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HomeMy WebLinkAbout07-15-2014 B2 Measure Y Contingency Plan & Impact AnalysisCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number FROM: Wayne Padilla, Finance Director Prepared By: Joe Lamers, Budget Manager SUBJECT: MEASURE Y CONTINGENCY PLAN AND IMPACT ANALYSIS RECOMMENDATION Receive and file this update on the contingency planning process to address the possible loss of the half-percent sales tax (Measure Y) revenue stream, including the presentation of an impact analysis resulting from a significant loss in revenue such as this. DISCUSSION Background As shown below, the Fiscal Health Major City Goal directs staff to plan for future revenues and prepare a contingency plan in the event the City’s ½ percent sales tax is not renewed in the November 2014 general election. Fiscal Health - Sustain essential services, infrastructure, and fiscal health: preserve public health and safety and provide essential services in line with residents’ priorities and sustain the City’s short and long term fiscal health by planning future revenues (including renewal of Measure Y or an alternative measure), while implementing contingency planning and efficiency and cost containment strategies (including implementation of the Compensation Philosophy and monitoring further pension and benefit issues). Measure Y generates over $6.5 million annually to protect and maintain essential services. This equals 12% of the City’s general fund revenues. If a revenue measure is not approved by city voters in November 2014 the City will stop collecting Measure Y revenue on March 31, 2015 which will result in the loss of approximately $1.7 million in revenue for the last quarter of 2014- 15. During the Mid-Year Budget Update held on February 18, 2014, the City Council approved a $1.7 million contingency reserve to offset this loss of revenue in the event that Measure Y is not renewed. As a result of having this contingency reserve amount available, the City has adequate time to address the shortfall via changes to operating and capital expenditures beginning in July 2015. This will allow the Council and community an opportunity to thoroughly analyze the City’s current financial forecast and make informed decisions to address the revenue loss based on priorities and community needs defined during the development of the 2015-17 Financial Plan. Contingency Plan Process In the event the Measure Y revenue stream is not renewed, the Fiscal Health Contingency Plan would be activated as part of the 2015-17 Financial Plan process in order to address a loss of revenue in 2015-16 and beyond (Attachment 1). The development of the 2015-17 Financial Plan would be different from that of the 2013-15 Financial Plan in the sense that: 7/15/14 B2 B2 - 1 Measure Y Contingency Plan Page 2 • Feedback from residents and other community members would be solicited to identify their service priorities and needs through the Community Forum, advisory body meetings, and additional meetings or workshops that may be scheduled in light of the need to make significant budget reductions. • During the Community Forum, the residents and other community stakeholders will be asked to participate in a budget reduction exercise, in addition to the normal process of soliciting ideas and input for development of new Major City Goals. • The Budget Bulletin Survey that the City distributes in advance of the Community Forum will include questions to help City decision makers gauge community priorities in an environment where budget reductions have to be made. • A major component of the Council’s Goal-Setting Workshop will focus on the need for budget reductions so that staff can get initial direction from the Council on where to focus its efforts in crafting a budget proposal and Major City Goal work programs that meet the challenge of reducing expenditures to match reduced revenues. It is anticipated that this session would be wide-ranging and include all cost drivers including operating program (including staffing) and capital improvement plan costs. • Consistent with past practice, City employees will be engaged in identifying budget reductions and alternative service delivery methods with the goal of minimizing impacts to the community. • Department heads will evaluate the most promising cost reduction strategies and make a recommendation to the City Manager on those they believe should be implemented. This decision making process will involve the service prioritization methodology developed during the 2011-13 Financial Plan. • These recommendations will be presented to the City Council as part of the Strategic Budget Direction process so that the necessary direction can be provided to staff to produce a balanced Preliminary Financial Plan. This is consistent with the successful processes that were implemented for many cycles during which budget reductions were necessary including most recently for the 2009-11 and 2011-13 Financial Plans. Impact Analysis During the discussion held at the January 21, 2014, City Council meeting, the City Council directed staff to prepare three sets - or slates - of options using strategies described below which represent the potential impacts to operating and capital project spending that may result if revenue equivalent to Measure Y revenue stream is lost. The results of the recent work effort help illustrate the scope of the reductions that would have to be made if the city’s revenues were reduced by 12%. The impacts identified as part of the implementation of the Fiscal Health Major City Goal are intended to be examples of ways the budget could be balanced and the associated impacts if this revenue is eliminated from the City’s budget. These ideas are not intended to be “decision points” because a variety of different options will likely be considered by the City Council after taking into account all aspects of the contingency planning process, including feedback from the community, as described above. Working with the department heads and their staff, the highest priority public service provided by each function was determined and those deemed to be both the highest priority and most B2 - 2 Measure Y Contingency Plan Page 3 critical were the least affected by the proposed reductions, to the greatest extent possible. As stated previously, the goal of this exercise was to not only identify areas to cut costs but also to look at realistic efficiency measures that would help minimize or contain cost growth in the future. The method of assigning a priority to a given service or function included the following criteria, which were first identified in the 2011-13 Financial Plan Service Categorization Project document: 1. Mandated - Is the service or function legally mandated? This would include stormwater system compliance and elections administration, which are legally mandated services. 2. Heath/Safety or Essential - Does the service or function impact the health and safety of residents to a material extent or compromise the maintenance of core facilities for which the City is responsible? For example, responding to emergency calls in a timely manner, conducting building inspections or maintaining city streets. 3. Organizational Management or Core Service - Is the service or function essential to the city’s on-going operations and management or is it a typical service expected by the community benefiting all community members but not tied to public health and safety? For example this can include risk management, payroll services and computer networks or parks, open spaces or neighborhood services. 4. Targeted Services- Is the service provided to select portions of the population? Senior Center and Affordable Housing services would fall into this category. 