April 30, 2002
BEGINNING OF CITY COUNCIL AGENDA
This agenda has been prepared to provide for the orderly progression of City business. Detailed staff reports on specific items are posted in the hallway for public viewing. The City Council wants to hear your comments, however, to run the meeting efficiently, please observe the following rules when you participate in the meeting.
Please try to submit your REQUEST TO ADDRESS THE CITY COUNCIL form to the City Clerk prior to the start of the meeting. You will be called at the appropriate time to make your remarks.
For the sake of efficiency, the City Council agenda is divided into several sections:
Consent Calendar: This section consists of routine items which, unless a request has been received from the public, council or staff to remove a particular item for discussion, are enacted by one motion of the City Council. If you wish to speak to any Consent Calendar item(s) you will be limited to three minutes.
Public Hearings: This section is devoted to noticed hearings. Although the normal time limit is three minutes for each speaker, the Mayor may grant additional time to a representative speaking for an entire group; however, this should not discourage anyone from addressing the City Council individually.
Regular Business: This section contains items of general business and you will be allowed three minutes to speak on any item.
Public Comments: This part of the agenda is reserved for making comments on matters which are NOT on the agenda. If you have submitted a request to speak, you will be called by the City Clerk at the appropriate time and you may speak for up to three minutes. Please limit your comments to matters within the jurisdiction of the City Council. Due to State law, no action can be taken on matters brought up under Public Comments. If action by the City Council is necessary, the matter may be placed on a future agenda or referred to staff, as determined by Council.
Please make your remarks at the lectern microphone and direct your comments to the City Council and not to the staff or the public.
Conduct at the Council Meeting: The City Council has adopted a set of rules for conduct during City Council meetings. The following is an excerpt from those adopted Rules of Procedure:
Section 6.3 The Mayor shall order removed from the Council Chambers any person(s) who commits the following acts at a regular or special meeting of the City Council:
1. Disorderly, contemptuous or insolent behavior toward the Council or any member thereof, tending to interrupt the due and orderly course of said meeting.
2. A breach of the peace, boisterous conduct or violent disturbance, tending to interrupt the due and orderly course of said meeting.
3. Disobedience of any lawful order of the Mayor which shall include an order to be seated or to refrain from addressing the Council.
4. Any other unlawful interference with the due and orderly course of the meeting.
RANCHO PALOS VERDES CITY COUNCIL
AND FINANCE ADVISORY COMMITTEE
JOINT ADJOURNED REGULAR MEETING
TUESDAY, APRIL 30, 2002 @ 7:00 P.M.
FRED HESSE COMMUNITY PARK, 29301 HAWTHORNE BOULEVARD
CALL TO ORDER:
APPROVAL OF AGENDA:
1. 2002 Five-Year Financial Model
2. Budget Policy Issues for FY 2002-2003
3. Revisions to Proposed Budget for FY 02-03
ADJOURNMENT: Adjourn to 6:00 P.M. on Monday, May 6, at Hesse Park for interviews of Emergency Preparedness Committee applicants.
RANCHO PALOS VERDES CITY COUNCIL
AND FINANCE ADVISORY COMMITTEE
JOINT ADJOURNED REGULAR MEETING
TUESDAY, APRIL 30, 2002 @ 7:00 P.M.
FRED HESSE COMMUNITY PARK, 29301 HAWTHORNE BOULEVARD
CALL TO ORDER:
APPROVAL OF AGENDA:
1. 2002 Five-Year Financial Model
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: DENNIS McLEAN, FINANCE DIRECTOR
DATE: APRIL 30, 2002
SUBJECT: REVISED 2002 FIVE-YEAR FINANCIAL MODEL
Staff Coordinator: Kathryn Downs, Accounting Manager
BACKGROUND AND DISCUSSION:
Public Works staff made a comprehensive Power Point presentation of the City’s primary infrastructure to the Finance Advisory Committee (the "FAC") on March 13, 2002. The presentation included the Pavement Management System, the citywide storm drain plan, the PVDE (specific) comprehensive storm drain plan and a preliminary sewer maintenance plan. Public Works staff and the City Manager presented a draft of the Five-Year Infrastructure Plan (the "Infrastructure Plan") to the FAC on March 20, 2002. The Infrastructure Plan included projected costs for the five-year period ending FY 2006-2007.
The first draft of the 2002 Five-Year Financial Model ("2002 Model") was presented to the FAC on March 27, 2002, including the costs associated with the Infrastructure Plan. Staff presented a second draft of the 2002 Model to the FAC on April 17, 2002, substantially excluding costs associated with the Infrastructure Plan. The exclusion of the preliminary sewer maintenance plan and the citywide storm drain plan is based upon the lack of funding sources.
The Five-Year Financial Model (the "Model") is a financial schedule prepared by the Finance Department under the supervision of the City Manager. City Council Policy No. 18 requires preparation of the Model. The 2002 Model includes all funds of the City and its component units (Redevelopment Agency and Improvement Authority). The Five-Year Infrastructure Plan, prepared by the Public Works Department, has been incorporated into the 2002 Model. A description of the Five-Year Infrastructure Plan follows in this staff report. The 2002 Model is labeled as Attachment "A" accompanying this staff report.
