Loading...
HomeMy WebLinkAboutAGENDA REPORT 1999 0505 CC REG ITEM 10JITEM (D Presentation on City Manager's Recommended Operating and Capital Improvements Budget for Fiscal Year 1999/2000 L _ _ -- __ I _- __ CITY OF MOORPARK AGENDA REPORT ITEM I 0 - J*- CITY OF MOOR AIM CALIFORNIA. City Conneii Meeting TO: Honorable City Council of 15- 5 -qq! ACTION. fit' 1.41 -1 6 P :F FROM: Steven Kueny, City Manager c _ ftn l DATE: May 4, 1999 (Council Meeting of Ma 5, 1999) SUBJECT: City Manager's Budget Message for Fiscal Year 1999/2000 The City Manager's Recommended Budgets for the City of Moorpark and the Moorpark Redevelopment Agency for Fiscal year 1999/2000 (FY 99/00) are presented to the City Council for its consideration. The proposed City Budget totals $11,654,502 (operations: $11,452,702; capital outlay: $201,800) and the Redevelopment Agency Budget totals $4,587,090 (operations: $955,840; capital outlay: $1,350; debt service: $3,629,900). The Capital Improvement Budget is $3,006,116. The total General Fund expenditures in the proposed budget are $7,034,280. The City faces a potential deficit of $429,850 in the General Fund, depending on the outcome of the Park Maintenance Assessment election. While the overall budget is in a better condition than the budget presented a year ago, it continues to contain shortfalls in meeting the program and staffing needs for the City of Moorpark. MAJOR INFLUENCES ON THE FY 99/00 BUDGET As had been reported to the City Council in the past, the City's General Fund revenues have been generally flat for a number of years. No major retailers have opened in the City to increase sales tax revenues and very little new development has taken place in the last year to increase property tax revenues above the gradual increase in assessed value to reflect increased sales of existing properties, especially residential. In FY 98/99 the City lost the park maintenance assessment as a revenue source resulting in a $600,000 revenue lose. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 02 The current fiscal year will close out with an estimated $165,500 of budgeted General Funds unexpended. During the year there have been a number of vacancies in approved positions including the Assistant to the City Manager (12 months); Human Resources Analyst (3 months); Senior Management Analyst in Administrative Services (9 months); Planning Technician (6 months); Senior Management Analyst in Public Works (6 months); Maintenance Worker II in Public Works (3 months); Secretary in Community Development (3 months); Community Development Director (3 months); Community Services Officer (3 months); and Police Cadets (3 months). These vacancies saved about $129,600 of General Funds, but they caused increased workloads on other staff members and delays on some work. The balance of the savings, $35,900 in General Funds, was primarily a result of not undertaking projects that were budgeted. Many of these projects are proposed to be funded in the FY 99/00 budget. The General Fund savings would have been greater, and the subsequent fund balance reduction less, except for the unanticipated special election and the litigation costs the City was faced with during the fiscal year. The biggest potential impact on the City's budget will be the result of the park maintenance assessment ballot. If successful, the assessment will generate approximately $447,000 in revenues during FY 99/00. Passage would eliminate the deficit and provide an estimated $17,500 in General Fund revenues above proposed expenses. If the assessment does not pass, cuts totaling $429,850 will need to be made, new revenues developed, or use of General Fund reserves, or a combination of the three items in order to balance the budget. Last year the City Council was able to balance the budget through a combination of allocating prior year savings ($163,700), shifting personnel costs to restricted revenue sources, reduction in staffing levels, and program cuts ($193,200) and tapping into the City's reserve funds. The program cuts and the personnel cost shifts have been continued in this budget. City Manager's May 05, 1999 Page 03 BUDGET FORMAT Budget Message for FY 99/00 The overall budget format is the same as presented to the Council last year. There have been some changes to improve the budget document and the process. First, there have been changes to the Department and Division account numbers to reflect the new chart of accounts to be used with the City's new accounting software. The noticeable effect of this action is the reordering of some of the divisions in Administrative Services, Community Services and Public Works. The individual object codes have also been modified to provide more accurate cost center accounting and provide more information to the Council and public on how the City and Agency expend funds. Second, the year -end "savings" (a combination of projected revenues exceeding budgeted revenues and