5. Other Services - Is the service or function not described above? Employee wellness and advisory body committees would be examples of these types of services. Three slates showing the possible impacts of losing the Measure Y revenue stream have been developed based on the 2013-14 Measure Y revenue estimate of $6,684,000 and departmental costs were estimated based on 2013-14 budgeted expenditures. The slates are presented for purposes of discussion this evening with no particular priority being attached to one slate over another. The below table reflects how the distribution of proposed reductions were allocated by expense type and is followed by a description of each of the three slates. Distribution of Reductions by Expense Type Slate 1: Departments Receiving Measure Y Slate 2: All Departments Slate 3: All Dept's + Staffing Costs / Compensation Operating 40% 40% 33% CIP 60% 60% 33% Staffing Costs / Compensation 0% 0% 33% For two of the slates, the historical use of Measure Y revenue was used to assign reduction targets. This means that 60% of the estimate for Measure Y revenue was allocated against costs associated with implementing the City’s Capital Improvement Plan, and 40% was allocated to B2 - 3 Measure Y Contingency Plan Page 4 operating programs. In order to ensure that the greatest number of operating program reductions were considered, the reduction targets that were assigned to each department were increased to 110% of the initial target amount. For example, operating programs are to be reduced by the equivalent of 40% of the Measure Y revenue which equals $2,673,600. Increasing that amount to 110% made the total target reduction to be shared by the departments $2,940,960. Reduction targets assigned to capital projects were based on 60% of the Measure Y amount or $4,010,400 with no additional inflation occurring to raise the target amount. For Slate 1, the assigned operating cost reduction targets are apportioned to operating departments based on the amount of Measure Y benefit that they are currently receiving. Departments that are not receiving Measure Y benefits were not asked to develop reductions for this slate. For Slate 2, the assigned operating cost reductions are apportioned to all General Fund departments based on their proportion of the total General Fund operating budget, after adjustment for cost allocation reimbursements and revenues directly related to that department’s operation. Insurance premiums and non-departmental expenditures have not been included in the total operating budget base amount. Slate 3 is based on the following distribution: 33% to CIP, 33% to operating programs, and 33% to personnel cost reductions. As is the case with slates one and two, the target reduction amounts assigned to operating programs was increased to 110% to provide additional options. The aggregate amount of savings that would be obtained from such personnel cost reductions is equal to a 5.9% reduction in total compensation for staff supported by the General Fund. The table shown below reflects the potential cost reductions by type and by department that could occur if the Measure Y revenue stream is not renewed. B2 - 4 Measure Y Contingency Plan Page 5 Distribution of Potential Budget Reduction Impacts by Department Slate 1: Slate 2: Slate 3: Measure Y Departments All Departments All Dept's + Compensation Operating Reductions: City Administration - 172,560 143,800 City Attorney - 40,282 33,569 Finance / IT - 237,129 197,607 Human Resources - 60,734 50,611 Community Development 277,887 90,184 75,153 Public Works 1,140,720 695,899 579,916 Parks & Recreation 65,230 135,085 112,571 Police 1,016,029 949,895 791,579 Fire 440,922 559,193 465,994 Total Operating* 2,940,788 2,940,960 2,450,800 CIP 4,010,400 4,010,400 2,228,000 Staffing Costs / Compensation - - 2,228,000 Total Reductions 6,951,188 6,951,360 6,906,800 *Operating program reductions were increased by 10% to provide additional options Attached to this agenda report are worksheets that provide details about the potential impacts that could result from the reductions summarized above (Attachment 2). In these worksheets, operating program reductions are displayed by department, including the amount to be reduced, the number of FTE’s reduced as part of the proposed reduction and a statement regarding the nature of the impact that this level of reduction will have on the departments’ ability to provide services. Information is also provided to show the details of the proposed reductions in CIP spending for each of the capital outlay funds. A description within these worksheets identifies the projects proposed for reduction or elimination in 2015-16 to meet this level of reduction. The schedule for the third slate also describes the level of compensation reductions (5.9%) that would be required in order to save $2.228 million. Overall the impacts experienced in each of the slates are significant and would require a reduction in the level of service within the City. That being said, it is important to remember that should the City experience this loss of revenue the fiscal Health Contingency Plan will be activated and the Financial Planning process outlined above would implemented. FISCAL IMPACT This report is intended to portray the potential impacts of an annual loss of revenue in excess of $6.5 million. It does not reflect a proposed budget or Financial Plan for 2015-17. The analysis provided here is representative of the impacts that can be expected from the loss of such a large portion of the City’s revenue stream. If such a reduction is required the actual reductions will be developed as part of the 2015-17 Financial Planning process outlined above. B2 - 5 Measure Y Contingency Plan Page 6 ALTERNATIVES 1. Provide staff with direction on changes to incorporate into the contingency plan process outlined in this report. 2. Continue consideration of the item. If the Council chooses this alternative, direction should be given to staff to provide additional information so that the Council can complete its review. ATTACHMENTS 1. Fiscal Health Contingency Plan 2. Measure Y Impact Analysis t:\council agenda reports\2014\2014-07-15\measure y contingency plan review (padilla)\measure y report.docx B2 - 6 Fiscal Health Contingency Plan Originally Prepared in October 2001 Plan Purpose The purpose of this plan is to establish a framework and general approach in responding to adverse fiscal circumstances. What It’s Not: This plan is not intended to be a specific “recipe” for expenditure cuts or revenue increases: this needs to be determined on a case-by- case basis. Preparing detailed reduction options before they are truly needed is not recommended for three reasons: If not taken seriously, quality thought will not be given to them. If taken seriously, this is likely to result in needless anxiety, and sends a conflicting message if “times are good.” And even if these were not constraints, they would have a short shelf-life: needs and priorities change over time. However, this plan does set forth the foundation of principles and values upon which specific responses will be based. Triggers This plan will be “triggered” by any of the following: Any adverse fiscal circumstances as determined by the City Manager, such as: Natural or human-made disasters. State budget takeaways. Large, unexpected costs. Economic downturns. Whenever there are two consecutive quarters of adverse fiscal results in one or more the City’s top five General Fund revenues: Sales tax Property tax Transient occupancy tax (TOT), Utility users tax Vehicle license fee (VLF) “swap” Adverse results include: Actual declines in revenues. Significant variances from projected revenues. General Fund Focus This plan is focused on the General Fund, but Enterprise Funds (water, sewer, parking, transit and golf) will also fully participate for two key reasons: We are one organization: all parts need to participate. It is strategically important to limit Enterprise Fund rate increases (rate decreases would also be nice) at a time when we may be considering General Fund revenue increases. Key Plan Elements There are six key elements to this plan: Maintaining minimum fund balance at policy levels. Following other key budget and fiscal policies. Monitoring the City’s fiscal health on an ongoing basis. Assessing the challenge: short or long-term problem? Attachment 1 B2 - 7 Fiscal Health Contingency Plan Page 2 Identifying options. Preparing and implementing the action plan. Minimum Fund Balance First Line of Defense in Adverse Circumstances Maintaining minimum fund balances at policy levels: Allows continued operations and projects in responding to short-term problems. Provides a bridge—“breathing room”—in addressing longer-term problems while comprehensive response plans are developed. This is especially important under Proposition 218, since there are limited opportunities to implement new revenues. Other Key Budget and Fiscal Policies Following our other key budget and fiscal policies will prevent problems to begin with, and keep them from getting bigger when they do happen. These are set forth in Section B of the Financial Plan, and include: Balanced budget Conservative