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HomeMy WebLinkAbout04/11/1988, 1 - FINANCIAL STUDY SESSION MEETING DATE: ���h���►�VNIIIgII,f► llulll city of San tins OBlspo April 11, 1988 COUNCIL AGENDA REPORT ITEM NLJl�18EFi: FROM: William C. Statler, Director of Financ4u SUBJECT: FINANCIAL STUDY SESSION CAO RECOMMENDATION 1 . - Discussion of City financial issues and policies. 2. Review of budgetary process. 3. Receipt and file of FY 1987-88 Mid-Year Budget Report. OVERVIEW As reflected in the Agenda for this meeting, the purpose of this study session is to provide the City Council with a broad overview of policies and issues relating to the City's financial operations. To facilitate discussions at the study session, this report has been prepared using an outline format addressing the following major areas: A. Financial Overview of the City B. Budgetary Process C. Financial Reporting D. Financial Services Study E. Mid-Year Budget Review F. Anticipated 1988-89 Program Highlights G. Review Mayor/Council Work Program for 1988-89 For reference purposes during the meeting, all of the Exhibits referenced in this report have been prepared in a separate document accompanying this memorandum. In addition to the Exhibits, it is requested that the City Council bring the following documents to the study session for reference purposes: • 1987-89 Financial Plan & Approved 1987-88 Budget. 0 Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 1987. • Monthly Financial Report Executive Summary - December 1987 and February 1988. Additional copies of these documents will be available at the meeting. 1- 1 �'��►�N�IVIIIIIII��I=1����I city of san lues osispo COUNCIL AGENDA REPORT A. FINANCIAL OVERVIEW 1 . Major Financial Policies The City has made extensive use of formal , written policies regarding its financial operations. The primary sources for the City's policies include: • City Charter • City Council Policies & Procedures Manual • Municipal Code • Financial Plan • Other specialized policy documents such as the Pavement Management Plan, Purchasing Control Manual, General Plan, Flood Management Policy, and Strategic Plan. The Financial Plan is a major reference document in providing a summary of key financial policies. As provided on pages B-1 through B-6 of the 1987-89 Financial Plan, the following policies are addressed in this• document: Financial Plan Organization Financial Reserves General Revenue Management Appropriation Limitation Parks and Recreation Fees Capital Improvement Management Enterprise Fund Fees and Rates Pavement Management Revenue Distribution Underground Utilities Investments Human Resources Debt Financing 2. Primary Funding Sources and Allocations A summary of City revenues by fund and source based on revised estimates prepared for the FY 1987-88 Mid-Year Budget Review is provided in Exhibit A. 1 . As reflected in this summary, primary funding sources for City programs are as follows: Revised 1987-88 Estimates Percent Amount Of Total Taxes: Sales and use $5,800,000 23.. 1% Property 2,900,000 11 .6 Utility Users 1 ,832,800 7.3 Other 2,477,800 9.9 Service Charges 6,550,800 26.2 Subventions & Grants 3,014,700 12.0 Other Revenues 2,482.100 9.9 Total $25,058,200 100.0% As further reflected in Exhibit A.1 , General Fund revenues account for only 57% of total revenues; 43% of the City's revenues are restricted I— IIIIwI��p��IIIIII������U city of San Luis OBISpo COUNCIL AGENDA REPORT externally or by Charter for specific purposes. Provided in Exhibit A.2 is a summary of funding source allocations as established by the City's Charter, Municipal Code, or Council policy. B. BUDGETARY PROCESS The City's budgetary process reflects a strong commitment to a policy-oriented approach in planning and communicating the City's financial affairs. In outlining the City's budgetary process, the following Exhibits have been prepared: Exhibit B. 1 - Provides an overview of the uses of the City's budget document as a policy, planning, operational, and communications tool . Exhibits B.2, B.3, and B.4 - Provide an overview of the organization of the budget: • Operating and capital budgets/multi-year approach (Exhibit B.2) . • Relationship of functional groupings of City programs and activities (Exhibits B.3 and B.4) . Exhibit B.5 - Provides a framework for discussion of the budget review process. Exhibit B.6 - Provides a tentative budget calendar for FY 1988-89. C. FINANCIAL REPORTING As discussed previously, the City's budgetary process is strongly oriented towards financial planning; although plans may be referenced in financial reporting documents, their primary purpose is to present the City's financial results of operations. The City uses three primary forms of financial reporting: 1 . Interim ReportinP_ Financial and non-financial reports are prepared monthly, quarterly, and semi-annually as follows: • Financial reports are formally prepared and distributed monthly using a "pyramid" approach in summarizing data to ensure the dissemination of financial information to various audiences at the most appropriate level . Additionally, summary and detail information is available from the Department of Finance upon request at any time during the month. • As referenced in the City's Financial Plan, quarterly reports are provided to the City Council regarding the status of major operating program goals and capital projects. m The Financial Plan also provides for the submission of a Mid-Year Report regarding the City's financial position. "./J1 ��� i �uiIIIIIII�P ��lll MY of San Luis OBISp0 COUNCIL AGENDA REPORT 2. Annual Reporting A Comprehensive Annual Financial Report (CAFR) , which includes audited financial statements as required by City Charter, is prepared annually providing the financial results of the City's operations. A summary of the City's annual financial reporting program is provided in Exhibit C. 1 . 3. Generally Accepted Accounting_ Principles Generally accepted accounting principles for local governments, which differ from those for private sector (for-profit) operations, were not authoritatively established until 1979. Provided in Exhibit C.2 is a brief summary of generally accepted accounting principles for local governments; and a description and classification of the City's funds is provided in Exhibit C.3. D. FINANCIAL SERVICES STUDY On February 23, 1988, the City Council authorized the City Administrative Officer to enter into an agreement with the firm of Evensen Dodge for the preparation of a financial services study. The need to further develop financial management tools and strategies for fiscal independence were identified in the 1987-89 Financial Plan as major objectives to be accomplished during the next two years. Specific program efforts related to these two major objectives included: • Evaluating the City's capital needs and financing alternatives. • Identification of revenue sources and funding strategies for capital projects. • Preparation of a cost allocation plan and cost of service study, including an analysis of user fees. • Development and implementation of a comprehensive funding and financing plan. A summary of the workscope for this project is