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HomeMy WebLinkAboutBGT 1993-1994 Budget MessageCITY OF MOORPARK OFFICE OF THE CITY MANAGER INTEROFFICE MEMORANDUM TO: The Honorable City Council FROM: Steven Rueny, City Manager P�t DATE: June 16, 1993 SUBJECT: CITY MANAGER'S BUDGET MESSAGE FY 1993/94 The proposed Budget for Fiscal Year 1993/94 is submitted to the City Council for consideration. For the fourth consecutive year, the State is projecting a multi- billion dollar deficit. The legislature and Governor are again engaged in prolonged discussions on revenue and expenditure alternatives for balancing the State Budget. The State of California continues to face a budget deficit and is looking to the traditional revenue sources of cities, counties and special districts to balance the State budget. The impact on City revenues and expenditures is not known at this time. A variety of proposals are being considered and their impacts upon the City of Moorpark vary. At this juncture in the process, it is not possible to predict which scenario will play out and what the actual impacts will be. In the 1990/91 and 1991/92 fiscal years, the State authorized the County to impose booking fees and property tax administration fees, phased in a two year elimination of the cigarette tax subvention, diverted 50% of the non - parking violation court fines and reduced the vehicle license fee (VLF) subvention by 18.75 %. The combined loss in revenue and increase in fees is $360,000 each year. For FY 1992/93, the State took $140,000 of property tax from the City as well as $40,000 from the then litigation restricted Redevelopment Agency. The attached budget was developed under the assumption that the Governor's recommended transfer of $288 million dollars from cities will take place. The impact on the City of Moorpark would be the loss of $260,000 of property tax. It is estimated that general fund actual expenditures over the last two years,will be $296,000 less than the budget for those years. General Fund revenues in the same two year period generally remained on target with projections. The unspent funds lapse at year end and increase the fund balance reserve and are now available for offsetting the State proposed local government revenue cuts or other uses. City Manager's Budget Message FY 1993/94 June 16, 1993 Page 2 Proposition 111 from 1990 imposed a maintenance of effort (MOE) mandate on the City to spend a specified amount of discretionary funds, other than gas tax and LTF funds, for street purposes. The amount must equal the average of such expenditures over the three year period of 1987/88 - 1989/90. The City's obligation is $68,197. The City previously used the Traffic Safety Fund for a portion of street maintenance. When combined with a 50% reduction in court fines, which is the revenue source for the Traffic Safety Fund, the MOE burden falls on the General Fund. The annual amount of Traffic Safety Fund revenue is sufficient to fund the current crossing guard staffing with little funds left for past uses. In past years, the City funded as much as $53,000 of street maintenance each year from the Traffic Safety Fund. This must now be funded by Gas Tax funds. For 1992/93 and again 1993/94, the MOE obligation has been suspended. However, it will be applicable in future years while there is no guarantee that the State will return the revenue sources that it has taken from the cities or costs it has imposed on us over the past four years. General Fund Revenue General Fund revenue of $4,156,657 is an increase of about $44,000 from the 1992/93 projections of $4,112,836. Interest earnings are expected to increase by $55,000 in the General Fund even though the average earnings rate is expected to decline slightly. The City's three largest sources of revenue -- Property Tax, Sales Tax and VLF -- are all projected to be flat and cumulatively show only a slight increase. Budget Overview The following overview highlights the more significant points and changes contained in the proposed Budget: 1. Modification to the percentage spread of certain operations and maintenance items to the departments and Redevelopment Agency. The Administrative Services Department supports most of the other departments funded by the General Fund and not specifically listed. City Manager's Budget Message FY 1993/94 June 16, 1993 Page 3 Current Proposed Administrative Services 25 15 Recreation 20 20 Community Development 35 20 Public Works 20 25 Moorpark Redevelopment Agency 0 20 2. The Community Center operations are again funded by the General Fund and not the Park Maintenance Assessment District (AD 85 -1). 3. We believe there will be less activity than in past years for the City Attorney. In the event additional litigation occurs, funds would need to be drawn from the General Fund Reserve. 4. The County Cities and County of Ventura are in the process of forming a Council of Governments (COG). As this develops, there may need to be an expenditure of funds. No funds have been budgeted since transition to a fully operating COG is not expected in 1993/94. 5. The County discussing Authority. planned in enacted by needed. Cities and County of Ventura are still the formation of a County Solid Waste No expenditures for this purpose have been 1993/94, though a portion of the AB 939 fee the Council on June 3 could be used, if 6. The City contribution to the Chamber of Commerce is proposed for $3,000. This is $3,000 less than in 1991/92 and 1992/93 and in line with the original intent of providing funds to help the Chamber get started with its objective of providing a full -time staff person. The City has contributed $33,000 to the Chamber in the last four years. 7. The National Pollutant Discharge Elimination System ( NPDES) is a federal mandate to establish a storm water management program. This program is expected to be expensive in future years. As authorized by the Council, the City is participating jointly with the County of Ventura and Cities of Simi Valley, Thousand Oaks and Camarillo to comply with the NPDES provisions. The City declined to participate in the assessment district to fund Moorpark's cost of City Manager's Budget Message PY 1993/94 June 16, 1993 Page 4 participation. The Gas Tax, General Fund, and Redevelopment Agency are proposed to fund the required drainage studies. 