investment practices Diversified revenues User fee cost recovery Enterprise funds New development pays its own way Limited use of debt financing Fleet replacement Contracting for services Productivity improvements Fiscal Health Monitoring In accordance with our budget and fiscal policies, the City will develop and implement effective ongoing systems for reporting and monitoring our fiscal condition. These include: Interim Reporting Reliable automated financial management system On-line access organization-wide via the network Monthly financial reports Quarterly “Newsletter” (provided electronically to all employees) Capital Improvement Plan (CIP) project-to-date expenditure report Mid-Year Budget Review Special Reports: Sales Tax, TOT, Investments Annual Reporting Preparing audited financial statements in accordance with generally accepted accounting principles and highest standards. Assess: Short or Long-Term Problem? Different Strategies for Different Problems Short-Term: One-time event or downturn that is not likely to continue indefinitely. “One-time” fixes are an appropriate response for “one-time” problems. Long-Term: Ongoing downturn in revenues or increases in costs that are systemic. In this case, “one-time” fixes won’t work: this requires new ongoing revenues or ongoing expenditure reductions. Assessment: Short-Term Problem Hiring Chill. City Manager approval will be required to fill vacant regular positions. To fill a vacant position, department heads must demonstrate that it is necessary in meeting public health, safety or other high-priority service needs that cannot be met on an interim basis through contract, overtime or temporary staffing. In implementing the “chill,” the goal is not just short-term savings, but preserving future options if the problem turns-out to be ongoing. Attachment 1 B2 - 8 Fiscal Health Contingency Plan Page 3 Travel Chill. We will limit travel and training: City Manager approval will be required for all Travel Authorizations. CIP Project Deferrals. The CIP Review Committee will identify candidate projects for possible deferral or deletion. “One-Time” Operating Cost Review. The Budget Review Team will identify special projects in the operating budget for possible deferral or deletion. Fund Balance. The City will consider use of fund balance below policy levels. Other. The City will consider other short-term expenditure curtailments as appropriate. Assessment: Long-Term Problem Implement “short-term” actions. (This follows the first rule of holes: when you find yourself in one, stop digging.) Prepare long-term forecast to define the problem. Prepare revenue increase and expenditures reduction options tailored to problem definition via the forecast. It is likely to take 3-6 months to prepare plans; and another 3-6 months to implement them. This underscores the importance of strong fund balance and short-term expenditure reductions to create the time needed to prepare and implement reasonable long-term plans. Identify Options In the long-term, there are only two basic budget- balancing options: Increase revenues. Reduce expenditures (and related service levels). In the short-term, use of fund balance is an option, but not it is not a viable long-term solution: we can only spend reserves once. An exception is the strategic use of fund balance that reduces future year operating costs or increases ongoing revenues. Expenditure Reduction Options Tough But Simple Fact: Meaningful ongoing expenditure reductions require reductions in regular staff costs, including public safety personnel: . 85% of General Fund costs are operating. 80% of General Fund operating costs are for staffing. 90% of General Fund staffing costs are for regular staffing. Over 50% of General Fund staffing costs are for public safety. General Strategy Department Heads are responsible for crafting operating expenditure reduction options that: Are real and “doable.” Reflect the least service impacts to the community—no game-playing in proposing least-likely reductions and non-starters. Are ongoing. Describe service impacts. Are within the City’s ability to do independently—no speculative reductions contingent upon actions by others. Can be implemented within three months after adoption. Are net of any related revenues from fees or grants. Maintain essential facilities, infrastructure and equipment at reasonable levels—no deferred maintenance posing as genuine cost reductions. Attachment 1 B2 - 9 Fiscal Health Contingency Plan Page 4 Reflect participation from throughout their organization. Option “Targets” Targets for surfacing operating expenditure reduction options will generally be: Based on percentage reductions from current operating budgets, less significant one-time costs. The same for all departments. Targets are likely to exceed the “gap” identified in forecast in order to surface an array of reasonable policy choices based on priority considerations, and not driven by arbitrary across-the-board decreases. Stated simply, like making choices at a restaurant, making priority-based decisions depends on having more options on the menu than we plan on ordering. Operating expenditure reductions are not likely to be sole “budget-balancers,” but identifying their service impact is critical to attracting support for new revenues and other mitigation strategies. Key Principles in Preparing Operating Expenditure Reduction Options Any service reductions will be balanced, and ensure that highest priority services are retained. Reductions will be based on service priorities, not vacant positions: attrition is a helpful tactic, but will not be the driving strategy in reducing costs. On the other hand, one of the key purposes of the “hiring chill” is to create flexibility in making reductions based on priorities while mitigating the need for lay-offs. Our focus will be on retaining “front-line” core services, and reducing services with the least impact on the community at-large. On the other hand, we need to preserve “organizational” infrastructure, and ensure that appropriate and necessary internal review functions remain. CIP Projects The CIP Review Committee will be responsible for identifying ongoing reduction opportunities. Projects intended to maintain existing infrastructure and facilities will generally have higher priority over “new” facilities. Likely exceptions include: Direct adverse impacts to public health and safety. Outstanding contractual commitments. Significant outside resources or related one- time revenues. Revenues: Limited Options The Budget Review Team, working with representatives from the operating departments, will have the lead responsibility for identifying revenue options. However, it is likely that any new significant revenues will require voter approval under Proposition 218; and most likely, this election cannot be held until the next regular municipal election (November of even-numbered years). There are two exceptions when revenue elections can be held at any time: Emergency declared by unanimous vote of the Council. Two-thirds voter approval for “earmarked” revenues. Nonetheless, there may be options for increased user fees, fines or use of property. (On the other hand, if these were easy to do, we would probably have already done them!) Employees throughout the organization will be encouraged to surface revenue- raising options, with the recognition that expenditure reductions are likely to play the play the leading role in balancing the budget. Significant New Revenues: Voter Support Required Voter approval will require time for effective preparation before a measure is placed on the ballot. Attachment 1 B2 - 10 Fiscal Health Contingency Plan Page 5 Critical Success Factor: An effective, community-based group that will work hard to pass measure. Legislative Advocacy Depending on the reason for the adverse circumstances (and especially if they are driven by state or federal budget actions), the City will work closely with its elected representatives and others (such as the League of California Cities) in mitigating service (and related cost) reductions. Unlikely Long-Term Budget Balancers Fund balance below policy levels. Using fund is balance is a one-time course of action; it cannot fix a structural imbalance. Significant reductions in training. With fewer employees, it will be even more important to ensure that we have a highly-skilled, well- trained work force. Involvement and Participation The City will actively solicit and encourage participation