provided in Exhibit D.1; and a brief description of the cost allocation plan is provided in Exhibit D.2. E. MID-YEAR BUDGET REVIEW As noted previously, the preparation of a formal review of the City's financial position on a semi-annual basis is provided for in the Financial Plan. Provided in Exhibit E is the Mid-Year Budget Review originally submitted to the City Council on March 15, 1988, and subsequently consolidated for receipt and file with this study session. It should be noted that the report references as "Attachment C" the September 8, 1987, memorandum from the City Administrative Officer regarding the proposed framework for the budget process. For the purpose of this study session, this memorandum has been provided as Exhibit B.5. ,4 city of San tins OBISpo COUNCIL AGENDA REPORT F. ANTICIPATED 1988-89 PROGRAM HIGHLIGHTS It is anticipated that a number of major programs and projects will be completed or initiated during 1988-89, including: • Annexation Policies • General Plan Update: Land Use Element Circulation Element Open Space Element • Water Management Plan/Source of Supply Golf Course wells Salinas Reservoir Expansion Groundwater well development • Wastewater Treatment Plant and Collection System Upgrade • Financial Services Study: Capital project financing Utility rate review Opportunities for enhanced cost recovery: Operating programs/activities service charges Non-recurring impact fees • Review of Business License and Transient Occupancy Taxes • Continued Implementation of Parking Program • Completion of City/County Library • Higuera Street Widening • Recreation and Senior Center Improvement Projects • Performing Arts Center • Civic Center Improvements In addition to identifying these major program efforts, the 198.7-89 Financial Plan also provides for operating program service enhancements during FY 1988-89 through the scheduled addition of four permanent positions. Pursuant to the City's Human Resources Policy, an evaluation of these positions is currently underway as summarized in Exhibit F. ����i�►��Illllll�li ���lll city of San tins OBISpo fiVffMftftA niis COUNCIL AGENDA REPORT G. MAYOR/COUNCIL WORK PROGRAM FOR 1988-89 As discussed in the City Administrative Officer's memorandum dated September 8, 1987, it is intended that consideration and review of the Council Work Program will become an integral part of the City's budgetary process. To facilitate this review, a status report regarding the 1987-88 Work Program was included with the Mid-Year Budget Review. As a starting point, it is recommended that those programs noted for carry-over into the next year be considered for inclusion in the 1988-89 Work Program. I_� CITY OF SAN LUIS OSISPO 1 1 1 1 t FINANCIAL STUDY SESSION i -- .EXHIBITS 1 1 1 1 1' APRIL 11 1988 1 - 1 CITY OF SAN LUIS OBISPO • FINANCIAL STUDY SESSION EXHIBITS LTABLE OF CONTENTS 1 Page ' Exhibit A.1 Summary of Revenues by Fund and Source 1 ' Exhibit A.2 Summary of Revenue Allocations 2 Exhibit B.1 Uses of the Budget Document 3 - 5 ' Exhibit B.2 Organization of the Budget 6 - 7 Exhibit B.3 Financial Plan "Pyramid" 8• Exhibit B.4 Summary of Major City Functions 9 Exhibit B.5 Framework for the Budget Review Process 1.0 - 12 Exhibit B.6 Tentative Budget Calendar for FY 1988-89 13 Exhibit C.1 Comprehensive Annual Financial Report 14 - 15 Exhibit C.2 Summary of Generally Accepted Accounting 16 - 17 Principles Exhibit C.3 Summary of City Funds 18 Exhibit D.1 Financial Services Study 19 - 20 Exhibit D.2 Cost Allocation Plan 21 - 22 Exhibit E Mid-Year Budget Review 23 - 29 Exhibit F FY 1988-89 New Position Requests 30 f 1 EXHIBIT A.1 1 CITY OF SAN LUIS OBISPO a REVENUES BY FUND AND SOURCE REVISED ESTIMATE FOR FISCAL YEAR 1967-88 Special Capital Whale General Revenue Project Enterprise Rock Percent ' - Fund----------- und-------- -Funds-N------ Funds - Fund-------------Fund Total of Total TAXES: Property 10607000 580,000 191609000 29900,000 11.6 Sales 6 Use 5,8001000 51800,000 23.1 Transient Lodging 122009000 15200,000 4.8 Franchise 4539500 453,500 1.8 ' Business Tax 438,300 66,000 504,300 2.0 Documentary Transfer 100,000 100,000 0.4 Utility Users 11832,800 118327800 7.3 Construction 220,000 220,000 0.9 10,984,600 866,000 11160,000 13,010,600 51.9 LICENSES L PERMITS 208,500 208,500 0.8 FINES L FORFEITURES 398,000 36,000 434,000 1.7 INVESTMENT E PROPERTY: Interest Earnings 616,500 177,000 225,500 448,000 807000 19547,000 6.2 Rents 6 Concessions 9,000 71000 --16,000 _0.1- 6259500 1849000 225,500 448,000 80000 1,563,000 6.2 SUBVENTIONS L GRANTS: Motor Vehicle In-lieu 112705800 1,270,800 5.1 Cigarette Tax In-lieu 1439000 143,000 0.6 Gasoline Tax 486,000 486,000 1.9 ' Sales Tax-Trans (SB325) 402,300 327,600 729,900 2.9 Other Subventions L Grants 118,000 --_ 267,000 - ------- 385,000------1 5 195311600 8885300 2677000 327,600 31014,700 12.0 SERVICE CHARGES 5172900 3979600 2169000 47838,000 51969,500 23.8 TRUST b AGENCY FUND REVENUES 181300 563,000 581,300 2.3 OTHER REVENUES 96,600 51000 1759000 276,600 1.1 ` TOTAL 14,3621900 20409900 2,061,800 5,6491600 643,000 25,058,200 100,0 Exhibit A.2 ' CITY OF SAN LUIS OBISPO a SUMMARY OF REVENUE ALLOCATIONS 1987-88 Original Rud et Estimate PARKS & RECREATION FUND Cost recovery of 40% of recreation programs. . . . . . . . . . . . . . . . . .$ 441,550 ' Allocation of 17.5% of property tax revenues. . . . . . . . . . . . . . . . . 477,750 Interest earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938.600 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,907,900 Note: The Financial Plan (page B-2) provides for a range of cost ' recovery percentages from 33% to 100% depending on the type of activity. BUSINESS IMPROVEMENT AREA (BIA) FUND 100% surcharge added to business tax of businesses located within the BIA district. . . . . . . . . . . . . . . .$ 63,000 Interest earnings and other program revenues. . . . . . . . . . . . . . . . 18,500 GeneralFund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 101 ,500 PARKING FINES: 50% General Fund; 50% Parking Fund (Effective November 1987) ENTERPRISE FUNDS: 100% cost recovery for: Water, Sewer, Parking and Golf Course 10% minimum cost recovery for Transit pursuant to Chapter 4 of the Public Utilities Code. PROPERTY TAKES: General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0% $1,092,000 Capital Outlay Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 1 ,092,000 Library Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 68,250 Parks & Recreation Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 17.5 477,750 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $2.730,000 Allocation Revenue Allocated Percent Base Revenue Transient Occupancy Tax. . . . . 20.0% 920,000 184,000 , Sales Tax. . . . . . . . . . . . . . . . . . . 2.0 5,650,000 113,000 Business Tax. . . . . . . . . . . . . . . . 