projected expenditures less than budgeted expenditures) are the result of staff vacancies and delayed projects that are fully funded in the proposed budget. As a result there is no separate pool of "savings" that can be allocated as part of the budget process. It is important to realize that these monies are a one -time revenue and cannot be a basis for long -term decisions. As a reminder, the FY 98/99 General Fund budget was balanced by using prior year expenditure savings. The same expenditure savings are in essence carried over again in order to balance the FY 99/00 budget. Third, capital improvement projects approved by the Council and Agency as part of the current budget (FY 98/99) are encumbered to the next fiscal year and the funding is reflected as such in the fund balance. The Council or Agency may desire to delete a project as part of this budget review, which would make that revenue available for other purposes. Finally, there is included under the Administrative Services Department a new division titled "'Non- Departmental" that includes the expenses that are part of the overhead allocations. The division is included as an information platform for the Council. Actual appropriation City Manager's Budget Message for FY 99/00 May 05, 1999 Page 04 of funds is included in the individual department and division accounts. BUDGET OVERVIEW As stated earlier, the proposed budget contains a projected General Fund deficit of $429,850. If the property owners in Moorpark approve the park maintenance assessment, the budget as presented will be balanced. Following are some general points about the budget for the Council's information and consideration. 1. As presented, the budget contains one new position, a Finance Manager. This is in response to the KPMG report from 1994, which stated the City's finance organization was understaffed by four (4) positions. The finding determined that this could cause delays in processing payables and receivables, less frequent allocations between funds and weaker internal controls. For the past few years the Senior Management Analyst in Administrative Services has increased the time spent on finance activities as a means to compensate for this situation. That position has been vacant since July 1998 forcing other positions to assume finance activities with a domino effect of delaying other projects. The current Senior Management Analyst position would be replaced with a Management Analyst position in the Administrative Services Department who will assist the City Manager and Assistant City Manager with various projects, and be available to assist other departments as was the intent when the existing Senior Management Analyst position was authorized. 2. The City of Moorpark will realize savings this year in its California Public Employees Retirement System (PERS) payments. As a result of the City's employee demographics and the increased investment earnings realized by PERS, the City's employer contribution rate decreased from 11.33% to 0.826 %, resulting in savings to the City of $41,000 in General Fund costs. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 05 As a precaution, this saving could be reversed in future years as a result of actuarial studies conducted annually by PERS. The cost of medical insurance and other benefits are projected to increase by 5 %. 3. No funds are budgeted to address the space requirements for employees in city hall. The space needs study will be presented to the Council in the coming months with recommendations for an interim solution. Funding will need to be addressed at that time. 4. No funds are included in the budget to address the City's antiquated phone system. To replace the current system would cost between $50,000 and $55,000, with $31,000 to $35,000 needed from the General Fund. This could be appropriated from the General Fund or from the Equipment Replacement Fund. 5. Funds are included to replenish the Equipment Replacement Fund that has not had a contribution since FY 96/97. The appropriation of $60,500 would only cover the amount of General Fund expenditures on capital outlays in the past two fiscal years, and does not provide a fully funded depreciation account. With the allocation and projected interest for the next fiscal year, the Equipment Replacement Fund is projected to have an ending fund balance of $340,960. The General Fund share of the Fund should be over $365,400 at June 30, 1999, so even with the proposed $60,500 contribution, an additional $24,400 is needed. 6. To closely reflect actual cost centers, telephone expenses including cellular and pager rentals are included in the individual departments and divisions rather than as part of the overhead allocations. System maintenance and rental costs continue to be in the overhead. 