HomeMy WebLinkAbout07-15-2014 b2 PPP Measure Y Contingency Plan and Impact Analysis-FINAL (2).pdfMeasure Y Contingency Plan and
Impact Analysis
July 15, 2014
Wayne Padilla, Director of Finance & IT
Joe Lamers, Budget Manager
Recommendation
Receive an update on the Measure Y Contingency
Planning Process, including the presentation of an
impact analysis resulting from the loss of 12% of the
General Fund revenue base
No specific action requested on items contained in the
impact analysis slates
2
Background
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:
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).
3
Background
Measure Y generates over $6.5 million annually
12% of General Fund
Adopted with 8 year life span when approved in 2006
If not renewed, the revenue stream will end March 2015
City Council approved $1.7 million contingency
reserve at Mid-Year budget update to offset potential
revenue loss in last quarter of FY 2014-15
Impact of revenue loss would be felt in 2015-16
4
Background
At the January 21, 2014 meeting, Council directed
staff to prepare three slates of options to reflect
potential impacts that may result if Measure Y is not
renewed
The three proposed slates provide examples of
impacts from the loss of such a large portion of the
City’s revenue stream
These examples are not intended to be “decision
points”
A variety of different options will likely be considered after
taking into account all aspects of contingency planning
process
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Slate Creation Process
Slates are not presented in a priority order
Allocation of targets follows Council direction from
January 21st meeting
Reduction targets distributed using 2013-14 Measure
Y revenue estimate of $6.7 million
Operating program reductions increased by 10%
Departmental costs estimated based on 2013-14
budgeted expenditures
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Slate Composition
Slate 1:
60% CIP, 40% operating, based on historical use of Measure Y
Operating reductions apportioned to departments based on the amount of Measure Y monies they receive in 2013-2014
Slate 2:
Also 60% CIP, 40% operating
Operating reductions apportioned to all General Fund departments based on their proportion of operating budget after adjustment for cost allocation and revenues directly related to department
Slate 3:
33% CIP, 33% operating, 33% staffing costs/compensation
Operating reductions apportioned to all General Fund departments
7
2014-15 General Fund Operating
Expenditures
8
Operating Reductions
All slates include:
FTE reductions
Service level reductions
Direct & Indirect
Differing levels of impacts with the three slates, with
significant reductions under each scenario
9
CIP Reductions
Slates 1 & 2 reduce CIP by 85%
Slate 3 reduces CIP by 47%
Shift from preventative maintenance to reconstruction
Projects delayed or abandoned
10
Staffing Cost / Compensation
Reductions (Slate 3)
A 5.9% reduction in General Fund total compensation
is required to realize savings of $2.2 million
Must be bargained for and can not become immediately
effective upon adoption of budget
May require use of reserves, excess revenues,
carryovers, or other operating reductions to generate
savings ahead of actual implementation
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Potential Impacts by Slate
$FTE $FTE $FTE
Operating Reductions:
City Administration -- 172,560 - 143,800 -
City Attorney -- 40,282 0.24 33,569 0.15
Finance / IT -- 237,129 0.50 197,607 -
Human Resources -- 60,734 - 50,611 -
Community Development 277,887 3.50 90,184 1.00 75,153 1.00
Public Works 1,140,720 7.00 695,899 2.00 579,916 1.00
Parks & Recreation 65,230 0.70 135,085 2.90 112,571 2.20
Police 1,016,029 8.00 949,895 7.00 791,579 6.00
Fire 440,922 3.25 559,193 4.25 465,994 3.50
Total Operating 2,940,788 22.5 2,940,960 17.9 2,450,800 13.9
CIP 4,010,400 4,010,400 2,228,000
Staffing Costs / Compensatio --2,228,000
Total Reductions 6,951,188 6,951,360 6,906,800
Slate 1 Slate 2 Slate 3
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Proposed 2015-17 Contingency
Plan Steps
If Measure Y revenue stream is not renewed:
Fiscal Health Contingency Plan would be activated
immediately
Address loss of revenue in 2015-16 and beyond
Development of 2015-17 Financial Plan would be
different from the 2013-15 Plan.
Include Contingency Planning at each step in the process
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2015-17 Contingency Planning
If the Measure Y funding stream is not renewed:
Feedback from residents and community members will be
solicited to identify service priorities through the
Community Forum, advisory body meetings, and
additional meetings or workshops as needed
Community Forum would include budget reduction
exercise in addition to normal process of soliciting input
on new Major City Goals
Budget Bulletin Survey will include questions to help
gauge community priorities in an environment where
budget reductions need to be made
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Proposed 2015-17 Contingency Plan
Steps
Obtain feedback from a variety of interested parties,
including:
Advisory Bodies
Department Heads continue to evaluate most promising
cost reduction strategies and make recommendations
City employees engaged in identifying budget
reductions and alternative service delivery models
Recommendations 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
Consistent with successful processes implemented for
the 2009-11 and 2011-13 Financial Plans
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Summary
Impact Analysis illustrates the scope and scale of
reductions that would have to be made if revenues
are reduced by 12%
Not intended to be “decision points”
If revenue stream is not renewed Fiscal Health Contingency
Plan would be activated immediately
Contingency Planning would be built into each step of the
2015-17 Financial Plan process
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Questions?