15.0 408,000 61.000 Total . . . . . . . . . . . . . . . . . . $358.000 -2- ' ' EXHIBIT B.1 ' USES OF THE BUDGET DOCUMENT The budget document can be used for a wide variety of purposes, although there is general consensus in the profession that budgets should serve in the following roles: • Policy Document ' • Financial Plan • Operations Guide • Communications Tool ' The following is a summary of desirable budget features recommended by the Government Finance Officers Association: Budget As A Policy Document: • The document should include a coherent statement of budgetary policies. These may take the form of goals, objectives, strategies, or other mechanisms. m The document should describe and articulate basic policy changes, and explain the substantive impact of policy changes on operations, service levels, and/or finances. ' • The rationale for the policies should be explained. 0 The budget document should explain how policies (particularly new policies and revised policies) will be implemented and monitored. Budget As A Financial Plan: 0 The budget should explain the financial structure and operations of the government. It should explain major revenue sources as Iwell as how funds are organized. • All operating funds and all resources should be included in the L financial plans provided in the budget. This need not mean that all activity be subject to an appropriation budget, but rather, should provide for deliberate financial planning of governmental activities. a The budget document should include projections of the government's financial condition at the end of the proposed fiscal period. 1 ' ' -3 Budget As A Financial Plan (Continued) : ' • The budget document should explain any conditions, or projected events, that require changes in operations in order to ensure ' financial stability or solvency. • The budget should include projections of current year financial activity, and provide a basis for historical comparisons (e.g. , last year, this year, next year) . • The budget should include both an operating and capital t financing element. If a separate capital program exists, the operating budget should explain the relationship between the two documents. 4 The budget should include a consolidated picture of all operations and financing activity, in condensed or aggregated form. ' • The budget should be prepared in such a way that budgetary performance can be measured and accounted for. 0 The budget should address debt management issues, particularly those that affect current and future operations. Budget As An Operations Guide: • The budget should explain the relationship between organizational units and programs, where appropriate. • The budget should include an organizational chart, descriptions of work force organization, and sufficient data regarding past operations to provide a basis for comparison. • The budget should explain how capital spending decisions will affect operations and operating expenditures. • The budget should provide specific objectives and performance measures/targets. If appropriate, timetables and deadlines should be included. • The budget should describe the general directions given to department heads or line managers. Budget As A Communications Tool: • The document should provide summary information suitable for use by the media and the public. i a The document should avoid complex technical language that cannot be understood by the reasonably informed reader. 1 -4- t 1 ' Budget As A Communications Tool (Continued) : • The document should include a transmittal letter or a budget ' message that outlines key policies, strategies etc. • The document should provide a table of contents and/or and index. • A glossary of key terms is recommended. • Basic units of the budget, whether they be funds, programs, departments, or whatever, should be concisely explained. • Simple charts and graphs should be used to highlight key relationships. • The document should disclose sources of revenue, explain assumptions underlying the revenue estimates, and highlight key ' revenue trends. • Statistical and supplemental data should he included in an appendix or throughout the text. 1 1 -5 EXHIBIT B.2 CITY OF SAN LUIS OBISPO • ORGANIZATION OF BUDGET DOCUMENT The following is a summary of the organization of the City's Financial Plan/Budget document: Section A : Budget Message - Transmitted from the City Administrative Officer, the Budget Message outlines the format, principles, and important issues of the City's two-year financial plan. Section B : Policies and Objectives - Summary of general budget policies or new significant program policies that guide the preparation and management of the budget. Section C : Graphic Summaries - Simple charts and graphs intended to , summarize and highlight key relationships or trends. Section D : Operating Programs - The operating programs described in this section. form the City's basic organizational units; allow for the provision of essential services to citizens; and enable the City to accomplish the following tasks: • Establish policies and goals which define the kind and level of services required. • List suitable activities for delivering services. • Propose objectives for improving the delivery of services. ' • Identify resources available and appropriate the resources needed to conduct activities and accomplish objectives. ' Section E : Capital Improvement Plan - All of the City's construction projects and capital purchases (other than vehicles with replacement reserves) which cost more than $10,000 are included in the Capital ' Improvement Plan (CIP) . Through the CIP, the City systematically plans, schedules, and finances capital projects to ensure cost-effectiveness and conformance with policy. Beginning in 1984, the City divided its CIP into two subplans: Capital Reinvestment Plan (CRP) : Two-year plan to repair, replace, improve, or expand existing City facilities and equipment. Capital Facilities Plan (CFP) : Four-year plan to finance and build new facilities for the City. Section F : Budget Supplements - This section is primarily composed of tables designed to provide supplemental financial planning or summary data. Section G : Glossary - The financial plan contains a number of terms that may be used in a manner unique to public finance. The purpose of the glossary is to provide a common terminology in discussing the City's financial operations. -6- ' EXHIBIT B.2 (cont'd) ' As noted above, the City uses a two-year financial planning period for its operating and capital reinvestment plan programs; and a four-year period r for its capital facility plan. This multi-year approach reflects the City's planning orientation to the budgetary process. Primary benefits previously identified associated with the multi-year approach include: r • Reinforcement of long range planning. a Concentration on development of and budgeting for significant robjectives. • Establishment of realistic timeframes for the completion of rprogram objectives. • A pro-active budget providing for an orderly and structured operating environment. m Promotion of more orderly spending patterns. r • Savings in time and resources allocated to the preparation of annual budgets. r r . r r r r r r EXHIB'I'T B.3 CITY OF SAN LUIS OBISPO • FINANCIAL PLAN/BUDGET "PYRAMID" The presentation of the City's operating and capital expenditure plans are , organized in the budget document along functional lines using a "pyramid" approach summarized as follows: Functions - The highest level of summarization used in the City's