8. To maintain the existing City bus system with TDA funding, it must meet a 15% fare box return. We are not yet able to achieve this level. As a result, an approximate $8,000 General Fund subsidy must be provided to avoid a) dropping the service, or b) the inability to use any TDA funds for this $90,000 plus activity. 9. Consistent with earlier Council consensus, staff is including a Property Management department as an enterprise activity. This will account for leases of the soon to be acquired former rail property and other City Council properties. 10. Staff proposes to continue to contract with the County of Ventura's Animal Regulation Agency as it has since incorporation. County budget reductions have resulted in lower projected costs for the upcoming fiscal year, but these are being offset by a decreasing revenue (from Moorpark residents who pay for licenses and shelter services), which results in an estimated cost equal to the previous year. The current mandated services (shelter, patrol and enforcement) will remain the same; however, services such as public education and dead animal pick up may be reduced. 11. As you know, the City recently initiated a contract for sales'tax auditing and reporting. At a cost of $300 per month, the contract firm will provide reports about the City's sales taxes. In addition, they will perform on -going audits to insure the City is receiving its correct share of sales taxes. 12. The Recreation Fund must also be closely monitored to insure that the projected revenues are received. Without this, the General Fund could be impacted. Staff continues to evaluate all programs to insure that an optimum fee is charged to offset program costs. 13. The City now has the responsibility for maintaining the Metrolink station. This is funded with TDA funds. City Manager's.Budget Message FY 1993/94 June 16, 1993 Page 5 14. While not a huge expenditure of funds, it is important to 'point out the emphasis on customer service. All employees are aware of this priority. The Assistant to the City Manager will be coordinating this program with on -going reminders and recognition for excellent service. Prior Years' Savings A significant change in this year's Budget compared to previous years' is the addition of an operational fund for the Moorpark Redevelopment Agency. The Agency is a separate legal entity that contracts with the City for personnel and general objectives. Some existing staff time has been reallocated between departments to allow support for the Agency and its projects. This broader scope of responsibilities and activities has resulted in a reduction of $182,000 in general fund activities and expenses. Gann Appropriation Limit The Gann Appropriation Limit is the ceiling established for expenditures based upon the revenues received as proceeds of taxes. This limitation was established upon incorporation of the City based upon a study done by the Local Agency Formation Commission. Over the last year, staff has researched the assumptions made in establishing the City's Gann Limit. The Commission attempted to provide a reasonable expenditure ceiling by using their projection of City revenues in its fifth year of operation as the initial appropriation limit. Unfortunately, their predictions were in error. Staff has recommended the correction of the Gann Appropriation Limit based upon the actual revenues. If this is done, the appropriation limit will be higher than the actual revenues received since incorporation and the City will not be further burdened by the current erroneous Gann Limit. Attached is the current allocation of Gann Funds. The amount currently set aside for street improvements and economic development can be considered for reallocation. Otherwise, I don't recommend any changes. Arroyo Vista Community Park and Recreation Staffing The park, except fqr the building improvements, will be open to the public this summer. Maintenance costs are included in the Parks Department. The building is City Manager's Budget Message FY 1993/94 June 16, 1993 Page 6 scheduled to be open in early 1994. The maintenance for the building should be handled by existing staff for 1993/94 by reducing maintenance services at City Hall and the Community Center supplemented by budgeted part -time staff and park maintenance staff, if needed. Staffing of the gym and meeting rooms is currently being evaluated. We believe that sports programs, contract recreation classes and rentals will help offset the costs. At this time, it is recommended that the Recreation Coordinator position left vacant since March, 1993, be filled. The position will have responsibility for adult sports leagues and developing teen programming among other responsibilities. Capital Improvements In consideration of the continuing recession in California, it is recommended that the City move forward with capital improvement programs which will provide needed infrastructure or rehabilitate existing infrastructure. The next couple of years will reflect intensive capital improvements with $7 million in new projects slated for this year from a variety of City related funding sources. The redevelopment agency has also obligated itself to the expenditure of the proceeds of its $10 million dollar bond issuance within the next three years. Approximately $8 million of which will be in the form of capital projects which will be managed by city staff for the agency. The continuing program of parks and street improvements funded by restricted revenues, the Redevelopment Agency projects, FCC required radio system improvements, and $6,800 in computer related purchases are the only major capitol items proposed in the budget. City Clerk With the addition of the optical disk system for records retrieval, the demand for information from the City Clerk's office has increased significantly. It is projected with the additional activity of the Redevelopment Agency, the demands for this department will continue to increase. It is recommended that the hours of the Records Clerk position be doubled and that two optical disk information retrieval stations be set up in City Hall. Police Services The last year has seen a