by key stakeholders in the budget- balancing process including: Organization as a whole. Employee associations. Community groups. This will require effective and ongoing communication with them. The Budget-Balancing Paradox. Balancing the budget and closing the “forecast gap” from a strictly numbers perspective is easy. However, after cutting CIP projects, reducing staff, and negotiating and implementing employee concessions, emerging from the process with a vibrant, high-morale, high- productivity organization is hard. Which leads to the budget-balancing paradox: at a time when the organization is at its nadir with downsizing, the resulting smaller organization needs its employees to be even more energized, fired-up and motivated to perform. In our experience, there is only one way to beat this paradox: believing that the process used in communicating with employees and meaningfully engaging them in finding solutions matters. To use Steven Coven’s metaphor, how we go about this process is an opportunity to make deposits in our credibility bank, not just withdrawals. It’s an opportunity to both show our organizational character and values, and to build them. Employee Involvement Department heads will encourage employee participation and involvement in preparing expenditure reduction options. The City will strive to identify likely position reductions resulting from this plan six months before implementation in order to: Be straight forward with affected employees about their employment outlook. Provide transfer opportunities. Allow affected employees a reasonable amount of time to make other plans. Key Value: Respect. There are downsides to this approach, and many organizations consciously keep force-reduction actions under wraps as long as possible because of them. However, treating employees with respect means informing them about City plans that affect them as soon as possible. It also means sharing the hard facts (and consequences) in a straightforward and timely way, even if this is painful at times for the organization. Because ultimately, respect means believing (contrary to Jack Nicholson's Marine Colonel Jessup in A Few Good Men) that employees can handle the truth. Communication Strategies The following identifies possible communication strategies with employees and the community. Employees Ongoing employee briefings with City Manager, Finance & IT Director and Department Heads. Attachment 1 B2 - 11 Fiscal Health Contingency Plan Page 6 Ongoing updates via voice mail or email. Periodic “newsletters” and “rumor control corner” on the Intranet Ongoing briefings with employee association representatives. Special organization-wide briefings as appropriate. Community Viewpoint articles in The Tribune and editorial board briefings. New releases. Presentations to interested community groups. Periodic “newsletters” via direct mail or utility billing inserts. Web site updates. Community forums and workshops. Possible Formation of Community Advisory Group We may form an “ad hoc” advisory group depending on the circumstances, with careful consideration of: When should they become involved in the process? Who should be on it? What’s their role? Finalize and Implement Action Plan With advice from Department Heads and the Budget Review Team, the City Manager is responsible for preparing the recommended action plan. Council approval is required for implementation. Finance will closely monitor results of the action plan in achieving its goal, and will quickly report any significant deviations to the City Manager and Council. SUMMARY While the specifics of both the process will change based on the circumstances, having a clear strategy in place as the foundation for decision-making in tough fiscal times that reflects our organizational values has been a key factor in the City’s success in preserving our long-term fiscal and our organizational vitality. Attachment 1 B2 - 12 Measure Y Impact Analysis This report is intended to portray the potential impacts of an annual loss of revenue in excess of $6.5 million. It does not reflect a proposed budget or Financial Plan for 2015-17. The analysis provided here is representative of the impacts that can be expected from the loss of such a large portion of the City’s revenue stream. If such a reduction is required the actual reductions will be developed as part of the 2015-17 Financial Planning process. In the event the Measure Y revenue stream is not renewed, the Fiscal Health Contingency Plan would be activated as part of the 2015-17 Financial Plan process in order to address a loss of revenue in 2015-16 and beyond. This will allow the Council and community an opportunity to thoroughly analyze the City’s current financial forecast and make informed decisions to address the revenue loss based on priorities and community needs defined during the development of the 2015-17 Financial Plan. The development of the 2015-17 Financial Plan would include: Feedback from residents and other community members would be solicited to identify their service priorities and needs through the Community Forum, advisory body meetings, and additional meetings or workshops that may be scheduled in light of the need to make significant budget reductions. During the Community Forum, the residents and other community stakeholders will be asked to participate in a budget reduction exercise, in addition to the normal process of soliciting ideas and input for development of new Major City Goals. The Budget Bulletin Survey that the City distributes in advance of the Community Forum will include questions to help City decision makers gauge community priorities in an environment where budget reductions have to be made. A major component of the Council’s Goal-Setting Workshop will focus on the need for budget reductions so that staff can get initial direction from the Council on where to focus its efforts in crafting a budget proposal and Major City Goal work programs that meet the challenge of reducing expenditures to match reduced revenues. It is anticipated that this session would be wide-ranging and include all cost drivers including operating program (including staffing) and capital improvement plan costs. Consistent with past practice, City employees will be engaged in identifying budget reductions and alternative service delivery methods with the goal of minimizing impacts to the community. Department heads will evaluate the most promising cost reduction strategies and make a recommendation to the City Manager on those they believe should be implemented. This decision making process will involve the service prioritization methodology developed during the 2011-13 Financial Plan. These recommendations will be presented to the City Council as part of the Strategic Budget Direction process so that the necessary direction can be provided to staff to produce a balanced Preliminary Financial Plan. This is consistent with the successful processes that were implemented for many cycles during which budget reductions were necessary including most recently for the 2009-11 and 2011-13 Financial Plans. 1 Attachment 2 B2 - 13 Measure Y Impact Analysis - Slate 1: Department Amount FTE Impact Statement Operating Programs: Administration - - N/A - Department does not receive Measure Y funding City Attorney - - N/A - Department does not receive Measure Y funding Community Development 277,887 3.50 Community Development's Slate 1 reduces 3.5 staff, including 3 staff in the Building and Safety program and 0.5 staff in Community Development Administration. These actions would limit responses to public health and safety complaints, eliminate all proactive enforcement, increase response times to complaints, and increase the timeframe for home occupancy clearances. Finance/IT - - N/A - Department does not receive Measure Y funding Fire Department 440,922 3.25 Under Slate 1 the Fire Department would reduce 3.25 positions. The Mechanic Helper position would be reduced to three/fourths time (.75), two firefighter positions and the Deputy Chief position would be eliminated. Reducing the Mechanic Helper position will impact the department's ability to service emergency response apparatus and equipment. This will also shift menial tasks from this position up to the Fire Vehicle Mechanic, and will affect the ability for the Fire and Public Works Departments to share personnel resources for service, training, and succession planning. The impact of reducing two Emergency Response firefighter positions includes a reduction in the staffing level of two emergency response crews. The net result is a reduction in the scope and scale of service of that crew with foreseeable impacts to the City's ability to provide emergency medical care and rescue operations for sick and/or injured citizens; fire suppression activities in businesses, residential structures, and the Open Space; and non-emergency-response duties such as equipment and facilities maintenance, safety inspections, public education and outreach, CERT training, and other duties. The impact of reducing the Deputy Chief position includes elimination (or reassignment to staff already at capacity) of Emergency Response training program management, budget development and execution, City disaster preparedness, CERT, and Emergency Response supervision and leadership. Eliminating the Deputy Chief would negatively impact the span of control and operational capacity in the Fire Department. Human Resources - - N/A - Department does not receive Measure Y funding Total reduction of $6,951,188 including $2,940,788 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to General Fund departments based on the amount of Measure Y benefit they currently receive. 