financial plan, the "function" classification represents a grouping t of related operations and programs crossing organizational (departmental) boundaries and aimed at accomplishing a broad goal or accomplishing a major service. The six functions in the financial plan are: • Public Safety • Public Utilities • Transportation 1 • Leisure, Cultural & Social Services • Community Development • General Government Operations - A grouping of related programs within a functional area. Programs - A grouping of activities or plans pertaining to the accomplishment of goals and objectives. The financial plan includes t more than fifty programs grouped into the six functions noted above. Activities - Specific services performed within a program in the pursuit of its objectives and goals. EXAMPLE FUNCTION Public Utilities OPERATION Water Service ' PROGRAM Water Treatment ACTIVITY Laboratory Analysis -8- ' ' EXHIBIT B.4 r CITY OF SAN LUIS OBISPO 0 SUMMARY OF MAJOR CITY FUNCTIONS Responsible Primary Department/Office Funding Source ------------------------------------------------------------------------------------------- Public Safety: Police Protection. . . . . . . . . . . . ... . . . . . . . . . .Police General Fund Fire & Environmental Safety. . . . . . . . . . . . . .Fire ' General Fund Disaster Preparedness. . . . . . . . . . . . . . . . . . . .Fire General Fund Public Utilities: Water Service. . . . . . . . . . . . . . . . . . . . . . . . . . . .Public Works Water Fund Wastewater Service. . . . . . . . . . . . . . . . . . . . . . .Public Works Sewer Fund Whale Rock Reservoir & Fishing. . . . . . . . . . .Public Works Whale Rock Fund Transportation: Streets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Public Works General Fund Parking Operations & Maintenance. . . . . . . . .Publi'c Works .Parking Fund Parking Enforcement. . . . . . . . . . . . . . . . . . . . . .Police Parking Fund Municipal Transit System. . . . . . . . . . . . . . . . .Administration Transit Fund Vehicle & Equipment Maintenance. . . . . . . . . .Public Works General Fund Leisure, Cultural , and Social Services: Parks and Recreation: Recreation and Aquatic Programs. . . . .Recreation Parks & Recreation Fund Landscape, Parks, & Swim Center Maintenance. . . . . . . . . . . . . . . . . . . .Public Works Parks & Recreation Fund Tree Maintenance. . . . . . . . . . . . . . . . . . . . . . . . .Public Works General Fund Golf Course. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Public Works Golf Fund City/County Library. . . . . . . . . . . . . . . . . . . . . .Public Works Library Fund ' Community Promotion. . . . . . . . . . . . . . . . . . . . . .Non-Departmental General Fund Human Relations. . . . . . . . . . . . . . . . . . . . . . . . . .Administration General Fund Community Development: Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Community Development General Fund Construction Development: Engineering. . . . . . . . . . . . . . . . . . . . . . . . .Public Works General Fund ' Construction Regulation. . . . . . . . . . . . .Community Development General Fund Economic Development - Business Improvement Area (BIA) . . . . . . . .Non-Departmental BIA Fund ' General Government: City Council. . . . . . . . . . . . . . . . . . . . . . . . . . . . .City Council General Fund General Administration. . . . . . . . . . . . . . . . . . .Administration General Fund Legal Services. . . . . . . . . . . . . . . . . . . . . . . . . . .City Attorney General Fund City Clerk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .City Clerk General Fund Finance Administration. . . . . . . . . . . . . . . . . . .Finance General Fund 1 Personnel Administration. . . . . . . . . . . . . . . . .Personnel General Fund Public Works Administration. . . . . . . . . . . . . .Public Works General Fund Buildings (Operations & Maintenance) . . . . .Public Works General Fund 1 ' -9- E%HIBIT B.5 �II�III�+'I IINI�II �C city. O SabiIuIS OBIS1 i 990 Palm Street/Post Office Box 8100 •San Luis Obispo, CA 93403.8100 September 8. 1987 ' MEMORANDUM To: City Council From: John Du ' Subject: Bu s and the Budget Subcommittee This memo proposes a framework for discussion of the budget review process and the role of the Council Budget Subcommittee. Suggested Budget Process _ The budget review process can be improved with consensus of the Council , and staff on the scope, format and order of the various phases of budget review. The following outline suggests a six-step approach to the review process for discussion: 1. Overview: Staff preparation and presentation of background financial information (current conditions, revenue and expenditure projections, and trends) and orientation to the budget (purpose, organization, policies and procedures) . 2. General Discussion: Council discussion of potential policies and programs. Preliminary setting of priorities and general guidance for the preparation of a budget. Creation of the Council's annual work program. ' 3. Budget Preparation: Staff preparation of draft budget. 4. Budget Review: Council review of the draft budget. Formal review with study sessions and public hearings: A. Review of overall financial situation and budget policies B. Review of programs and the CIP. 5. Budget Approval: Adoption of annual budget resolution. , 6. Budget Implementation: Implementation programs and policies approved In the budget. Staff monitoring and reporting program. Notes: The budget process is essentially continuous with budget Implementation for one year occurring simultaneously with preparation for , the next year. The depth and scope of review varies year to year depending on whether it is the first or second year of the two-year ( financial plan. 1 -- Budget Subcommittee-Background The Budget Subcommittee was established in October 1981 by Mayor Billig to "synthesize, clarify, and articulate the Council 's many thoughts and ' concerns regarding the overall budgetary process and to make recommendations to the Council . " The goal of the Committee was to facilitate the Council's decision making and to establish a process which would be less trying and hectic than previously experienced. (See ' Enclosure sl) At the January 11 , 1982 Council meeting, the new CAO, Paul Lanspery, presented a memorandum to the City Council that stated the role and functions of the Budget Committee. (See Enclosure #2) The City ' Council unanimously accepted this recommendation. On May 14, 1982, the Budget Subcommittee advised the City Council on the performance of the City Administrative Officer in establishing the new ' budget format and approach sought by the Council and suggested a few principles to be followed by the City Council in their review of the budget that was being recommended by the CAO. (See Enclosure s3) ' The 1982-83 Budget was a cooperative effort between Council and staff to change the emphasis from a line-item budget to a process that allowed the Council and staff to address levels of service, goals, objectives, and major policy issues. As a result of the successful 1982-83 budget and the overall satisfaction with the budget process, the Budget Subcommittee has continued to operate as an activity of the City