tremendous decline in the number of injury accidents (30 %) in Moorpark as the traffic City Manager's Budget Message FY 1993/94 June 16, 1993 Page 7 enforcement division stepped up enforcement efforts. It is our recommendation that this effort be continued. Further, the crime solution rate attributed to the detective division is high; however, the number of crimes investigated has not been satisfactory. Adding a Sergeant position to the detective division this year will provide the emphasis required to increase the number of cases investigated and improve upon their solution rate. Community Development Community Development activity which slowed over the past two years shows signs of increasing. A basic level of community development services are typically maintained through General Fund support; however, since 1985, the City has been able to minimize General Fund support by relying on fees and developer deposits for services related to specific projects. It is projected that over the next fiscal year, we will exhaust the reserves in this fund which have been built up over the years. Priorities and work activities for this department must be even more carefully structured to maintain the ability to be self - supporting among the planning, engineering and building and safety activities. Without major improvement in the recession and building activity in particular, the City will be faced with either providing General Fund support or reduction in personnel and other costs. In 1992/93, the anticipated work on specific plans following the General Plan Update did not occur. As a result, staff time was diverted to non -fee producing work such as non - smoking ordinance, adult business ordinance, zoning code update, sign code revision, improvements to procedures and Measure "F" review. The currently vacant Code Enforcement Officer position should remain vacant unless funded by General Fund or until later in the fiscal year when we have a better picture of the revenue being generated. Senior Center This is the first full year of operation of the senior center and the first year to segregate the operating costs of the senior center into its own budget. With this new budget, it is recommended that the Senior Center Coordinator position be reclassified to the same level as the Recreation Coordinator position. This is consistent City Manager's Budget Message FY 1993/94 June 16, 1993 Page 8 with the duties and responsibilities of the two positions. This is a 15% range adjustment. Redevelopment Agency The Agency in addition to some partial support from existing positions will also require primary support. With this budget are included the Economic /Redevelopment Manager and Secretary positions which were approved in FY 1992/93. In addition, a proposed new position added with this budget is an Account Technician as well as the previously mentioned 1,040 hours added to the City Clerk's department for the Records Clerk. General Fund Reserves. Equipment Replacement and Capital Improvement Funds overall, there are very few recommended outlays for the purchase of additional equipment or buildings, or for the replacement of existing equipment in this budget. Requests for the most part for needed items are being deferred until the impacts of the State's actions are known. Meanwhile, staff recommends the continuation of the practice of allocating revenues in excess of expenditures to either the Equipment Replacement Fund or the Capital Projects Fund. These funds would be used to pre- finance the purchase of equipment or buildings which will be needed. Whether or not funds will be available for contribution to these funds will be dependent in large part upon the actions of the State. While much of the City's infrastructure is relatively new, as it ages there will be a greater demand to supplement restricted funds such as Gas Tax and the Park Improvement Fund with the General Fund. Four facilities need funding: 1) public works yard; 2) City Hall expansion; 3) Teen Center; and 4) Arroyo Vista Community Park. Another reason to have an adequate reserve is to offset the financial impact of natural disasters, litigation, the changes in the economy, unilateral State action affecting the City's budget, and reduced development activity. Summary The Budget and Finance Committee and staff have developed the proposed Budget with the constraints and assumptions discussed in this report. As the Council knows, the City has faced a number of new mandates and has introduced city Manager's Budget Message PY 1993/94 June 16, 1993 Page 9 several new activities to meet the interests and demands for additional and improved services. The City already operates at minimum staffing levels. The filling of the vacant Recreation Coordinator position is needed to staff the Arroyo Vista Community Park facility and provide for sports and youth programs. The proposed Budget is based on no further cuts in State subventions or imposition of new mandates. The City needs to maintain an adequate reserve and plan for future capital needs. The City is providing several new services including expanded recreation services, 34 acres of additional developed park, expanded cable television government channel programming, commuter rail station maintenance, at -risk youth services, senior citizen center staffing, customer service program, solid waste /recycling programs and storm water management activities among others. Constrained as we are by forces beyond our control, the City Council has anticipated financial difficulties and has left the City with ample reserves to stave off drastic State action this fiscal year. c: \wp51 \citymgr \budget.mee CURRENT GANN ALLOCATION Charles Street improvements Other street improvements Arroyo Vista Park North Meadows Park Paramedics Economic Development Coordinator Police Services (future years) Senior Citizen Coordinator 92/93 Senior Citizen Coordinator 93/94 Youth Services (3rd year) Youth Services (93/94) Disaster Services Emergency generator Undesignated (prior years) 1992/93 estimated interest income TOTAL GANN FUNDS - AVAILABLE /RESERVED $ 30,000* $ 96,303 b $300,000 $ 5,000 $ 75,000 $ 30,000 $ 80,000p, $ 20,000 $ 22,000�� $ 25,000 $ 40,000 $ 35,0000 $ 23,0000— $ 2,554 $ 40,000 $823,857 �l