19F - CITY MANAGER BUDGET UPDATE

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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 3, 2011 TITLE: CITY MANAGER BUDGET STABILIZATION PLAN WEEKLY UPDATE CITY MANAGER RECOMMENDED ACTION Receive and file. DISCUSSION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1' Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER On September 19, 2011 City staff presented to the Council a Budget Stabilization Plan that included a 4-prong approach to address the City's structural budget deficit. Like many cities, Santa Ana has been affected by the national recession, which affected all of the cities' major revenue sources used to fund mission-critical services. Further, the State of California revenue take-aways and the dramatic increase in PERS rates have negatively impacted Santa Ana's current budget. In an effort to provide the Council with weekly action steps the City is taking to either reduce expenditures or increase revenues, I offer you the following updates associated with the 4-prong approach: Negotiated Compensation Reductions • All three major labor groups are currently in discussions with the City Labor Negotiator. Outsourcing • 16 areas identified in the Management Partners Report are being evaluated. Three RFPs are ready for release next week. Appropriate meet and confer meetings with labor groups have occurred. Additional opportunities to reduce cost through outsourcing are being explored. • Staff reviewed the Bowers contract in full detail. The contract does not expire for approximately 37 more years and commits the City to operating expenses in the approximate amount of $1.4 million per year. Staff will meet with the Bowers President to seek a reduction to the City's obligation. We will also discuss the use of the Kidseum and a 3rd Street City-owned property currently used for storage by Bowers. 19F-1