Council under the same guidelines given the committee in January 1982. During review of the 1987-89 Financial Plan, the Council Budget Subcommittee met frequently to assist staff with decisions on format and ' schedule. Consistent with previous guidelines the subcommittee concentrated on facilitating budget review and did not specifically deal with programs and policies to be recommended by Administration and reviewed and approved by the whole Council . ' Future of the Budget Subcommittee If the City Council generally concurs with the suggested budget process outlined above, a reassessment by the City Council of the need for a Budget Subcommittee appears timgly. To focus discussion, staff has . outlined some advantages, disadvantages and alternatives which are presented below: Advantages of a budget subcommittee: ' 1 . Saves members of the City Council time in working with staff -in preparation of a budget calendar ' -in defining budget formats -in development of budget classifications -in reviewing major budget-process issues. ' 2. Provides two Councilmembers with an opportunity to develop experience and in-depth knowledge of the budget process in order to assist other Councilmembers, 3. Allows staff to have convenient and direct contacts with the Council through their subcommittee in matters regarding budget procedure, , formats, and policies. ( Disadvantages of a budget subcommittee: 1. Members of the Council may perceive that the Budget Subcommittee has t information not available to other members of the Council and that the committee may influence staff on substantive matters. ' 2. Budget Subcommittee may not inform the Council on direction given to staff. ' 3. Budget Subcommittee may not have clear guidance from the Council as to matters of procedure, format, or policy or conversely may not fully communicate the subcommittee meeting content back to the full City ' Council. 4. The Budget Subcommittee may be unnecessary if the whole City Council ' produces a clear annual work program and actively participates in the type of review process described in the six-step approach. Alternatives: 1. Continue Budget Subcommittee as currently organized with the role and functions as originally established. 2. Continue Budget Subcommittee as currently organized with modified roles and functions. 3. Discontinue the Budget Subcommittee, using the City Council as a "committee-of-the-whole. " JD:mp ' Attachments 1 c —12— EXHIBIT B.6 TENTATIVE CALENDAR • FISCAL YEAR 1988-89 BUDGET DATE AGENDA RESPONSIBILITY t 02/09/88 Capital project review and field CAO trip with City Council Public Works 03/15/88* Mid-Year Budget Report: CAO Financial Review - 87/88 operating Department Heads and capital revenue and expenditure City Council projections; 88/89 revenue forecast. City Council Work Program - status report on 87/88 programs and review of 88/89 program in ' preparation for 88/89 Budget. 03/29/88 Issue Budget Preparation Instructions, Department of Finance and Worksheets for FY 88/89 Operating and Capital Budget 04/11/88 Financial Study Session with City Council Department of Finance ' (See attached tentative agenda) 04/18/88 Recommended Adjustments to the FY 88/89 Department Heads ' Budget to the Department' of Finance 05/02/88** Capital Improvement Plan Study Session Staff/City Council with City Council 1 05/11/88 Capital Improvement Program Presentation Staff and Review to Planning Commission ' (Public Hearing) 05/17/88 Budget submitted to the City Council CAO/Staff ' (Public Hearing) (Regularly Scheduled Council Meeting) 06/07/88 Final Public Hearing to City Council ' Approve FY 88-89 Budget (Regularly Scheduled Council Meeting) i * Subsequently consolidated with financial study session with City Council scheduled for April 11, 1988. ' ** Tentative date pending scheduling concurrence with City Council . 1 ' 1 -13- EXHIBIT C.1 CITY OF SAN LUIS OBISPO • COMPREHENSIVE ANNUAL FINANCIAL REPORT The City's Comprehensive Annual Financial Report (CAFR) is prepared in ' order to present the City's monetary results of- operations and financial condition at year end as well as to provide statistical information of general interest about the San Luis Obispo community. This document reflects the City's continuing commitment to the highest levels of financial reporting by again using a reporting format which meets the standards adopted by the Governmental Accounting Standards Board (GASB) , which has been recognized as the authoritative body in the application of generally accepted accounting principles to state and local ' governments. The primary effect of these standards on the City's Financial Statements is the consolidation of financial information, shifting the focus of the report away from individual funds to the City in , its entirety, including special funds and districts; and to provide statistical information of general interest about the City. The City's CAFR includes the following major sections: ' Introduction Transmittal Memorandum , Directory of Officials/Organization Chart ' Financial Reports Auditors' Opinion t General Purpose Financial Statements Supplemental Financial Schedules by Fund and Account Group , Statistical Reports (Unaudited) • Ten year summary of governmental expenditures by function. • Ten year summary of revenues by source. • Ten year summary of tax revenues by source. • Ten year summary of property tax levies and collections. • Ten year summary of assessed valuations. • Ten year summary of property tax rates. -14- 1 ' EXHIRiT C.1 (cont'd) ' s Summary of principal taxpayers. • Ten year summary of general bonded debt ratios. ' • Legal debt margin as of June 30, 1987. • Direct and overlapping debt as of June 30, 1987. e • Ten year summary of annual debt service requirements. • Ten year summaries of water and sewer revenue bond coverage. • Miscellaneous statistical and demographic information about the San Luis Obispo community. m Ten year summaries of taxable sales and construction activity. ' Beginning with Fiscal Year 1983-84, all of the City's Comprehensive Annual Financial Reports have received the GFOA's Certificate of Achievement for Excellence in Financial Reporting, which is the highest form of recognition for excellence in this area of financial management. 