7. The City is currently having a cost allocation and indirect cost study being conducted by the firm of DMG City Manager's Budget Message for FY 99/00 May 05, 1999 Page 06 Maximus. The study will identify the appropriate amount of indirect and overhead costs that can be charged as part of fees and that can be charged to other departments and non - General Fund revenues. Staff has been updating the allocations based on a 1989 study. With the changes that have taken place in the City's organization and cost centers, the allocations and charges to other funds may change to avoid audit questions such as arose with the recent Gas Tax audit. There is a possibility that more of the overhead and indirect costs will need to be charged to the General Fund beginning in FY 99/00. A General Fund reserve should be retained to cover this potential cost, pending the study's findings. On the positive side, the study may identify costs that can be allocated to restricted revenues not charged in the past such as traffic safety and areas of contribution. 8. Based on current financial conditions, staff, had projected a General Fund deficit of $800,000 for FY 99/00. The City will be able to balance the FY 1999/00 budget as a result of the following actions: A. The PERS savings of $41,100 which may not be available in future years. B. The transfer of approximately $25,000 in General Fund personnel costs to restricted revenue sources. C. Projected revenues increasing by $273,300. The primary sources for the increase are interest income growth of $139,300, cable franchise increase of $17,000 with the additional 2% fee from the Entertainment Express franchise, one- time franchise action charges of $55,000, and property tax growth of $30,000. The interest amount in particular will decrease in future years as the Agency repays the City's loans. While the Agency will pay 8% interest on the borrowed funds, the City is now able to earn 5% on its investments. This will eventually be a - - -. i. _. __.... __.. , - -_- ..__- - City Manager's Budget Message for FY 99100 May 05, 1999 Page 07 150,000 reduction in interest to the City, assuming current interest conditions. D. The park maintenance assessment is projected to generate $447,000 in FY 99/00. E. A $30,000 reduction in the City's General Liability and Workers Compensation insurance premiums, of which $17,500 is General Funds. This is considered a one -time saving due to the fluctuation of the premium amounts. REVENUE PROJECTIONS FOR FY 99/00 The City's General Fund is expected to have relatively little growth, about four and one -half percent (4.5 %) over 1998/99. Economic development activities are targeting growth in sales tax, but current demographics remain an impediment to attracting many of the desired retailers. Though the City continues to work with the Chamber of Commerce, property owners, and real estate brokers on attracting desired retail users, in the short run (2 -3 years) sales tax is not expected to increase significantly. The City's sales tax revenue remains at about one -third (1/3) of the statewide average on a per capita basis. The proposed budget assumes 100% backfill of the Vehicle License Fee (VLF) by the State, as well as a slight increase. This cannot be guaranteed in future years.. The City continues to lose approximately $160,000 each year from State take- aways, with no indication they will be reinstated. The City remains a low sales and property tax City with a relatively low General Fund budget. The City has relied on development activity to secure additional funds to supplement the General Funds, typically for one -time purposes. A major increase is projected in Community Development revenues for the fiscal year ($1.7 million above the current year) reflecting the number of projects scheduled to begin prior to June 2000 (Lennar, Archstone, City Manager's Budget Message for FY 99/00 May 05, 1999 Page 08 Pacific Communities, Toll Brothers). With the revenue increase is a corresponding expenditure increase for Building & Safety and Engineering services. The revenues will allow the City to continue to fund the operations of the Community Development Department and indirect costs of other departments, and to fund the various General Plan Element updates next year from Community Development funds. The Council established an endowment fund, which will have over $4,500,000 at the start of the fiscal year, from which 3% interest earnings accrue to the General Fund (the balance remains in the Endowment Fund) . $1,500,000 was received from the assets of the Moorpark Mosquito Abatement District and $3,000,000 was received from the Moorpark Country Club Estates development agreement. The fund may increase during the next fiscal year if the Council decides to place other development fees into the account. Staff fully expects the Parks Maintenance District to be approved by the property owners; however, this will only fund about sixty percent (60 %) of current park maintenance costs. Additional revenues will be needed if the community desires additional amenities such as the build