1 31 09 City Budget Report

City Council Agenda Report

Claremont

TO

CITY COUNCIL

FROM

JEFFREY C PARKER

DATE

JANUARY 31 2009

SUBJECT

FISCAL YEAR 2008 2010 BUDGET REPORT

SUMMARY

City of Claremont is experiencing a during the budget process in the spring of

Due to the current national economic situation reduction in 2008 At this

revenues

point

projections made estimating the City will have

below

staff is

the

a

1 5 million dollar shortfall at the

end of fiscal year 2008 09 and a 2 million dollar shortfall at the end of FY 2009 10 unless This report details the proposed the City acts now to reduce expenditures accordingly operational changes to correct the FY 2008 09 budget shortfall and outlines the current status and

remaining gap

for FY 2009 10

Staff Recommendation Staff recommends that the

1

Approve

presented plan to balance the 2008 09 budget in onetime unanticipated revenue Attachment A

the

1 011 000

2

Council

City

Receive and

file the

City Manager

reductions

operational

benefit

s

draft

2009 10

reductions

and

appropriate

the

budget plan which includes organizational changes

and

Attachment B 3

Direct the Council

on

City Manager to bring back February 24 2009

the final 2009 10

budget plan

to the

City

ANALYSIS c

feeling the impacts of the current economic situation across the country and the world While the City has been fortunate to not suffer as severely from the foreclosure crisis as some of our neighbors nevertheless Claremont s other key revenue sources are 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 The

City

of Claremont is

08 09 Shortfall 1 170 000 Tax

FOR CITY COUNCIL AGENDA

ITEM

City Council January 31 2009 Page 2 of4

Staff 10

anticipates

these

revenues

with the addition of

contracts and

a

2 5

will remain down in similar amounts next fiscal year 09 increase in operating costs due to normal escalations in

employee benefits 09 10 Shortfall

Revenue TVDe

1 220 000 80 000

Sales Tax Transient

Occupancy

Tax

Hotel Tax 100 000

Development Fees

80 000

Plan Check Fees

The combination of these reductions in

operational

costs

come

in FY 2008 09 and

a

Buildinq Permit Fees

20 000

revenue

and

an

together to produce Claremont s

estimated 1 5M

current

500 000 increase in

budget shortfall

2M shortfall for FY 2009 10

2008 09 At this time

maintain

a

staff

anticipates a revenue shortfall of 1 5 million for FY 2008 09 In order to budget for FY 2008 09 Attachment A presents the staff recommended

balanced

solution for the shortfall The first section of the table outlines onetime unanticipated revenue the City received from grants the state and operational changes that have occurred since the completion

of the

budget

The second section shows the vacancies and associated

vacancies unfilled

through

savings in leaving

The final section shows the operational reductions from City departments categorical cuts for items such as training travel and equipment

Through

the

current

the remainder of the fiscal year

implementation of these adjustments the

1 5M

as

budget shortfall

well

as

can

be

resolved 2009 10 Due to the

same

revenue as

well

economic issues that

as

increasing

costs

are

present

the 2009 10

in

FY 2008 09

including reduced

shortfall is

2M Staff has anticipated determined it is not possible to meet this shortfall with operational reductions alone Personnel costs will also need to be reduced through some combination of reductions in benefits and the number of budgeted positions

City Council January 31 2009 Page 3 of4

The first three sections of Attachment B are similar to Attachment A with some additional reductions achieved by having a full year of costs to reduce Additionally there is 118 000 from the General Fund Reserves to fully resolve the shortfall Over the last three weeks

the Assistant

City Manager and associations to brief them

with the six

meeting employee provide them with options on how already made by the City Manager The fourth

benefit

reduce the

reduction recommendations for each of the their responses to the City Manager s request to reduce These reductions have not yet been agreed to by the employee

costs

associations

coming

help

section shows the benefit

groups based

employee

to

negotiating team have been the budget situation and budget beyond the operational cuts on

The

weeks to

on

negotiating

get final

team will be

concurrence on

meeting with the various groups the proposed reductions

over

the

The fifth section shows the groups whose

percentage of the cut will need to be through organizational changes The City Manager will be meeting with Department Heads to decide what organizational changes will be necessary to reach the required dollar amount from each group achieved