1 1 1 1 1 ' -15 EXHIBIT C.2 , SUMMARY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ' OVERVIEW , Until 1979, there was no authoritative body responsible for the promulgation of generally accepted accounting principles for local governments. This lack of standards resulted in significant difficulties in comparing audited financial statements between cities as different methods were used in recording and reporting financial transactions. In 1979, the National Council on Governmental Accounting (NCGA) issued the first authoritative guidelines for governmental accounting, auditing, and financial reporting. This body has since been replaced by the Governmental Accounting Standard Board (GASB) , which now serves as a permanent organization charged with the responsibility of establishing generally accepted accounting principles for state and local governments. CITY'S BASIS OF FINANCIAL REPORTING , The accounting policies of the City of San Luis Obispo conform to generally accepted accounting principles. The City's accounts are ' organized on the basis of funds with each fund considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts'that comprise its assets, ' liabilities, fund equity, revenues, and expenditures, (or expenses as appropriate) . Government resources are allocated to, and accounted for in, individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped in the financial statements into three broad fund categories as further described in Exhibit C.3: Governmental , Proprietary, and Fiduciary. , BASIS OF ACCOUNTING The basis of accounting used for the Governmental Funds Types and certain Fiduciary Fund Types is the primary difference between the recording and reporting of financial transactions for public versus private sector operations. ' The modified-accrual basis of accounting is followed for the Governmental Fund Types, Expendable Trust Funds, and Agency Funds. Under the ' modified-accrual basis of accounting, revenues are recognized in the accounting period in which they become available and measurable. The City considers interest, subventions, and grant revenues billed but not received as susceptible to accrual . Depreciation is not recorded as an expense, and capital acquisitions are recorded as expenditures. Expenditures are recognized in the accounting period in which the liability is incurred; the exception to this general rule is for unmatured ' principal and interest on general long-term obligations which are recognized when due. -16- ' 1 tEXHIBIT C.2 (cont'd) ' The accrual basis of accounting with depreciation recorded as an expense is used in the Proprietary Fund Types. Under this basis of accounting, which is the same as that used for private sector operations, revenues are recognized in the accounting period in which they are earned; and expenses ' are recognized in the period incurred. Unbilled water and sewer utility services receivables are recorded at year-end. ' A comprehensive summary of the City's significant accounting policies is provided in the Notes to the General Purpose Financial Statements included with the Comprehensive Annual Financial Report. 1 1 1 1 1 ' -t7- EB. ,IT C.3 ' CITY OF SAN LUIS OBISPO a SUMMARY OF FUNDS ' The City's financial reporting system is organized on a fund basis consisting of three major fund types - Governmental , Proprietary, and Fiduciary - and two self-balancing Account Groups. The City's various funds as summarized ' below have been established in order to segregate and identify those financial transactions and resources associated with providing specific activities or programs in accordance with special regulations, restrictions, ' or limitations. GOVERNMENTAL FUNDS - Most of the City' programs and functions are provided ' and financed through the Governmental Funds, which are distinguished by their measurement focus on determining financial position and changes in financial position, rather than upon determining net income: General Fund Debt Service Fund ' Special Revenue Funds: Capital Project Funds: Library Capital Outlay Parks & Recreation Equipment Replacement Business Improvement Area Gas Tax , Sales Tax Transportation Revenue Sharing PROPRIETARY FUNDS - Proprietary type funds are distinguished from ' Governmental type funds by their similarity to private sector enterprises, as the intent is that the cost of providing services - whether this service is ' to the public or internally to the organization - is to be financed or recovered primarily through user charges: Enterprise Funds: Internal Service Fund: Water Payroll Revolving Parking Sewer t Transit Golf FIDUCIARY FUNDS - Also known as Trust and Agency Funds, Fiduciary type funds ' are used to account for assets held by the City in a trustee capacity for private individuals, organizations, or other governmental agencies: Expendable Trust Funds: Agency Funds (Continued) : , Revolving Central Coast Cities Duvall Trust Self-InsuranceJund ' Assessment District Bonds: Agency Funds: Leff, Bond, and Ramona Utility Revolving McMillan Sewer Whale Rock Reservoir ACCOUNT GROUPS - Except for assets and liabilities associated with Proprietary or Fiduciary fund types, these self-balancing Account Groups are ' used for accounting control and accountability for the City's general fixed assets; and the unmatured portion of principal outstanding on its general long-term debt: General Fixed Assets General Long-Term Debt -18- ' 1 . ' EXHIBIT D. 1 CITY OF SAN LUIS OBISPO • FINANCIAL SERVICES STUDY ' On February 23, 1988, the City Council approved the selection of the proposal submitted by Evensen Dodge for financial services and authorized ' the City Administrative Officer to execute an agreement with this firm. As summarized below, the Financial Services Study is composed of three major tasks: ' Task 1 : City-Wide Cost Allocation Plan and Cost Recovery Program This portion of the work program would primarily be performed by Vertex ' Cost Systems acting as a subcontractor to Evensen Dodge, and includes the following elements: ' • Development of a City-wide cost allocation plan to determine the total cost of providing municipal services. • Determine current and potential user fees and related activity ' costs. • Comparison of the City's current and proposed fees with other ' agencies. • Development of indirect cost rates for use in federal and state ' grants. Task 2: Comprehensive Financial Management Plan ' Using the cost of service information developed under Task 1, this portion of the workscope would be primarily performed by Evensen Dodge, and includes the following elements: t • Review of capital financing requirements. • Evaluation of existing debt structure. 1 • Identification and analysis of potential financing options including equity (cash-on-hand, grants, user fees, development ' impact charges) and debt (bonds, notes, lease-purchase agreements, certificates of participation) . ' • Review of priority and timing of capital projects. s • Based on their review of financing options and phasing alternatives, evaluation of available debt financing tools. ' m Analysis of the City's overall financial position and review of current debt management and reserve policies. ' a Recommendations regarding financing plans and schedules. -19- EXHIBIT D.1 (cont'd) ' Task 3: Proiect Financings Evensen Dodge would also be responsible for this element of the workscope by acting as Financial Advisor to the City for any specific debt issuances. Evensen Dodge is especially qualified to serve in this ' capacity; although relatively new to the California market, Evensen Dodge is the nation's leading independent financial advisor. For each project requiring debt financing, services provided by Evensen Dodge would include: • Presale analysis addressing items such as issue size, security ' and call features, credit enhancements and rating strategies, sale methods (competitive or negotiated) , principal payment schedules, maturity periods, and financing schedules. , • Preparation of financing documents such as the Official Statement, any required City Council resolutions, •notice of ' sale, bid forms, and bond purchase agreements. • Coordination with rating agencies. • Marketing of issues. m Closing and post-sale analysis. ' t 1 . 