out of Arroyo Vista Community Park (AVCP). A large increase in General Fund revenues is from investment earnings. While the rate of return is projected to average only 5 %, the dollar amount is projected to increase by over $139,000 from the current year. Two factors contribute to this growth. First, the Council and Agency Board approval of an accelerated repayment of City General Fund loans to the Redevelopment Agency places the General Fund in a positive cash position for the first time in a number of years. However, as more of the loan to the Agency is paid back, less interest revenue will be realized due to the difference in rates charged to the Agency (8 %) and the rates received from LAIF (5 %). There will be decreases of $130,000 in the amount of loan interest paid to the City from the Redevelopment Agency as a result of the repayment of the loans and the proposed decrease in the interest charged from the current 10% to 8 %. This is offset by the interest income from the Endowment Fund. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 09 In addition to the recent increase in franchise fees for cable television in the Mountain Meadows area from three percent (3 %) to five percent (5 %) {$17,000 per year at current rated} and the phase -in of additional property tax from the Ventura Regional Sanitation District (an estimated $40,000) in 1998/99), the City has been creative in developing unique revenue sources including: 1. Landfill Impact Fee $ 70,000 2. Annual fee for LeClub bond refunding $ 21,700 3. Endowment fund interest $135,000 4. Cable TV franchise extensions fees $ 59,000 (earmarked for equipment) Unfortunately the franchise extension fees is one - time -only funds, and the remaining three items could be eliminated or reduced in the future. The proposed budget does not include significant new General Fund revenue. The City has an Occupancy Tax for hotels /motels so in the event one is sited on either the Carlsberg or the SDI commercial sites, it could bring in revenues of $50,000 to $150,000 per year depending on its size. The options to consider for increasing General Fund revenue from potential new sources include: 1. Transfer lease revenue for an undeveloped park site to the General Fund from the Park Improvement Fund. It is currently about $12,000 per year. 2. Increase Refuse Franchise fees. Each one percent (1 %) of gross revenue (residential and commercial) is currently about $28,000. 3. Implementation of a Sewer Franchise Fee. This would require the consent of the County of Ventura and possibly require a vote. 4. Seek voter approval of a specific tax authority: City Manager's Budget Message for FY 99/00 May 05, 1999 Page 10 A. Business License Tax; B. Utility Users Tax; C. Special Tax for certain police services or other designated purpose. 5. Sell ads on the City bus and other City vehicles. The City could also allow commercial installation of bus benches /shelters for a fee. 6. Consider seeking a refund of the current PERS excess deposit. (This could impact on the City's employer contribution rate in the future.) 7. Share sales tax with other jurisdictions. (It is unlikely given the current situation that other agencies would voluntarily share.) As indicated, the overall revenues projected for next fiscal year are basically flat. Property taxes are anticipated to increase by 2.3% this year with larger increases in future years as the new residential developments enter the tax rolls. Sales taxes are projected to increase by only $10,000 or less than 1 %. There will be an increase in franchise revenues collected from the former Entertainment Express franchise area as a result of the Council's action in December 1998 when it changed the franchise fee to 5 %. The projected annual increase is $17,000. Moorpark will also collect fees from the cable television franchise holders to cover all direct and indirect costs associated with the City's review of the renewal applications. SUMMARY OF RECOMMENDATIONS Summaries of the salient points in the proposed budget for each department and division follow. City Council The cost for appraisal services and telephone expenses are appropriated in this department to accurately reflect cost City Manager's Budget Message for FY 99/00 May 05, 1999 Page 11 centers. Conference and travel expenses are increased to reflect the League of California Cities conference being held in San Jose this year. City Manager Other than the telephone charges, no new activity is proposed. The Assistant to the City Manager position remains vacant, and the additional work hours for the executive secretaries approved for the current fiscal year remains. Ci ty Clerk There is an increase in the cost of printing agenda reports due to the expenditure of the donation from Kinko's and the agenda volume. Computer equipment to upgrade the optical disc system and to provide a backup system are included in the capital outlays as is half of the cost