2 Attachment 2 B2 - 14 Measure Y Impact Analysis - Slate 1: Department Amount FTE Impact Statement Total reduction of $6,951,188 including $2,940,788 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to General Fund departments based on the amount of Measure Y benefit they currently receive. Parks & Recreation 65,230 0.70 Parks and Recreation's Slate 1 includes a reduction to existing data processing services associated with Parks and Recreation registration and reservations, the elimination of supplemental Adult Softball participant insurance, the elimination of Jack House Committee promotional funds, the elimination of staffing and programmatic supplies for the Senior Center, the elimination of a facilitator for Youth Services staff trainings, and the elimination of printed Youth Services Handbooks. These reductions will have direct impacts on residents, community partners, Parks and Recreation customers, and staff. The reduction to data processing services will result in increased fees passed on to customers for reservations/registrations for Parks and Recreation programs and facilities. The elimination of supplemental medical insurance for Adult Softball participants could have minimal impact on customers as this approach matches emerging industry trends. The Jack House Committee would no longer receive City funds to promote events at the Historic Jack House and Gardens; the committee would need to utilize other revenue sources and/or seek donations to promote events. With eliminations to the Senior Center program, the Senior Center Executive Board would be required to solicit donations and/or seek volunteers to continue programs, classes, special events and expansion of the technology opportunities at the center. Elimination of a Youth Services training facilitator reduces the opportunities offered to staff providing services that require significant training to keep up with ever- evolving standards and trends. Youth Services Handbooks will continue to be available for download online, however the elimination of printed copies will affect families without computer/internet access. Police Department 1,016,029 8.00 Eliminating eight (8) positions (5 sworn and 3 civilian) from the Police Department would significantly impact both the department and the community. Patrol services would be reduced in the downtown during the daytime hours, a reduction in patrol staffing would increase workloads to other existing staff. Increased workloads could impact their ability to respond to non-emergency calls for service. The department would lose the opportunity to work with at-risk youth in our local schools; the ability to enforce local and countywide drug enforcement activity would be significantly reduced; and the department's effectiveness in responding to neighborhood groups and concerns would be diminished. Internally, the department would realize a significant increase in overtime to cover the loss of a position in dispatch due to minimum staffing standards. Public Works 1,140,720 7.00 Public Works Slate 1 includes reduction of staff and contract services in the divisions of Capital Improvement Plan Engineering, Parks & Landscape Maintenance, and Transportation. Neighborhood traffic management program and traffic operations program report will be eliminated, with bicycle program support reduced and substantial delays to traffic related citizen requests. Some engineering resources will be eliminated with the remaining staff (4 FTE) shifting their project focus from General Fund project management to utility project design to reduce overall utility project CIP costs. Staffing and contract service reductions will cause Administration inquiry response times to slow and assistance to staff will be reduced or eliminated. Sports field preparations, Farmer's Market portable restroom provision, special event support, and park trash pickup will be eliminated and street medians, roadside vegetation maintenance and tree trimming will be reduced, increasing vegetation in the roadway and limb drops and associated damage claims. Shifting of staff from General Fund project management to utility project design will reduce available support for General Fund capital projects, unplanned projects, activities and inquiries. Total Operating 2,940,788 22.45 3 Attachment 2 B2 - 15 Measure Y Impact Analysis - Slate 1: Department Amount FTE Impact Statement Total reduction of $6,951,188 including $2,940,788 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to General Fund departments based on the amount of Measure Y benefit they currently receive. CIP: General Purpose CIP *2,915,991 - Reduces General Purpose CIP by $2.916 million or 85%. Paving is reduced by $1.074 million or 73%. Funding is eliminated for Marsh Street Bridge Replacement, a reduction of $734,000. Storm Drainage System Replacement is cut by $518,000 or 90%. Bicycle, Sidewalk and Pedestrian project funding of $185,000 is eliminated. Transportation Management projects, including City Wayfinding Signs, Neighborhood Traffic Improvements and Traffic Operation Improvement projects, are reduced by $100,000. Fleet Replacement *423,951 - Fleet Replacement CIP is reduced by $423,951 or 68% for 2015-16. This reduction would affect the scheduled fleet purchases for Police, Construction Regulation, Parks Maintenance, IT, Buildings, and Fleet Management. Instead of purchasing vehicles according to the current schedule, the Fleet Supervisor would work with Departments to prioritize Fleet spending. Major Facility Replacement **345,000 - Funding for Major Facility Replacement CIP is eliminated. $345,000 represents 2015-16 funding for Golf Course restroom replacement ($265,000) and Mission Plaza Restroom design ($80,000). The Laguna Lake Golf Course restroom has been evaluated and found to be in need of replacement. The ability of Mission Plaza to host events throughout the year will be impacted due to existing operational issues with the restroom facilities. IT Replacement **125,458 - IT replacement funding is reduced by $125,458 or 76%. This reduction limits the replacement of handheld radios, mobile equipment replacement, storage capacity upgrades and replacement. Open Space Protection CIP **200,000 - Funding for Open Space Protection is eliminated. This would impact the City's ability in the future to make open space acquisitions in the Greenbelt surrounding the City. Total CIP 4,010,400 Total Slate 1 6,951,188 22.45 * Reductions to General Purpose CIP and Fleet Replacement are the same under Slates 1 & 2. Slate 3 reductions are lower for these funds. ** Reductions to Major Facility Replacement, IT Replacement, and Open Space are the same for all three slates. 