1 1 -20- ' ' EXHIBIT D.2 COST ALLOCATION PLANS ' OVERVIEW ' Cast allocation plans are developed in order to identify the total program costs of providing services or products. As is the case with most organizations, both private and public, the costs of providing services or products can be classified into two types of categories: indirect costs ' and direct costs. Direct costs are those which can be specifically identified with a particular cost objective, such as street maintenance, police protection, wastewater treatment, and planning services. Indirect ' costs are not readily identifiable with a particular operating program, but rather, are incurred for a joint purpose which benefits more than one cost objective. Common examples of indirect costs are accounting, ' purchasing, personnel, building maintenance, and utilities. Although indirect costs are generally not readily identifiable with direct operating programs, they are nevertheless incurred by the organization in providing a service or product. As such, it is essential that some method be utilized to distribute indirect costs to operating programs if the total cost of a program is to be identified. ' Theoretically, all indirect costs could be charged directly to specific cost objectives; however, practical difficulties generally preclude such an approach for organizational and accounting reasons. As such, most organizations, both private and public, budget and account for indirect ' and direct costs separately. However, in order to accurately reflect the total cost of providing a service or product, some methodology for identifying and allocating indirect costs to specific cost objectives must ' be developed, which is the purpose of a cost allocation plan: to identify indirect costs and to allocate them to direct cost programs in a logical and uniform manner. ' USES OF COST ALLOCATION PLANS Through the identification of total program costs, cost allocation plans ' can be utilized as a basic information tool in a number of financial and budgetary decision-making situations, including the following: ' • Cost allocation plans can be used to determine total costs applicable to federal grant programs. Under the provisions of Federal Circular A-87, it is permissible to include indirect costs in accounting for federal grant programs. By establishing indirect cost rates, cost allocation plans can be utilized to recover the indirect costs associated with administering federal grant programs. 1 ' -21- EXHIBIT D.2 (cont'd) ' • Cost allocation plans can be used to identify the indirect costs , incurred by the City in administering and providing support services to special funds. For example-, although the City Administrative Officer, City Attorney, and Departments of Finance 'and Personnel are organized and accounted for in the , General Fund, these departments provide support services to other funds such as Sewer, Water, Parks and Recreation, Transit, and Parking. Cost allocation plans, by identifying total ' program costs, can be used to determine this level of support and to reimburse the General Fund for the indirect costs incurred. • Cost allocation plans can also be used in establishing service ' fees designed for cost recovery by ensuring that all of the costs -- direct and indirect -- associated with providing t services are in in the cost analysis. For example, the hourly wage for any individual or category of employees can be readily determined based on a standard work year of 2080 hours. , However, in addition to direct salary compensation, there are significant monetary benefits that must be considered in determining the total hourly cost of services, was well as the indirect costs incurred. Even if City policy does not require ' total cost recovery for specific programs or activities, cost allocation plans can assist in setting rates designed to achieve indexed cost recovery goals and related subsidies. ' SUMMARY Cost allocation plans make the determination of total program costs ' practical by establishing a methodology for identifying and allocating indirect costs to direct cost programs. As such,- cost allocation plans can be a valuable tool in a number of financial applications, including ' the allocation of organizational resources, performance of expense analyses, establishment of fees designed to recover costs, recovery of indirect costs in the administration of grant programs, and reimbursement of costs associated with providing support services to special funds. ' 1 -22- ' ' EXHIBIT E MEETING DATE: city of Safi Luis omspo 3-15-88 IIIIIWQ' AD COUNCIL AGENDAREPORT nS'NUMBEfl: FROM: William C. Statler, Director of Finance SUBJECT: 1987-88 MID-YEAR BUDGET REVIEW ' CAO RECOMMENDATION ' Receive and file the Mid-Year Budget Review for Fiscal Year 1987-88. OVERVIEW ' As part of the 'City's two-year financial plan, a report on the financial status of the City is presented to the City Council every six months. As discussed in greater detail below, the City's financial position at the ' mid-point of Fiscal Year 1987-88 is on target with budget projections. Further, overall revenue estimates for Fiscal Years 1987-88 and 1988-89 are generally equal to or greater than original budget projections: and no ' appropriation increases requiring City Council approval are recommended at this time. In addition to addressing revenue and expenditure trends for FY 1987-88 ' and revenue forecasts for FY 1988-89, this Mid-Year Review also provides a status report on the City Council Work Program for Fiscal Year 1987-88. ' FINANCIAL STATUS Provided as a separate document with this report is an Executive Summary ' of the Monthly Financial Report for December 1987, which includes summary graphs and tables of the City's financial status at the mid-point of 1987-88. The primary revenue and expenditure summaries provided in the report include: ' m Summary schedules of revenues, expenditures, and changes in fund balance/working capital for all major funds. ' • Summary schedules of revenues and expenditures - budget and actual. ' • Summary schedules of operating expenditures by function and program - budget and actual . ' As reflected in the Executive Summary, financial results for revenues, operating expenditures, and capital projects are on target with budget estimates: operating revenues are at 57% of annual estimated revenues: and operating expenditures and encumbrances are at 52% of annual appropriations. The additional 2% over the anticipated expenditure/ encumbrance of 50% is primarily due to insurance, debt service, and lease ' payments made during the first six months of the year. Effective with this submittal , it is anticipated that the City Council will receive an Executive Summary similar to that provided with this ' Mid-Year Report on a monthly basis. 