of a laptop computer to be used for meeting minute taking. This will be shared with Community Development. Human Resources No substantial changes are proposed in this division. A customer service training program for all city employees is proposed for next fiscal year. Public Information It is recommended the citizen recognition event be eliminated next year. This was a $1,700 expenditure. Council will need to decide if it wants to restore having four (4) newsletters published each year. The issues were reduced from four to three in the current year as cost savings. An additional $680 would need to be appropriated in this division to cover the added costs. A total of $75,000 is proposed for upgrades to the cameras, lights and microphones in the Apricot Room of the Community Center, and related broadcast equipment improvements. This will increase the quality of the telecasts of the Council and commission meetings. All of the funding for the equipment will come from the special fees being charged for the cable franchise considerations and the franchise renewal costs. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 12 City Attorney The litigation that has taken place this year substantially increased the estimated expenditures over the budgeted amount. It is anticipated that the cost for litigation and other special services will increase above the historical level, but will be less than the current year. Administrative Services Personnel costs reflect the change from a Senior Management Analyst to a Management Analyst position in this Division. Proposed in this Department is a "Claims Payment" line item in the amount of $60,000 to pay settlement costs and minor claims that approved by the City Manager under the Council's policy. In the past these were paid through the general overhead. An appropriation of $60,500 to the City's Equipment Replacement Fund to cover only expenditures over the past two fiscal years is proposed. An Organization and Management study is proposed for next fiscal year at a total cost of $40,000. Funding will come from the General Fund (30%), Redevelopment funds (30%), Community Development funds (30 %) and Gas Tax funds (10%). The purpose of the study will be to review the overall City organization as well as each department's internal structure and work load and to make appropriate recommendations on staffing requirements and restructuring assignment and workloads. The recommended budget includes costs for the evaluation and preparation of the cable television franchises. Both franchises expire on December 20, 2000 and negotiations will need to be completed during the next fiscal year. The appropriation covers attorney fees, consultant costs and indirect costs to the City for this process. All costs will be recovered from administrative fees charged to the franchise holders. The reallocation of ten percent (10 %) of the Assistant City Manager's time to the Redevelopment Agency's Housing Set - Aside fund is proposed, saving the General Fund approximately $10,000. This reflects the additional City Manager's Budget Message for FY 99100 May 05, 1999 Page 13 emphasis that will be required next year on affordable housing programs. Finance Proposed is $20,000 for a fixed asset study funded with General Fund ($15,600), Redevelopment Fund ($2,000) and Gas Tax Funds ($2,400). For the past few years the City has received a management comment from the City's independent auditors that the fixed asset accounting needs to be updated and improved. This study would identify the City's current assets, establish a depreciation schedule and update the replacement fund requirements. It is also proposed the study would identify a tracking program for assets to be used by staff in the future. Part of the improvements is the purchase of the Pentamation fixed asset accounting module to allow for automated recording of fixed assets and updating the records, which is now done manually. Combined, these will adequately address the fixed asset concerns raised in the auditor's report. Also proposed is the purchase of an electronic cash register and software ($7,600 General Fund, $1,900 Community Development Funds) to be connected to the accounting system. This will provide greater accuracy in recording and posting receipts, and will address one of the comments in recent audit management findings. An issue that is addressed in this budget consideration is the staffing level in the Finance Division. The KPMG report presented to the City in 1994 indicated the finance operation was short four (4) positions to attain an optimal staffing level. The vacancy in the Senior Management Analyst position this past year required the Assistant City Manager and Administrative Services Manager to assume more finance related activities and reduced the time available to closely monitor the fiduciary accounts (Community Development Accounts) and to prepare various accounting reports. Also, work