4 Attachment 2 B2 - 16 Measure Y Impact Analysis - Slate 2: Department Amount FTE Impact Statement Operating Programs: Administration 172,560 - The Administration Department's Slate 2 includes reductions to contract services, external support, and reductions to training/education, and supplies. Reductions to contract services will result in more in-house work efforts. This will create longer timeframes for operating program and project implementation, as well as tradeoffs for which projects get accomplished, by the City Manager's Office, City Clerk, Natural Resources, Economic Development and Tourism program areas. Reductions to external support will result in reduced support for community cultural partners. Other reductions will result in less staff training/education, less supplies for maintaining two high-functioning offices, and significant cuts to extracurriculars like Council meeting dinners and the Advisory Body Gala. City Attorney 40,282 0.24 Under Slate 2 the City Attorney Department would reduce funds for outside council for prosecution of code enforcement cases and reduce administrative staff. Reduction in available resources to obtain outside legal counsel/conflict counsel services will impact the ability to quickly direct resources to code enforcement matters without returning to Council or City Manager with funding requests. Reduction in administrative staff would create administrative and processing slowdowns in court filings, document preparation and review, legislative platform issues response; redirection of attorney time to routine administrative tasks and office management. Community Development 90,184 1.00 Community Development's Slate 2 includes a reduction of 1 staff in the Building and Safety program. This action would reduce ability to initiate proactive code enforcement, increase response times for property maintenance complaints, and reduce the frequency and intensity of neighborhood patrols. Finance / IT 237,129 0.50 Finance and IT's Slate 2 includes a reduction in PC purchases and technology replacements, reduction in training programs, and a reduction of 0.5 Administrative Assistant position. Reduction of PC and technology replacements would require that we keep hardware in operation longer, which could lead to incompatibility and equipment failures. That in turn would create an increase in trouble reports. Reduction in FIT department and Citywide training will impact staff efficiency and will also impact users knowledge of applications. This will have an adverse affect on project timelines. Reduction of 0.5 Admin Assistant position will create increased dependence on outside departments for the completion of financial tasks, particularly preparation of the budget. Total reduction of $6,951,360 including $2,940,960 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget. 5 Attachment 2 B2 - 17 Measure Y Impact Analysis - Slate 2: Department Amount FTE Impact Statement Total reduction of $6,951,360 including $2,940,960 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget. Fire 559,193 4.25 Under slate 2 the Fire Department would reduce 4.25 positions and Fire Prevention staff training: the Mechanic Helper position would be reduced to three-fourths time (.75), three firefighter positions and the Deputy Chief position would be eliminated. Reducing the Mechanic Helper position will impact the department's ability to service emergency response apparatus and equipment. This will also shift menial tasks from this position up to the Fire Vehicle Mechanic, and will affect the ability for the Fire and Public Works Departments to share personnel resources for service, training, and succession planning. The impact of reducing three Emergency Response firefighter positions includes a reduction in the staffing level of three emergency response crews. The net result is a reduction in the scope and scale of service of that crew with foreseeable impacts to the City's ability to provide emergency medical care and rescue operations for sick and/or injured citizens; fire suppression activities in businesses, residential structures, and the Open Space; and non-emergency-response duties such as equipment and facilities maintenance, safety inspections, public education and outreach, CERT training, and other duties. The impact of reducing the Deputy Chief position includes elimination (or reassignment to staff already at capacity) of Emergency Response training program management, budget development and execution, City disaster preparedness, CERT, and Emergency Response supervision and leadership. Eliminating the Deputy Chief would negatively impact the span of control and operational capacity in the Fire Department. The impact of reducing the Fire Prevention training funds includes the elimination all outside opportunities to educate and certify the staff, whose technical responsibilities include such dynamic activates as fire plan review for development/redevelopment, building safety inspections including high target hazard occupancies, and fire cause and origin investigations. Human Resources 60,734 - Human Resources Slate 2 includes elimination of the Wellness program and reduction in funding for the Human Relations Commission Grants in Aid. The goal of the employee wellness program is to take proactive measures to enhance the health and wellbeing of employees. The potential impact of eliminating this program is increased time away from work due to injury and/or illness, reduced productivity due to stress or other factors, and increased turnover due to reduced job satisfaction. Many studies have suggested that employee wellbeing has a direct impact on the success of any organization. The grants in aid program is administered by the Human Relations Commission and provides funding to local non-profit agencies that promote the economic and social well-being of its citizens. Currently, grants are awarded to fund programs such as homeless prevention, hunger and malnutrition prevention, supportive physical and mental health services, services for seniors and people with disabilities, and supportive services for youth and their development; especially targeted to youth at risk. The proposed reduction would decrease grant funding by approximately 35%. The impact of this reduction would be a decrease in services for community members in need. 6 Attachment 2 B2 - 18 Measure Y Impact Analysis - Slate 2: Department Amount FTE Impact Statement Total reduction of $6,951,360 including $2,940,960 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget. Parks & Recreation 135,085 2.90 Parks and Recreation's Slate 2 includes a reduction to existing data processing services associated with Parks and Recreation registration and reservations, the elimination of supplemental Adult Softball participant insurance, the elimination of Jack House Committee promotional funds, the elimination of staffing and programmatic supplies for the Senior Center, the elimination of a facilitator for Youth Services staff trainings, the elimination of the Teen Program, and a reduction to staffing within the Parks and Recreation Administration Division. These reductions will have direct impacts on residents, community partners, Parks and Recreation customers, and staff. The reduction to data processing services will result in increased fees passed on to customers for reservations/registrations for Parks and Recreation programs and facilities. The elimination of supplemental medical insurance for Adult Softball participants could have minimal impact on customers as this approach matches emerging industry trends. The Jack House Committee would no longer receive City funds to promote events at the Historic Jack House and Gardens; the committee would need to utilize other revenue sources and/or seek donations to promote events. With eliminations to the Senior Center program, the Senior Center Executive Board would be required to solicit donations and/or seek volunteers to continue programs, classes, special events and expansion of the technology opportunities at the center. Elimination of a Youth Services training facilitator reduces the opportunities offered to staff providing services that require significant training to keep up with ever- evolving standards and trends. The elimination of the Teen Program at Laguna Middle School will impact over 100 teens served weekly and currently no other services of this nature are available for this age group. Studies have shown these programs are diversionary in nature and without them negative and criminal behaviors increase. A reduction in staffing in the Parks and Recreation Administration Division would impact the entire Department by reducing community outreach, marketing and design projects needed to support and promote facilities and programs (including Public Art, Youth Sports, Special Events, and Youth Services), which could reduce programmatic participation. Police 949,895 7.00 Eliminating seven (7) positions (5 sworn and 2 civilian) from the Police Department would significantly impact both the department and the community. Patrol services