Other Taxes – 1-2% through 17-18 Departmental Revenues – 1% thru 17-18

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Budget Study Session – April 18, 2013

General Fund Budget Total Revenue Trend
($ in millions)

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Budget Study Session – April 18, 2013

General Fund Budget Property Tax Revenue Trend ($ in millions)
$25 $22 $21 $20 $19 $23 $22 $22 $22 $23 $23 $24

$15

$10

$5

$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Budget Study Session – April 18, 2013

General Fund Budget Major Expenditure Categories FY13-14
Fire
5% 12% 32% 15%

Police Administration Recreation / Public Works (GF) Transfers Out

36%

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Budget Study Session – April 18, 2013

General Fund Budget Major Expenditure Categories

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Budget Study Session – April 18, 2013

Miscellaneous Employees PERS Rates Total Contributions (Employer & Employee)

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Budget Study Session – April 18, 2013

Safety Employees PERS Rates Total Contributions (Employer & Employee)

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Summary of Proposed Reductions/Revenue Offsets
Department Category Administration Police Fire Central Services Library Recreation General Fund Capital Projects Parking Meter Rates One Time Revenues Total 2013-14 $ 829,000 245,000 180,000 49,000 125,000 112,000 2014-15 $ 860,000 245,000 180,000 49,000 91,000 112,000

460,000 1,491,000 375,000 375,000 300,000 $ 2,675,000 $ 3,403,000

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

A. Administration: $829K FY13-14, $860K FY14-15

 Restructure/Reduction of the following departments
 City Manager / Information Services ($379K / $409K)  Human Resources ($202K each year)  Finance ($15K each year)

 City Clerk ($88K / $89K)
 Reallocate Cable Television Administration program to
Cable Internal Service Fund

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

A. Administration (continued)

 Human Resources ($30K each year)  Reduce other operational costs ($30K each year)  Finance ($115K each year)  Increase Business License processing fee by $5  Increase penalties for delinquent business licenses  Reduce other operational costs

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

B. Police: $245K

 Represents initial estimate for a proposed increase in
parking citations, to be presented to Council in May 2013

 Police was also able to reduce their base budget by
$200K annually through reduced booking fees assessed by the County

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

C. Fire: $180K

 Reduce purchases of equipment, materials and supplies  Reduce overtime budget  Increase in Fire Prevention Services revenue

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

D. Recreation and Parks: $112K

 Reductions in the following:
 Hardball Field (College of Alameda) ($6,500)  Swim Center Facility Maintenance ($43,500)  Part time Staffing & Contractual Services ($62,000)

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

E. Library: $216K over two years

 Change closing time on Thursday from 6 pm to 5 pm, to
align with operating hours on Friday and Saturday ($8K annually)

 Use remaining Measure O bond funds instead of
General Fund contributions to fund capital outlay for library for both years ($200K over two years)

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

F. Public Works: $49K

 Represents an increase in the billing rates for fleet
maintenance services to Alameda Municipal Power and Alameda Unified School District

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

G. General Fund Capital Projects ($460K in 13-14, $1.491 million in 14-15)

 Reductions in Building Maintenance Renovations
funded annually by the General Fund from $860K to $400K

 For FY14-15, reallocate remaining General Fund capital
contributions as follows:  $200K from Capital Project Fund reserves (one-time)  $831K from Facility Maintenance Internal Service Fund (on-going)

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Proposed Changes
(continued)

H. Proposed Increase for Parking Meter Rates to Regional Standard

 Represents initial estimate for proposed increase
(estimated to generate $375K annually) to be presented to Council in May 2013

 Increase meter rates from  $1.00 to $1.50 per hour on Park Street  $.50 to $1.00 on Webster Street

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Budget Study Session – April 18, 2013

Closing the Gap for FY13-14 and 14-15: Use of One-Time Funds
 Receive repayment of funds due from Bayport
Assessment District for prior years for public safety services ($300K FY13-14 only), $45K annually in future years

 Use of carryover of projected budget savings
FY12-13 ($1 million FY14-15)
 Police ($634K due to vacancies)  Fire ($275K due to overtime savings)  Facilities Maintenance ($142K due to vacancies)
Budget Study Session – April 18, 2013

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5 Year Projections FY13-14 to 17-18 (in Millions) with Proposed Changes

13-14

14-15

15-16

16-17

17-18

Revenues Expenses Budget Carryover from FY12-13 Proposed Changes Deficit For Year Ending Available Fund Balance % of Expenses

$72.9 75.6 2.7 $ -

$74.1 78.5 1.0 3.4 $ -

$75.2 81.0

$ 76.5 83.0

$ 77.9 85.3

2.7 2.7 2.7 $ (3.1) $ (3.8) $ (4.7)

$19.6 $18.6 $15.5 $ 11.7 $ 7.0 26% 24% 19% 14% 8%

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Budget Study Session – April 18, 2013

Other Cost Savings Measures / Revenue Enhancements
 Proposed Elimination of Cost of Living Adjustments
for Non Personnel items for FY14-15 and 15-16

 Parking Garage  Voluntary Layoff Program

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Budget Study Session – April 18, 2013

Other Budget Considerations
 Advance of future years’ PILOT from AMP ($1.2
million 13-14, $1.4 million 14-15)

 Expiring SAFER Grant funding for firefighters (2014)  Update on Redevelopment/Successor Agency  Proposed Reorganization of ARRA  Proposed EOC ($2 Million) – Funding Sources
   
General Fund Reserves Partial Payment from Community Development Fee Loans from CDF / Facility Maintenance Funds Grants / Other Sources

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Budget Study Session – April 18, 2013

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Budget Study Session – April 18, 2013

Budget Good News

FY12-13 is projected to be structurally balanced Maintains and exceeds City Council’s 20% reserve policy for two years No significant decrease in direct services to the community

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Budget Study Session – April 18, 2013

Council Direction on Proposed Budget

 Proposed expenditure reductions  Proposed changes to revenues  One-time items and use of budget
carryover from FY12-13

 Other Cost Savings/Revenue
Enhancements

 Other Budget Considerations
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Budget Study Session – April 18, 2013

Next Steps
May 28, 2013 2nd Council budget workshop and possible adoption

June 12, 2013 Council budget adoption if needed

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Budget Study Session – April 18, 2013

Questions?

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Budget Study Session – April 18, 2013

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