17
Appendix
Slate Creation Process
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%
Community Development
Slate 1 - $277,900
Primary impact on building and safety program,
administration
Reduced travel, training, supplies
3.5 FTE reduction
Slate 2 - $90,200
Impact on building and safety program
Reduced travel, training, supplies
1.0 FTE reduction
Slate 3 - $75,200
Impact on building and safety program
Reduced travel, training, supplies (less under slate 3)
1.0 FTE reduction
Public Works
All slates recognize CIP reductions for General Fund
activities
Slate 1 - $1,140,800
4 positions moved to utility project design
Parks Maintenance affected
Transportation Engineering affected
7.0 FTE net reduction (3 temps)
Slate 2 - $695,900
4 positions moved to utility project design
2.0 FTE net reduction
Slate 3 - $579,900
4 positions moved to utility project design
1.0 FTE net reduction
Parks & Recreation
Slate 1 - $65,200
Affects Jack House promotions; Senior Center programs;
reduces staff training; reduces printed material for
programs
.7 FTE reduction (temp position)
Slate 2 - $135,100
Also affects Youth Services and Parks Administration
2.9 FTE reduction (2.2 temp positions)
Slate 3 - $112,600
Restores staffing in Parks Administration
2.2 FTE reduction (temp positions)
Police Department
Slate 1 - $1,016,000
Limit education and outreach activities
8.0 FTE reduction (5 sworn/3 civilian) impacts most
services
Slate 2 - $949,900
Limit education & outreach activities
7.0 FTE reduction (5 sworn/2 civilian)
Slate 3 - $791,600
6.0 FTE reduction (4 sworn/1 civilian)
Fire Department
Slate 1 - $440,900
3.25 FTE reduction impacts emergency response and
training programs
Slate 2 - $559,200
4.25 FTE reduction further impacts emergency response
and training programs
Reduction in Fire Prevention training programs
Slate 3 - $466,000
3.5 FTE reduction
Administration
Slate 1 - No impact
Slate 2 - $172,600
Reductions to contract services; external support;
training/education; supplies
Affects City Manager’s Office, City Clerk, Natural
Resources, Economic Development, Tourism
Slate 3 - $143,800
Same as Slate 2 except reduction to external support
would be less under Slate 3
City Attorney
Slate 1 – No impact
Slate 2 - $43,300
reduction in resources to obtain outside legal council
0.24 FTE reduction
Slate 3 - $33,600
reduction in resources to obtain outside legal council
0.15 FTE reduction
Finance & IT
Slate 1 – N/A
Slate 2 - $237,100
Reduction in PC purchases and technology
replacements, use of equipment leases to lower upfront
purchase expenses
Reduction in training, travel, supplies
0.5 FTE reduction
Slate 3 - $197,600
Same as Slate 2 except 0.5 FTE position is restored
Human Resources
Slate 1 – N/A
Slate 2 - $60,700
Elimination of Wellness Program
Reduces Human Relations Commission Grants in Aid by
35%
Slate 3 - $50,611
Same as Slate 2 except Grants in Aid reduced by 28%
Slate 1 & 2 CIP
$4.0 million reduction or 85% of anticipated General
Fund supported CIP in 2015-16
General Purpose CIP reduced by $2.9M or 85%
Paving reduced by $1.1M or 73%
Marsh St. Bridge project funding eliminated ($734,000)
Bicycle, Sidewalk, Pedestrian project funding
eliminated ($185,000)
Storm Drainage System Replacement reduced by
$518,000 or 90%
Slate 1 & 2 CIP
Fleet Replacement CIP reduced by $424,000 or 68%
Major Facility Replacement funding eliminated
IT Replacement funding reduced by $125,000 or 76%
Open Space Protection funding eliminated
Slate 3 CIP
$2.2 million reduction or 46% of General Fund
supported CIP in 2015-16
General Purpose CIP reduced by $1.2M or 35% instead
of 68%
Marsh St. Bridge funding maintained
Paving reduced by 45% instead of 73%
Fleet replacement reduced by 52% compared to 68%
No change to:
IT replacement reduced by 76%
Major Facility Replacement funding eliminated
Open Space funding eliminated