would be reduced in the downtown during the daytime hours, a reduction in patrol staffing would increase workloads to other existing staff. Increased workloads could impact their ability to respond to non-emergency calls for service. The department would lose the opportunity to work with at-risk youth in our local schools; the ability to enforce local and countywide drug enforcement activity would be significantly reduced; and the department's effectiveness in responding to neighborhood groups and concerns would be diminished. Public Works 695,899 2.00 Under Slate 2 the Public Works Department would reduce staffing in the division of Capital Improvement Project (CIP) Engineering. In addition, 4 engineering staff will shift their project focus from General Fund project management to utilities project design to reduce overall utility project CIP costs. Reduction of staffing in the CIP Engineering program is to align with a reduction in CIP. This will reduce ability to respond to unplanned projects, activities, and inquiries. Shifting of staff from General Fund project management to utility project design will also reduce available support for General Fund capital projects, unplanned projects, activities and inquiries. Total Operating 2,940,960 17.9 7 Attachment 2 B2 - 19 Measure Y Impact Analysis - Slate 2: Department Amount FTE Impact Statement Total reduction of $6,951,360 including $2,940,960 in operating reductions and $4,010,400 in CIP reduction, based on historical Measure Y allocation of 60% CIP and 40% operating. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget. CIP: General Purpose CIP*2,915,991 - Reduces General Purpose CIP by $2.916 million or 85%. Paving is reduced by $1.074 million or 73%. Funding is eliminated for Marsh Street Bridge Replacement, a reduction of $734,000. Storm Drainage System Replacement is cut by $518,000 or 90%. Bicycle, Sidewalk and Pedestrian project funding of $185,000 is eliminated. Transportation Management projects, including City Wayfinding Signs, Neighborhood Traffic Improvements and Traffic Operation Improvement projects, are reduced by $100,000. Fleet Replacement*423,951 - Fleet Replacement CIP is reduced by $423,951 or 68% for 2015-16. This reduction would affect the scheduled fleet purchases for Police, Construction Regulation, Parks Maintenance, IT, Buildings, and Fleet Management in 2015-16. Instead of purchasing vehicles according to the current schedule, the Fleet Supervisor would work with Departments to prioritize Fleet spending. Major Facility Replacement**345,000 - Funding for Major Facility Replacement CIP is eliminated. $345,000 represents 2015-16 funding for Golf Course restroom replacement ($265,000) and Mission Plaza Restroom design ($80,000). The Laguna Lake Golf Course restroom has been evaluated and found to be in need of replacement. The ability of Mission Plaza to host events throughout the year will be impacted due to existing operational issues with the restroom facilities. IT Replacement**125,458 - IT replacement funding is reduced by $125,458 or 76%. This reduction limits the replacement of handheld radios, mobile equipment replacement, storage capacity upgrades and replacement. Open Space Protection**200,000 - Funding for Open Space Protection is eliminated. This would impact the City's ability in the future to make open space acquisitions in the Greenbelt surrounding the City. Total CIP 4,010,400 Total Slate 2 6,951,360 17.9 * Reductions to General Purpose CIP and Fleet Replacement are the same under Slates 1 & 2. Slate 3 reductions are lower for these funds. ** Reductions to Major Facility Replacement, IT Replacement, and Open Space are the same for all three slates. 8 Attachment 2 B2 - 20 Measure Y Impact Analysis - Slate 3: Department Amount FTE Impact Statement Operating Programs: Administration 143,800 - The Administration Department's Slate 3 includes reductions to contract services, external support, and reductions to training/education, and supplies. Reductions to external support would be less if Slate 3 is chosen versus Slate 2. Reductions to contract services will result in more in-house work efforts. This will create longer timeframes for operating program and project implementation, as well as tradeoffs for which projects get accomplished, by the City Manager's Office, City Clerk, Natural Resources, Economic Development and Tourism program areas. Reductions to external support will result in reduced support for community cultural partners. Other reductions will result in less staff training/education, less supplies for maintaining two high-functioning offices, and significant cuts to extracurriculars like Council meeting dinners and the Advisory Body Gala. City Attorney 33,569 0.15 Under Slate 3 the City Attorney Department would reduce funds for outside council for prosecution of code enforcement cases and reduce administrative staff. Reduction in available resources to obtain outside legal counsel/conflict counsel services will impact the ability to quickly direct resources to code enforcement matters without returning to Council or City Manager with funding requests. Reduction in administrative staff would create administrative and processing slowdowns in court filings, document preparation and review, legislative platform issues response; redirection of attorney time to routine administrative tasks and office management. Community Development 75,153 1.0 Community Development's Slate 3 includes a reduction of 1 staff in the Building and Safety program. This action would reduce ability to initiate proactive code enforcement, increase response times for property maintained complaints, and reduce the frequency and intensity of neighborhood patrols. Finance/IT 197,607 - Finance and IT's Slate 3 includes a reduction in PC purchases and technology replacements, and a reduction in training programs. Reduction of PC and technology replacements would require that we keep hardware in operation longer, which could lead to incompatibility and equipment failures. That in turn would create an increase in trouble reports. Reduction in FIT department and Citywide training will impact staff efficiency and will also impact users knowledge of applications. This will have an adverse affect on project timelines. Total reduction of $6,906,800 including $2,450,800 in operating reductions, $2,228,000 in CIP reduction, and $2,228,000 in compensation reductions. Reductions were assigned at 33% operating, 33% CIP, and 33% compensation. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget, and were increased to 110% to provide options. 9 Attachment 2 B2 - 21 Measure Y Impact Analysis - Slate 3: Department Amount FTE Impact Statement Total reduction of $6,906,800 including $2,450,800 in operating reductions, $2,228,000 in CIP reduction, and $2,228,000 in compensation reductions. Reductions were assigned at 33% operating, 33% CIP, and 33% compensation. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget, and were increased to 110% to provide options. Fire Department 465,994 3.5 Under slate three the Fire Department would reduce 3.5 positions. The Mechanic Helper position would be reduced to half time (.50), two firefighter positions and the Deputy Chief position would be eliminated. Reducing the Mechanic Helper position will impact the department's ability to service emergency response apparatus and equipment. This will also shift menial tasks from this position up to the Fire Vehicle Mechanic, and will affect the ability for the Fire and Public Works Departments to share personnel resources for service, training, and succession planning. The impact of reducing two Emergency Response firefighter positions includes a reduction in the staffing level of two emergency response crews. The net result is a reduction in the scope and scale of services of that crew with foreseeable impacts to the City's ability to provide emergency medical care and rescue operations for sick and/or injured citizens; fire suppression activities in businesses, residential structures, and the Open Space; and non-emergency-response duties such as equipment and facilities maintenance, safety inspections, public education and outreach, CERT training, and other duties. The impact of reducing the Deputy Chief position includes elimination (or reassignment to staff already at capacity) of Emergency Response training program management, budget development and execution, City disaster preparedness, CERT, and Emergency Response supervision and