Once the

negotiating team and the associations have come to tentative agreements on the benefit reductions these benefit reductions will come to the City Council for approval After the benefit reductions are finalized by council the City Manager will inform the council of the organizational changes that will be needed to resolve the shortfall PUBLIC NOTICE PROCESS

This item has been noticed

through the regular agenda notification process Copies are public counter the Youth Activity Center the Alexander Hughes Community Center the City website and the Claremont Public Library available at the

City

Hall

ALTERNATIVES TO STAFF RECOMMENDATION In addition to the staff recommendation there 1

Request further information from

2

Take

no

action

staff

are

the

following alternatives

City Council January 31 2009 Page 4 of4

Submitted

by

Prepared by

P

ffi

v

Jeffrey C Parker City Manager

Assistant

Prepared by

Prepared by

Tony

Ramos

City Manager

f

M

Adam Pirrie

Colin Tudor

Finance

Assistant to the

V

Manager

CTudor COUNCIL AGENDA STAFF REPORTS Budget Report 1 31 09 doc

Attachments Attachment A FY 2008 09

Budget Plan Budget Plan

Attachment B FY 2009 10 Draft

City Manager

Attachment A

City of Claremont Budget Plan

FY 2008 09

2008 09 Shortfall 1 500 000 Contribution from the General Fund Reserve Contribution of funds

resulting

from the

receipt

of

unanticipated

one

time General Fund

revenues

Prop

172

Funds were not included in the

anticipated which they Public Works Permits

budget

it was

as

the state would take these funds did not

300 000

Revenues have exceeded

budgeted

amounts

by

this amount YTD Y

FSC Lease

The lease

agreement budget

included in the

being Park

Ranger

Grant

Not

27 000 with Tri

offset

not

due to the

reached after the

budgeted

City agreement conclusion of the budget was

general

fund cost for

ranger program

Grading

Plan Check

Revenues will exceed

46 000

budgeted

amounts

by

this

budgeted

amounts

by

this

amount YTD Street Rehab Fees

Revenues will exceed

Not the

Padua Hills Theatre Fund

317 000

budgeted these are current payments from state Fingerprinting and domestic violence

Anticipated fund balance in PHT Fund after Pergola project and transfer of Theatre to developer

Shortfall

Remaining

8 000

250 000

489 000

Vacancies

Savings

Receptionist Maintenance

H S

38 000

Craftsperson

II

Senior Maintenance Assistant Maintenance Assistant Park

Ranger PT C Park Ranger PT C Planning Intern CD

C S PT

None C S

17 000

PT C S

14 000

S

14 000

S

14 000 12 000

Vacancies Subtotal

Remaining

1 011 000

10 000

amount YTD S890 State mandated Claims

53 000

park

109 000

Shortfall

380 000

Page

1

of 3

Attachment A

Operational

City of Claremont Budget Plan

FY 2008 09

Reductions

Savings

Administrative Services Operating Budget

Savings

can

be identified in the

following

accounts

Program Supplies

Legislative Activity

Reduction in

Information

eliminates

time

Community budgeted one

Reduction in

funding

budget City wide mailing

for Council

legislative trips

BudQet

SavinQs

10 400

6 500

RemaininQ 2 013

6 500

3 500

3 000

200 000

42 000

158 000

and conferences

Contingency

The

City Manager maintains a contingency fund prepared for unanticipated costs throughout the year Reduction of this fund may require staff to request funding from the Council for unanticipated costs in order to be

Advertising

Due to the

hiring

freeze non essential

there is a reduced need for Personnel Exams

Due to the

hiring

positions advertising jobs

freeze non essential

positions

75 000

23 500

12 000

3 985

425 23

11 000

5 544

there is a reduced need for new hire exams

Community Development Operating Budget

Savings

can

be identified in the

following

accounts Nuisance Abatement

Based on year to date actuals

it is

anticipated

BudQet

SavinQs

RemaininQ

43 900

22 000

17 614

362 045

58 000

70 054

BudQet

SavinQs

33 550

4 000

6 713

34 000

54 710

sufficient funds remain to meet the need Contract Services

Community

Services

Program Supplies

Operating Budget

Delays the transfer of plans to electronic format project planning has been working on Any large unanticipated projects will need to be funded by Council appropriation Savings can be identified in the following accounts Reduction in Claremont Hills Wilderness Park tours and reduces

