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Home My WebLink AboutWSA - BUDGET PRESENTATION FY 12-1PRESENTATION_COLORFY 2012-2013 CITY OF SANTA ANA PROPOSED ANNUAL BUDGET 1 Establishing the Foundation For Fiscal Sustainability 0 2012 -13 Balanced Budget: Recurring revenues to meet recurring expenditures Is Establish base -line budget to build upon future 1122dS Of the COI'YIfYlUnitj/ (primary fiscal objective) in Full -time staffing levels (authorized position count has decreased by 33% over a 5 -yr period) Development of Fiscal Policy: ' Establishing adequate reserve levels Defining a balanced budget Use of one -time funding for one -time expenditures N Challenges to Maintaining Fiscal Health 9 Outlook and Potential Risks (Must Proceed With Caution): State Budget Impacts (May Revise) ' State deficit increased to approximately $16 Billion ' State focusing attention on redistributing Redevelopment /Housing Assets Economic Uncertainties End of Deferrals (6/30/13) Rising Pension Costs Managing Expenditures (i.e. filling vacancies) 3 Dissolution of Redevelopment IV CDA reduced its Redevelopment full -time count by 82% through the elimination of vacancies and reallocation of positions into other funding sources 1W City Successor Agency expected to receive minimal administrative and project cost funds during wind down period General Fund will provide $550K to subsidize the following: Maintain current NIP staffing /service levels ' Minimal funding for new Economic Dev. /Redevelopment efforts Unknown Impacts: County and State DOF Redevelopment audit E Defining the Fiscal Tsunami (FY2008-09 to Fvzoio-ii) Worst Economic Decline Since The Great Depression What was the impact to our City IV Significant Declines in Major Revenue Sources Sales Tax revenues decline by 26% (approx. $12M from FY07 -08 to FY09 -10) Property Tax revenues declined by 11.5% (approx. $6.7M from FY07 -08 to FY10 -11) 5 Defining the Fiscal Tsunami ' State Budget Impacts State Takeaways (i.e. Property Taxes and RDA) Loss of Motor Vehicle License Revenues ($1.2M) ' Pre - negotiated Salary /Benefit Contractual Obligations ' Rising Pension Contribution Rates Surviving the Fiscal Tsunami (FY2008 -09 to FY2011 -12) Labor Concessions ' Negotiations during closed contracts ` Use of One -time Funds and Reserves ' Reductions in Staffing Levels 1 Managing vacancies Outsourcing &Reorganization Other Cost Reduction Strategies ' Moratorium on training and travel ' Limited capital purchases 7 General Fund Budget Comparison $260 $240 $220 o $200 $180 � $160 $140 $120 $100 (Approx. $47M reduction over 5 -yr period) $243.1 M S196.5M FY08 -09 Adopted GF Budget FY12 -13 Proposed GF Budget E'1 Fiscal Year 2012 -13 Citywide Budget oj Balanced Budget Fiscal Year 2012 -13 Citywide Budget Revenues $409.8M (Includes $20M in fund Balances) 4.8% 6.3% 9.0% 9.5% 4.8% 2.7%/_ 0.1% 12.4% General Fund Housing Assistance Community Development 50.4% Water Enterprise Special Revenue Fund CDBG and Other Grants Expenditures $409.8M 4.6% 2.6%1 0.7% 5.1% 7.2% 8.8% 47.9% 11.1% 12.0% Other Enterprise Funds Capital Projects- Grants GF Related Special Revenues Fiscal Year 2012 -13 General Fund Budget 11 General Fund Underlying Base -Line Assumptions ' FY2011 -12 Base +/-negotiated concessions Outsourcing of Fire Services (PERS & security Bond to be paid out of Benefits and Risk Management Funds) Departmental Re -orgs and workforce changes Funding tied to retirement vacancies (approx. $2.1M) No departmental supplemental requests (approx. $3M) Loss of $600K in RDA contributions towards Civic Center Debt Service (non - enforceable obligation) ' $1.1M in new Prop. Tax revenues tied to the elimination of RDA (range $1.1M to $4.8M) Sales Tax projections provided by MuniServices LLC and Property Tax estimated growth per O.C. Assessors Office 12 ET sa:)lnaaS Juauaa2eueW IQ a:)ueulj 2u!pl!n8'2 Ouluueld (sa:)lnaaS •uluapy IQ •uaE)) saayl0 JIV sa:)lnaaS aal j %9'ZS A:)ua2V slioM :)llgnd aalnaaS lgad (ld uolleaa:)aa -2 sVed juawliedad a3110d %9'OZ %S'8 %E'9 %9'Z %6'E %9 *t /6 Z WS'96T$ saanlipuadx3 ul sia;suejl saaj IQ sa:)lnaaS ao; saOaegD leIuauauaanoOaaIul Aljadoad -2 AauoW jO asfl %L'L9 saaj asly:)uejj saaj -2 SI!WJad 'asua:)lj saxel -2 anuanaa aayl0 sanuanaa xel aofeW 9 %9'Z %9T WS'96T$ sanuana)j laapng punj lejau@E) ET-ZTOZ aeaA leosij %L'L %t' 9 %6'S %6' S 1E.• a a General Fund Budget By Type of Expenditure 5.2% 11.5% 20.6% 1.6% 0.7% 0.1% � I � 5.3% 55% Labor /Benefit Costs Fire Services Contractual Services Fixed Costs Debt Service Other Operating Expenses Bowers Museum Capital 14 FY2012 -13 Full -Time Workforce 15 Full -Time Authorized Positions 11900 1785 1,700 1635 1513 1510 11500 y y 11300 1,100 900 700 500 FY08 -09 FY09 -10 FY10 -11 FY11 -12 In addition, the City maintains over 150 vacancies 1203 FY12 -13 H L19, Proposed Workforce Changes ' Net Reduction of 307 FT Positions c272 tied to Foy ' Reallocation of 23 Positions Unfunding of ZZ Positions (removal of funding) All workforce changes are pending review from Personnel Services 17 Cost Recovery 2012 -13 Cost Recovery Schedule Cost Recovery New and Modified Fees 1.6% CPI — LA /Riverside /Orange County Services Index One New Fee: ' PBA - OCFA Admin. Processing Fee IV Modifying six existing fees: CDA — Enterprise Zone Hiring Credit Application Processing Fee PRCSA — Zoo Admissions (Full day & half day) PRCSA — Sports Youth Registration PWA — Water Meter Test in Field /Shop ' Clerk of the Council — Chapter 3 Appeal Hearing Fee 19 Outlook &Potential Risks FY 2013 -14 Outlook & Potential Risks Re] Outlook &Potential Risks FY 2013 -14 Budget Gap Estimated at $2.3M Base -line Assumptions: Overall 2% growth in revenues No other major revenue impacts End of negotiated deferrals (6/30/13 approx. $7M assuming no change) a PERS rate increase 2% (misc.) and 3% (safety) City continues current services and programs 21 Outlook &Potential Risks Must Proceed with Caution Potential Risk Factors: Manage expenditures (primarily the filling of vacancies) Future PERS rates increase above estimates (discount rate /reti re me nts /etc. ) State budget deficit impacts Reductions in Federal grant funding Economic uncertainties imp) Outlook &Potential Risks Organizational Strategies for the Coming Year Validate fiscal position in Mid - September (Prelim cAFR) • Develop a strategic approach to fill vacancies (EMT /Budget) • Continue to look for reorg opportunities • Invest in technology to improve efficiencies and productivity • Further develop fiscal policies (expand into ISF and Enterprise) 23 Fiscal Policy Establishment of Fiscal Policy MAI Fiscal Policy Proposed Fiscal Policy Provides For: Two - tiered reserve effort Work plan to achieve acceptable reserve levels 0 Defines balanced budget approach and use of one -time funds 25 9 1 Closing Comments City is in position to: Build fiscal stability through a balanced budget approach (aligning recurring expenditures to meet recurring revenues) Balance City finances with Council priorities Establish fiscal policy to make key sound decisions Better prepared for future economic crisis Must continue to proceed with caution: • Future State budget deficits • Economic uncertainties End of negotiated deferrals (6/30/13 approx. $7M assuming no change) Rising PERS rates Next Steps •June 4 —15t Public Hearing *June 18 — 2nd Public Hearing *July 1 —New Fiscal Year Begins MA