leadership. Eliminating the Deputy Chief would negatively impact the span of control and operational capacity in the Fire Department. Human Resources 50,611 - Human Resources Slate 3 includes elimination of the Wellness program and reduction in funding for the Human Relations Commission Grants in Aid. The goal of the employee wellness program is to take proactive measures to enhance the health and wellbeing of employees. The potential impact of eliminating this program is increased time away from work due to injury and/or illness, reduced productivity due to stress or other factors, and increased turnover due to reduced job satisfaction. Many studies have suggested that employee wellbeing has a direct impact on the success of any organization. The grants in aid program is administered by the Human Relations Commission and provides funding to local non-profit agencies that promote the economic and social well-being of its citizens. Currently, grants are awarded to fund programs such as homeless prevention, hunger and malnutrition prevention, supportive physical and mental health services, services for seniors and people with disabilities, and supportive services for youth and their development; especially targeted to youth at risk. The proposed reduction would decrease grant funding by approximately 28%. The impact of this reduction would be a decrease in services for community members in need. 10 Attachment 2 B2 - 22 Measure Y Impact Analysis - Slate 3: Department Amount FTE Impact Statement Total reduction of $6,906,800 including $2,450,800 in operating reductions, $2,228,000 in CIP reduction, and $2,228,000 in compensation reductions. Reductions were assigned at 33% operating, 33% CIP, and 33% compensation. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget, and were increased to 110% to provide options. Parks & Recreation 112,571 2.2 Parks and Recreation's Slate 3 includes a reduction to existing data processing services associated with Parks and Recreation registration and reservations, the elimination of supplemental Adult Softball participant insurance, the elimination of Jack House Committee promotional funds, the elimination of staffing and programmatic supplies for the Senior Center, the elimination of the Teen Program, and elimination of printed Youth Services Handbooks. The difference between Parks & Recreation Slate 2 & 3 is that Slate 3 does not include a reduction to staffing in the Parks & Recreation Administration Division. These reductions will have direct impacts on residents, community partners, Parks and Recreation customers, and staff. The reduction to data processing services will result in increased fees passed on to customers for reservations/registrations for Parks and Recreation programs and facilities. The elimination of supplemental medical insurance for Adult Softball participants could have minimal impact on customers as this approach matches emerging industry trends. The Jack House Committee would no longer receive City funds to promote events at the Historic Jack House and Gardens; the committee would need to utilize other revenue sources and/or seek donations to promote events. With eliminations to the Senior Center program, the Senior Center Executive Board would be required to solicit donations and/or seek volunteers to continue programs, classes, special events and expansion of the technology opportunities at the center. The elimination of the Teen Program at Laguna Middle School will impact over 100 teens served weekly and currently no other services of this nature are available for this age group. Studies have shown these programs are diversionary in nature and without them negative and criminal behaviors increase. Youth Services Handbooks will continue to be available for download online, however the elimination of printed copies will affect families without computer/internet access. Police 791,579 6.0 Eliminating six (6) positions (5 sworn and 1 civilian) from the Police Department would significantly impact both the department and the community. Patrol services would be reduced in the downtown during the daytime hours, a reduction in patrol staffing would increase workloads to other existing staff. Increased workloads could result in their ability to respond to non-emergency calls for service. The department would lose the opportunity to work with at-risk youth in our local schools; the ability to enforce local and countywide drug enforcement activity would be significantly reduced. Public Works 579,916 1.0 Under Slate 3 the Public Works Department would reduce staffing in the division of Capital Improvement Project (CIP) Engineering. In addition, 4 engineering staff will shift their project focus from General Fund project management to utilities project design to reduce overall utility project CIP costs. Reduction of staffing in the CIP Engineering program is to align with a reduction in CIP. This will reduce ability to respond to unplanned projects, activities, and inquiries. Shifting of staff from General Fund project management to utility project design will also reduce available support for General Fund capital projects, unplanned projects, activities and inquiries. Total Operating 2,450,800 13.9 11 Attachment 2 B2 - 23 Measure Y Impact Analysis - Slate 3: Department Amount FTE Impact Statement Total reduction of $6,906,800 including $2,450,800 in operating reductions, $2,228,000 in CIP reduction, and $2,228,000 in compensation reductions. Reductions were assigned at 33% operating, 33% CIP, and 33% compensation. Operating reductions are apportioned to all General Fund departments based on their proportion of the General Fund budget, and were increased to 110% to provide options. CIP: General Purpose CIP*1,233,591 - Slates 3 reduces General Purpose CIP by $1.233 million, representing 36% of the 2015-16 budget for this fund. Paving projects are reduced by $664,300 or 45%. Storm Drainage System Replacement is cut by $228,000 or 39%. Pedestrian and Bicycle Path funding is reduced by $86,000 or 59%. Transportation Management projects, including City Wayfinding Signs, Neighborhood Traffic Improvements and Traffic Operation Improvement projects, are reduced by $70,000. Fleet Replacement*323,951 - Fleet Replacement CIP is reduced by $323,951 or 52% for 2015-16. This reduction would affect the scheduled fleet purchases for Police, Construction Regulation, Parks Maintenance, IT, Buildings, and Fleet Management in 2015-16. Instead of purchasing vehicles according to the current schedule, the Fleet Supervisor would work with Departments to prioritize Fleet spending. Major Facility Replacement**345,000 - Funding for Major Facility Replacement CIP is eliminated. $345,000 represents 2015-16 funding for Golf Course restroom replacement ($265,000) and Mission Plaza Restroom design ($80,000). The Laguna Lake Golf Course restroom has been evaluated and found to be in need of replacement. The ability of Mission Plaza to host events throughout the year will be impacted due to existing operational issues with the restroom facilities. IT Replacement**125,458 - IT replacement funding is reduced by $125,458 or 76%. This reduction limits the replacement of handheld radios, mobile equipment replacement, storage capacity upgrades and replacement. Open Space Protection CIP**200,000 - Funding for Open Space Protection is eliminated. This would impact the City's ability in the future to make open space acquisitions in the Greenbelt surrounding the City. Total CIP 2,228,000 13.85 Compensation Reductions 2,228,000 - A 5.9% reduction in General Fund staffing costs is required in order to realize an aggregate savings of $2.228 million. Personnel cost reductions must be bargained for and may include such actions as salary reductions or reductions to the City's contribution for retirement and/or health care benefits. In order to address the fact that personnel cost reductions can not become effective immediately upon adoption of the budget, the use of General Fund reserves, excess revenues, prior carryovers, or other operating cost reductions may be required to generate savings ahead of the actual personnel cost reductions becoming effective. Total Compensation 2,228,000 Total Slate 3 6,906,800 13.85 * Reductions to General Purpose CIP and Fleet Replacement are the same under Slates 1 & 2. Slate 3 reductions are lower for these funds. ** Reductions to Major Facility Replacement, IT Replacement, and Open Space are the same for all three slates. 12 Attachment 2 B2 - 24