1 -23 I ► city of San Luis OBispo COUNCIL AGENDA REPORT ' REVENUE PROJECTIONS ' Provided in Attachment A is a summary of revenues by fund, which includes ' actual revenues for FY 1986-87; current budget and revised estimates for FY 1987-88; and projections for FY 1988-89. Major highlights relating to revenue trends include the following: Sales Tax Revenues - Sales tax revenues for Fiscal Years 1987-88 and 1 1988-89 are projected to increase by approximately 7.5% annually from 1986-87 levels, which is reflective of current state-wide trends as well ' as receipts through the first six months of the year. This level of sales tax activity is especially notable in light of the significant (17%) increase in sales tax revenues experienced from 1985-86 to 1986-87, ' Indicating that this increased base has not only been maintained but is continuing to be enhanced. Property Tax Revenues - Originally projected to increase from 1986-87 , levels by 5%, property tax levels are projected to increase by 10% for Fiscal Years 1987-88 and 1988-89. The following is a summary of property tax revenue percentage allocations between funds for Fiscal Years 1981-82 ' through 1988-89: General Capital Parks & ' Fund Outlay Library Recreation 1981-82 through 1985-86 55.5% 25.2% 2.5% 16.8% 1986-87 25.2 55.5 2.5 16.8 ' 1987-88 through 1988-89 40.0 40.0 2.5 17.5 ' As reflected above, the General Fund allocation of property taxes Increased from 25.2% to 40.0% between Fiscal Years 1986-87 and 1987-88, which is the primary reason for the projected increase in General Fund ' property tax revenues between these two years. Transient Lodging Taxes - As reflected in the attached summary, transient ' lodging taxes for Fiscal Years 1987-88 and 1988-89 are projected to be significantly greater than originally estimated. This increase is primarily due to the opening of the Embassy Suites and Quality Suites ' hotels. Significantly, the revenues attributable to the new hotels are primarily the result of increased hotel rentals throughout the City, rather than being achieved through increased market shares from previously existing units. ' Licenses and Permits - This revenue category is primarily composed of building permit revenues, which account for $300.000 (97%) of the original ' General Fund budget estimate for this category. As reflected in Attachment A. it is projected that revenues from this source for -24- 1 IID city of san Luis osispo lli;% COUNCIL AGENDA REPORT ' City's two-year approach, it is intended that the focus between operating and capital programs will alternate annually. As such, the primary focus ' of the 1988-89 budgetary process will be to further refine the operating program levels that have already been identified in the 1987-89 Financial Plan, whereas the capital improvement plan will be reviewed in greater depth. ' In preparation for the FY 1988-89 budgetary process, a workshop is planned for late March or early April in order to: ' a Provide an overview of the City's financial policies, funding sources, and financial history. ' m Review the Mayor/Council Work Program for 1988-89. • Consider the framework for the budget process as outlined in ' Attachment C. SUMMARY ' The Mid-Year Budget Review for FY 1987-88 has been presented to the Council in conformance with the City's policy of formally presenting a ' report on the City's financial position every six months. In summary, the City's financial results at the mid-point of the fiscal year are on target with budgetary projections, and no increases in appropriations requiring City Council approval are recommended at this time. 1 1 1 1 1 I ' -25- ATTACHMENT A ' CITY OF SAN LUIS OBISPO • REVENUES BY FUND AND SOURCE ' 1986-87 Through 1988-89 ---------------------------------------------------------------------------------- ' 1987-88 1987-88 1986-87 CURRENT REVISED 1988-89 -----ACTUAL ---------BUDGET-_---- ESTIMATE PROJECTED ' ------- GENERAL FUND Tax Revenues: ' Property Tax 651 ,389 1,092,000 1 ,160,000 1,276,000 Sales Tax 5,402,709 5,650,000 5,800,000 6,200,000 Trans Lodging Tax 947,487 920,000 1,200,000 1 ,200,000 ' Other Tax 2,737,704 2,679,200 2,824,600 2,915,000 Licenses & Permits 316,302 308,750 208,500 168,500 Fines & Penalties 457,359 392,000 398,000 398,000 ' Investmt & Prop Rev 605,243 622,500 625,500 625,500 Subventions & Grants 1 ,459,765 1 ,531 ,800 ] ,531 ,800 1 ,656,800 Current Service Chgs 417, 116 407,000 517,900 447,500 Other Revenues 19,585 106,80096 6006 000- ' -------------------------------------------------------0,---- 13,014,659 13,710,050 14,362,900 14,947,300 LIBRARY 72,956 68,250 73,500 80,800 ' PARKS & RECREATION 1 ,040,955 1 ,189,300 1 ,172,100 1 ,231 ,100 ' BIA 84,347 81,500 97,000 99,600 GAS TAX 648,786 613,000 536,000 536,000 ' SALES TAX (SB325) 366,350 467,000 442,300 442,300 REVENUE SHARING 223,654 0 20,000 20,000 ' CAPITAL OUTLAY 6,515,699 1,785,000 2,043,500 1,558,400 WATER 3,269,019 3,071 ,000 3,001 ,000 3,041 ,000 PARKING 1.434,226 540,000 762,000 746,000 , SEWER 1 ,110,575 1 ,286,000 1 ,216,000 1 ,210,000 TRANSIT 410,897 439,000 467,600 472,600 ' GOLF COURSE 204,376 200,000 203,000 203,000 WHALE ROCK 678,491 543,000 643,000 643,000 ' DUVALL TRUST 9,662 10,000 10,000 10,000 ' ASSESSMT DISTRICTS 8,938 8,300 8,300 8,300 ------------------------------------------------------------ TOTAL REVENUES 29,093,590 24,011,400 25,058,200 25,249,400 ' a=aaaeaavaaaaaaaaaaaazzzzzzaaaazaaaavazzzzvzzzzzzzzzzaav e�+%re/�.� - &TTAcHMMTB _ § k k % Ak } � § � £ � § { � - \ � � � � - � ) � ' $ } � ) % 4 ; — % IN 0 % ! � t - � 2 @ 2 co em cm cm cm m }co b § — � 10 \ / \ . — 8 § % � ` � § 41 £ / ! _ Lf u 2 ! 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O C 1mp 7 g ' L O W g 7 N 6 Y pmt m Y C > O O F L m m w > _ V ` d dco At L L r m a Y u O m c ■m L M 8g N J r yC O m Y � yE � K Y J a Y W O al d L =Y yOd mmd a Cmm Y°dC 4 CL C d I X 8- - Y Mw m m F OY m F d O 7dL OpmSL7 m J > y = Y 7 ` > a J[ Y L 7 L d u L p L �, a Y m g tmEQ m E d F > 7 m 6 Y L u0 Q W C O m 90 v C m O. r W °OY H K m OC m 1 L W f u d m c m ci o uiAi i I - 2 § s \ k _ � B � 2 \ kJ 0a \ k0 \ ) \ � J ka to cc az0 } ) k 0 ! ) $ � a C40, � . § in _ _ m _ � . / 0 = k i « e4 _ C \ � } ow i § § / . i ca a 8 48 ; 72 / f . . 0CL 0 � $ I k \ =0 w ! . k ski _ a � § 0 f ] ; ■ ; | � ) .2 - 7 � | i f &L ' - -10 • 22 A10 L . a. 0 ! § q u G; u C; U � § d -29- � � . EXHIBIT F ' CITY OF SAN LUIS OBISPO m 1988-89 NEW POSITION REQUESTS ' As summarized on page F-26, the 1987-89 Financial Plan includes four new ' permanent positions for the 1988-89 fiscal year: two in the Police Department and one each in Public Works and Recreation. Consistent with the Human Resources Policy, when new positions are proposed they will be ' evaluated thoroughly. These evaluations will occur at both the department and administrative levels (CAD's office, Personnel and Finance Directors) and will include an assessment of: ' • The necessity, term, and expected results of the new activity. • Staffing and materials costs including salary, benefits, ' equipment, uniforms, clerical support and facilities. • The ability of private industry to provide the proposed service. ' • Additional revenue or cost savings which may be realized. These evaluations are currently underway, and will be complete for ' presentation at a subsequent budget session, significantly in advance of the proposed budget adoption schedule_ 1 t 1 1 -30