projects in emergency management, MIS upgrades, legislative actions and housing programs have been delayed. To address the staffing needs in finance and provide general management assistance to the City the establishment of the Finance Manager position in the City Manager's Budget Message for FY 99/00 May 15, 1999 Page 14 Finance Division is proposed. This position would be responsible for overseeing the financial operations allowing the Accounting Manager to focus on the account maintenance and audit functions for the City and Agency. Since the cost of the Finance Manager can be spread to the other funding sources, there would be net cost to the General Fund of only about $8,000. The benefit to the City would be to have a trained finance official to supervise operations, to conduct studies on alternative revenue sources and to provide assistance to the other departments on financial matters. This would free the Assistant City Manager and the Administrative Services Manager to focus on the emergency management plan, risk management, fixed asset management, legislative matters, housing programs, the cable television negotiations, revenue enhancements and other projects. Public Safety The public safety contract is projected to increase by $227,000, or 7.30 over the estimated expenditures this fiscal year, with no increase in staff or service levels. The percentage increase again exceeds the increase in the cost of living index as well as the City's General Fund increase. The higher cost reflects salary increases for the Sheriff's personnel and increased vehicle maintenance costs. Both of these increases are estimates. The City does not usually receive actual contract amounts from the Sheriff's Department until about six months into the fiscal year. The vehicle maintenance costs are still unresolved for the current fiscal year and may be changed. Next year's costs for vehicle maintenance are projected to increase 31% over the current year's budgeted amount. This will be the first year of rent and utility payments for the Police Service Center at Flory Avenue. The rent is $16,800 and utility costs are $4,000 for the year. Again this year, the proposed budget recommends spending the state grants funds (SLESF) on salary costs, training and vehicle maintenance. It is projected that $35,780 will be carried over to the next fiscal year from SEESF and City Manager's Budget Message for FY 99/00 May 05, 1999 Page 15 LLEBG. With $66,000 in new SLESF funds to be received, the recommended expenditures are follows: Continued funding for Administrative Assistant $53,267 Allocation for Overtime $ 2,551 Training $ 7,000 Conference and Meetings $ 4,440 Travel Costs $ 5,400 Vehicle Maintenance $19,700 With these $92,358 in expenditures, an ending balance of $9,422 is projected. No new funds are expected from the federal government for next year. The Council needs to be aware that the grant funds may expire at any time leaving the City with the need to backfill the amount with General Funds. Also, the actual cost for the position and other expenses are increasing at a rate greater than the increase in the grant funds, which require more General Funds to be expended. EmergTency Management No new activity is proposed for the Emergency Management division. Due to staffing limitations, the completion of the emergency plan and the staff training and exercises initially planned for this fiscal year will not occur until next fiscal year. Half of the cost of portable generators and lights for use in the EOC areas is included in this division. The balance is in Street Maintenance (Gas Tax funded) . Redevelopment Agency The Agency's activities are proposed to be the same as in prior fiscal years. The budget includes funds to conduct an update of the Redevelopment Project Plan, update the Agency's Five -Year plan required by State law and to provide funds for economic development and promotional programs. These programs will be used to implement recommendations from the Downtown Marketing Study being conducted and for projects with the Chamber of Commerce. Funding for the Chamber brochure ($5,000) and the Economic Development Collaborative - Ventura County ($3,000) are City Manager's Budget Message for FY 99/00 May 05, 1999 Page 16 included in the proposed budget. The EDC -VC request is one more year than was originally proposed to cities. The Agency Board's recent action to refinance the Agency's debt will result in debt service payment savings of approximately $20,000 per year, in addition to obtaining a "AAA" rating for the Agency's bonds. Since the final payment schedule has not been established for the Agency and housing funds, those changes are not reflected in this document. Redevelopment Acrencv -_Housing Two primary changes in this division are the inclusion of ten percent of the Assistant City Manager's time and the employment of part -time contract assistance to process the housing rehab