Contract Services

ability

to

80 000

RemaininQ

replace signage

Reduces several contract maintenance services

885 951

including painting pressure washing park repairs Thompson Creek trail plant servicelrental

and reduction in sport field

maintenance Individual accounts retain sufficient

Water

Reduces the

funding

frequency

being

51 000

reduced

for essential service

of

park watering

times to twice a week

Page

2 of 3

from 3

198 112

13 000

104 231

Attachment A

Operational

City of Claremont Budget Plan

Reductions

Human Services

Savings

Operating Budget

Savings

can

be identified in the

following

accounts

BudQet

Savinas

40 285

8 000

14 735

16 500

16 500

0

18 200

7 500

6 906

proposed savings is the amount historically remaining in budget at the end of the FY

36 000

11 000

22 073

expenditure category is budgeted to cover the cost of travel to and from City operations All funds have been consolidated and any training requires the approval of the City Manager s Office

137 526

40 000

33 430

Program Supplies

Reduction in Y AC and TAC program

Contract Services

Eliminates the

Psychological Equipment

Maintenance

Scholarships Grants

Meetings

Travel

supplies

of La Verne

University counseling

services

Janitorial cost for Y

responsibility Youth

FY 2008 09

of Tri

FSC

RemaininQ

program

which is now the

The

This

events and conferences relevant to travel and

Training The City budgets funds for the development of employees through their participation in training opportunities specific to their job classifications as well as to general training to improve their knowledge and efficiency in delivering service to residents All funds have been consolidated and any travel and training requires the approval of the City Manager s Office Equipment The City budgets for the purchase of equipment to replace pieces that are obsolete or broken increases the replacement timeline for various pieces of equipment No funds remain Miscellaneous

expenditures EDAC

Reduces the

ability

of the

departments

to absorb

43 000

City

unanticipated necessary

40 000

68 720

27 000

21 295 27 000

25 950

24 164

0 21 000

13 000

13 000

0 13 000

No funds remain

EDAC

provides funding for employee development and training Budgets for both general training programs totals 56 000 24 000 EDAC 32 000 EDAC Training EDAC will continue to coordinate events for staff all costs will be cover by participant fees Employee recognition events will be scaled back Training will continue with smaller workshops Leadership Academy will not be held

56 000

30 000

15 576

EDAC and EDAC

Operational Reductions Remaining

Subtotal

30 000

380 000

Shortfall

o

Page 3 of

3

Attachment B

City of Claremont Draft Budget Plan

FY 2009 10

2009 10 Shortfall 2 000 000 Contribution from the General Fund Reserve Contribution of funds Y

resulting

from the

receipt

FSC Lease

of

unanticipated

one

time General Fund revenues

The lease agreement with Tri included in the

being

budget

City was not

79 000

due to the agreement

reached after the conclusion of the

197 000

budget

process Contribution from the General Fund Reserve

118 000

Shortfall

Remaining

1 803 000

Vacancies

Savings

Receptionist Maintenance

H S

51 000

Craftsperson

II

C S

Senior Maintenance Assistant Maintenance Assistant Park

Ranger PT C Park Ranger PT C Intern C D Planning

PT

None C S

21 000

PT C S

15 000

S

15 000

S

15 000 12 000

Vacancies Subtotal

129 000

Shortfall

1 674 000

Remaining

Page

1 of 4

Attachment 8

Operational

City of Claremont Draft Budget Plan

FY 2009 10

Reductions

Administrative Services

Savings Operating Budget

Savings

can

be identified in the

following

accounts

Budaet

Program Supplies

Legislative Activity

Savinas

Remainina

400 10

6 500

3 900

legislative trips

6 500

3 500

3 000

City Manager maintains a contingency fund prepared for unanticipated cost throughout the year Reduction of this fund may require staff to request funding from the Council for unanticipated costs