loans. It is staff's intent to not only increase the amount of loans issued, but also to expedite the review and process time. A related issue is the Agency's need to develop and expend its housing set -aside funds. Within two years the Agency will be reaching its maximum threshold for housing reserves and needs to identify and develop programs for affordable housing in the City. Ci tv Housing This program is funded from City funds set -aside for housing programs. No new activities are proposed in this division. CDBG The proposed budget reflects the allocation of funds previously approved by the City Council. Non - Departmental This is a new division provided for the Council's information. It contains specific expenses that are included in the various Departments' overhead allocations. Two changes are proposed in this year's allocated costs. First, the direct cost for telephone and paging charges are budgeted directly in each department and not covered through the overhead. Second is the inclusion of earthquake and flood insurance at a cost of $13,800 from City Manager's Budget Message for FY 99/00 May 05, 1999 Page 17 various funding sources. This was not included in prior years because of the cost, but is felt to be an important protection for the City's fixed assets. Community Development No changes are proposed except for the inclusion of 75% of the engineering services retainer to reflect the development- related costs. The balance of the cost is in Public Works (Gas Tax funded). Building and Safety The increase in Building & Safety budget reflects the projected increase in development activity during next fiscal year. Among the projects starting are Lennar, the Archstone apartments, Pacific Communities and Toll. Approximately 150,000 square feet of industrial development is also projected. Engineerin Costs for engineering services are proposed to be transferred to Public Works, which has administrative overview of the various engineering activities. The increase in expenditures reflects the anticipated development activity. Code Enforcement No new activity is proposed under the code enforcement program. Lower legal fees are projected due to the conclusion of some major cases. Also, a replacement vehicle is proposed for the Code Enforcement Officer. It would be a dual -fuel vehicle purchased with air quality funds. Planning The proposed budget reflects funding for the Housing Element update, Zoning Code update, and Safety Element update, all of which were budgeted in the current fiscal year but not initiated due to staff limitations. The OSCAR Element was begun this year and funding will be encumbered for its conclusion. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 18 Community Services No changes are proposed in this division. Animal Regulation No changes are proposed in this division. Public Transit The only substantial change in this division is the inclusion of five percent (5 %) of one Maintenance Worker's time for cleaning and repairs are the MetroLink properties for a $2,400 increase in personnel costs. Also bike racks for the City's buses are proposed. Vector Control This is the second year in which the City has assumed the vector control services from the County. The total personnel and operating expenditures of $143,210 are fully paid for with the additional property tax revenues the City receives from the former Mosquito Abatement District. A new pickup truck is proposed to replace a truck that has high mileage and no longer appropriate for off -road use. The replacement will be a dual -fuel vehicle paid from air quality funds. Solid Waste No new programs are recommended. Senior Center No new activities are proposed for the Senior Center. Two of the three (3) part -time employees initially hired with Area Agency on Aging (AAA) funds continue to be funded with CDBG funds. This is the first year that General Funds are needed for the third employee at a General Fund cost of $10,000. To partially offset this cost, it is proposed that the Senior Center Trust Fund be used for $5,000 of this new expense. Community Facilities The title for this division was changed from "Community Center Division , to reflect its inclusion of buildings at Arroyo Vista Recreation Center. Funds are included under Property Maintenance for a security fence at the City Hall City Manager's Budget Message for FY 99/00 May 05, 1999 Page 19 annex ($850), and repairs to the gym floor at ARVC ($7,500). Among the proposed capital outlays at AVRC are an industrial ice maker ($2,500), replace carpeting ($8,000), replace window blinds ($7,500), and install an industrial sink in the kitchen ($3,000). Recreation Procrrams This division was also renamed from previous years (formerly Arroyo Vista Recreation Center). No new programs are proposed for the next fiscal year. The special programs are those that are self- funded through fees in keeping with the actions taken by the City Council last year. No funds are proposed for a July 3 fireworks program. The major capital outlay 'proposed is a new scoreboard for the AVRC gym. Library This is a new division. It has been added as a vehicle for the Council's appropriation of funds collected from the City's development library fee. Revenue collections have been minimal to date, however up to $150,000 could be collected next year from projected development. The Council should wait for the actual revenue to be realized and then make appropriations based on recommendations received. Park Maintenance The personnel costs in this division have - increased with the inclusion of 25% of the Director's and Administrative Secretary's time to this division. A reciprocal reduction is reflected in the Community Services Administration division. Operating and Maintenance costs have increased with the inclusion of Villa Campesina and the Community Center parks, re- opening of Monte Vista Park as well as the reinstatement of the watering, fertilizing and landscaping service levels. Also included is the payment of the consultants for the park maintenance assessment ballot for $55,000. An additional $3,000 in General Funds could be saved by allocating a portion of the maintenance costs at the Public City Manager's Budget Message for FY 99/00 May 05, 1999 Page 20 Works /Parks maintenance building to Gas Tax. This would be in the same proportion as the auditor's accepted purchase price split. Five percent (5 %) of a Maintenance Worker's personnel costs was allocated to transit revenues. Landscape District The only substantial change is the inclusion of the Carlsberg property in a new zone of benefit. The new zone will double the previous expenditures for landscaping services. Public Works Twenty -five percent of the engineering retainer costs are included in this division (the remainder is in Community Development). No other substantial changes are proposed. Crossing Guards No changes are proposed in this program. Street Maintenance There are no proposed changes to services provided. The overhead allocation has been reduced as part of the revised formula that reduces the overall operations and maintenance costs. Some of the street expenditures have been divided into new object codes to provide more detail on expenditure activity. One half of the cost of portable generators and lights are included here to be used for night and emergency work. A new lighter jackhammer and a walk - behind concrete saw and a fork lift attachment for the tractor are proposed to increase efficiency and for employee safety. NPDES No changes are proposed. Due to staff vacancy, there was little activity during the past year. Parking Enforcement No new activities are proposed for this division. Street Licarht.ing No new activity is proposed for this division. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 21 Licrhting District There is no new activity proposed for this division. Capital Improvements Budget The capital improvement projects total $3,006,116. The General Fund share of the budget is $24,500. Gas Tax funds account for $1,565,000 of the total and Areas of Contribution funds account for $665,000. Most capital improvement projects are street related. There are three (3) park improvement projects proposed for Campus Canyon, Glenwood and Peach Hill, primarily funded from the Park Improvement Fund. Improvements to the Agency owned sheet metal building on High Street is proposed to make the structure useable, along with a parking lot improvement on the south side of High Street. The CDBG funded projects were all previously considered by the City Council. Details of the projects are in the "Support Documentation" binder. The Budget document contains previously approved projects that will be carried over to the next fiscal year. During the budget deliberations the Council should discuss developing stable and secure revenue sources for the General Fund to protect against future State actions and to adequately meet the City's service needs, maintain appropriate reserve funds, and fully fund equipment and capital replacement and new capital projects. Just to maintain the status quo, the City will need an estimated $400,000 more revenue for FY 00 /01 ($160,000 to cover prior year savings; five percent (5 %) increase for police services; and two percent (2 %) increase in general City services.) In addition to this item and the other items contained in the budget, I urge the Council to provide direction on: 1. Funding for short -term and long -term space needs for City Hall operations. 2. More funding and staffing for teen programs. City Manager's Budget Message for FY 99/00 May 05, 1999 Page 22 RECOMMENDATION: That the City Council receive the City Manager's Recommended Operating and Capital Improvements Budgets for the Fiscal Year 1999/2000 and designate a budget workshop date at which time the City Council would review and provide direction on the budget.