160 000

70 300

89 700

23 500

12 000

11 500

425 23

11 000

425 12

Reduction in

Information

eliminates

time

Community budgeted one

Reduction in

funding

budget City wide mailing

for Council

and conferences

Contingency

The

in order to be

Advertising

Due to the

hiring

freeze

essential positions advertising jobs

non

there is a reduced need for

154 300

Personnel Exams

Due to the there is

a

hiring

freeze

non

essential

positions

reduced need for new hire exams

Community Survey

Eliminated

Council Commissioner Dinner

Event will be reduced to a

City Letter

City Letter

will

only

be mailed 2 times a year The

other 4 issues will be

City facilities

for

recognition reception

pick

produced up and the

20 000

20 000

0

7 000

6 000

1 000

42 000

20 000

22 000

9 000

5 000

4 000

Budaet

SavinQs

Remainina

40 000

20 000

20 000

298 100

50 000

248 100

and

copies left at City website for

download

Community

Outreach

No Council handouts such as the sustainability fans at the 4th of July and Village Venture

bags

booths

Community Development Operating Budget

Savings

can

be identified in the

following

accounts

Nuisance Abatement

Based on year to date actuals it is anticipated sufficient funds remain to meet the need

Contract Services

Delays the transfer of plans to electronic format project planning has been working on It also reduces engineering s ability to respond to non

Page

2 of 4

70 000

Attachment B

Operational Community

City of Claremont Draft Budget Plan

FY 2009 10

Reductions Services

Savings

Operating Budget

Savings

Program Supplies

can

be identified in the

following

accounts

Reduction in Claremont Hills Wilderness Park tours and reduces

Contract Services

ability

to

Budaet

Savinas

Remainina

37 050

2 000

35 050

889 839

37 000

852 839

replace signage

Reduces several contract maintenance services

including painting pressure washing park repairs Thompson Creek trail plant service rental and reduction in sport field maintenance Individual accounts being reduced retain sufficient funding for essential service Water

Reduces the

frequency

of

park watering

from 3

50 000

454 231

11 000

454 220

times to twice a week Human Services

Operating Budget Program Supplies Contract Services

Equipment

Savings

can

be identified in the

Budaet

Savinas

Remainina

40 285

8 000

32 285

University of La Verne Psychological services counseling program

16 500

16 500

0

Janitorial cost for Y

18 200

18 200

0

36 000

11 000

25 000

136 584

72 000

64 584

following accounts Reduction in YAC and TAC program Eliminates the

Maintenance

responsibility Youth

Scholarships

Meetings

Travel

Grants

This

the approval of

The

of Tri

FSC

which is now the

is the amount

historically

the end of the FY

to cover the cost of travel to and from events been consolidated and any travel and

training

Training The City budgets funds for the development of employees through their participation in training opportunities specific to their job classifications as well as to general training to improve their knowledge and efficiency in delivering service to residents All funds have been consolidated and any travel and training requires the approval of the City Manager s Office Equipment The City budgets for the purchase of equipment to replace pieces that are obsolete or broken increases the replacement timeline for various pieces of equipment No funds remain Miscellaneous The City budgets for expected unanticipated expenditures that may arise during the course of the year Reduces the ability of the departments to absorb unanticipated necessary expenditures No funds remain EDAC EDAC provides funding for employee development and training Budgets for both general EDAC and EDAC training programs totals 56 000 24 000 EDAC 32 000 EDAC Training EDAC will continue to coordinate events for staff all costs will be cover by participant fees Employee recognition events will be scaled back Training will continue with smaller workshops Leadership Academy will not be held Operational Remaining

53 700

City

proposed savings remaining in budget at

expenditure category is budgeted City operations All funds have the City Manager s Office

and conferences relevant to

requires

supplies

Reductions Subtotal

72 000

69 555

35 000

34 555 35 000

27 000

27 310

27 000

310

10 000

10 000

0

10 000

44 000 56 000

44 000

12 000

516 000

Shortfall

1 158 000

Page

3 of 4

Attachment B

City of Claremont Draft Budget Plan

FY 2009 10

Benefit Reductions Claremont

Management Association

CMA

Division and

Claremont Professional Association CPEA

Department Engineers

Heads

235 000

Planners and

San Bernardino Public Employees Association

SBPEA

70 000

Administrative and Technical

Employees

253 000

Benefit Reduction Subtotal

Remaining

558 000

Shortfall

600 000

Organizational Changes Claremont Employee Association CEA Claremont Police Management Association Claremont Police Officers Association

Organizational Changes Remaining

Maintenance Sanitation Motor Fleet and Sewer CPMA

CPOA

Sergeants

Lieutenants

Officers and

Captains

Corporals

Employees Org Changes

100 000 Recommended

by

CPMA

200 000 300 000

Subtotal

600 000

Shortfall

o

Page

4 of 4