Utility Users Tax
Section 3.30.180 of the Municipal Code requires the City Manager to submit an analysis of revenues derived from the City’s Utility Users Tax (UUT) in connection with the preparation of the City’s annual budget. The 2002 Model includes the projection of UUT revenue, as well as all other revenues and expenditures for the City and its agencies.
The UUT rate has always been 3% since its inception during FY 1993-1994. The City Council may vote to decrease or eliminate the UUT rate at any time. In the event the rate is decreased, the City Council may elect to increase the rate at a later date, but not to exceed 3%. As a result of the 1996 municipal election, the UUT rate may only be increased in excess of 3% with the majority vote of the people.
Significant Revenue, Expenditures and Transfers Not Reflected in the 2002 Model
Additional Budget Policy Issues Not Reflected in the 2002 Model
Loss of Vehicle License Fee (VLF) Revenue – A Contingency Plan
Staff expects that Vehicle License Fee (VLF) revenue will reach $2.3 Million during FY 2001-2002, approximately twenty (20%) percent of total General fund revenue. Approximately $1.6 Million of the VLF revenue is currently back-filled by the State. As you already know, the back-fill is at risk in light of the State’s budget crisis during the FY 2002-2003 budget process.
With the back-fill at risk, staff will present a proposed FY 2002-2003 budget with a contingency plan in the event the back-filled revenue is eliminated by the State legislature. Therefore, the contingency plan will focus on the reduction of the City’s CIP plan, such as the possible elimination of the FY 2002-2003 PVDE Sunnyside Drive storm drain project in the amount of $1,190,000.
Complete List of 2002 Model Assumptions
Assumptions Specific to the 2002 Model
The letter clearly states that the City is legally responsible for compliance with the new regulations.
It should be noted that future economic activity, legislation and policy decisions, as well as any other unforeseen circumstances could affect the City's revenue stream and expenditures during any of the years presented in the 2002 Model.
Significant Variances from the 2001 Model:
The 2002 Model reflects a decrease of combined fund reserves of the City of approximately $2.6 Million since the preparation of the 2001 Model. A condensed summary of the variances between 2001 and 2002 follows:
Condensed Summary of Significant Variances From the 2001 Model:
Five Year Infrastructure Plan
In a 1990 report, the EPA stated that "publicly owned wastewater systems will require more than $42 Billion of repairs before the year 2010." This statement emphasizes the infrastructure challenge facing public agencies, including Rancho Palos Verdes, in the future.
The Infrastructure plan, presented to the FAC by Public Works staff on March 27th, includes a citywide storm drain plan, a comprehensive Palos Verdes Drive East (area) storm drain plan and a preliminary citywide sewer maintenance plan.
Citywide Storm Drain Plan
The City has nearly completed the inventory and determination of an estimate of net book value of its roadways, sewers, storm drains, buildings, park facilities and other infrastructure assets. Based upon the inventory, the replacement cost of the City’s storm drain system is approximately $100 Million. Most of the drainage facilities are either at, or near the end of their useful life.
A comprehensive PVDE storm drain plan was presented to the City Council in May 2001, citing approximately 30 storm drain repair projects along PVDE. General fund monies are currently the only available source of funding the PVDE storm drain plan. Because unknown costs of storm drain projects are likely, staff hereby extends a word of caution that the estimated project costs included in the PVDE storm drain plan may be understated. The 2002 Model includes projected costs of about $1.2 Million annually for PVDE storm drain projects.
The City had a comprehensive citywide storm drain plan prepared in 1996. Staff expects to update the plan during FY 2002-2003. The City currently has no funding source for the citywide storm drain plan; therefore, it has not been included in the 2002 Model. Establishing a funding source for the citywide storm drain plan is a high priority, in light of the likelihood that storm drain repairs will be necessary.
Preliminary Citywide Sewer Maintenance Plan
The County of Los Angeles has maintained the City sewer system since the incorporation of the City in 1973. Staff believes that a significant portion of the sewer system is near the end of its estimated useful life. The replacement cost of the sewer system is in excess of $75 Million based upon the infrastructure inventory report recently prepared by the City’s engineering consultants.
Property owners currently pay an $18.50 assessment annually (though currently under review) for the County’s limited efforts. The County’s maintenance effort includes semi-annual inspection of flow (lifting of manhole covers) and on-demand repairs of known breakages. The video inspection of the sewer lines is performed only on an "as-needed" basis. No plan for systematic replacement of sewer lines is underway. Four of the seven lift stations are at the end of their estimated useful life. Additionally, the County has notified the City that regulatory health and safety compliance of the sewer system rests with the City.
Staff recommends the implementation of a sewer maintenance plan, including cleaning all City sewer lines and video filming segments of the sewer lines as funding allows. The video filming will provide staff with knowledge of the condition of the City’s sewer system and establish a baseline for the development of a comprehensive citywide sewer plan. A comprehensive sewer maintenance plan would include bi-annual video inspection of all sewer lines, weekly inspection of lift stations and periodic planned re-lining of the sewer system. Public Works staff previously included $640,000 in the Five Year Infrastructure plan for sewer cleaning, video filming and repairs. Because the City currently has no funding source for a comprehensive sewer maintenance plan, it has not been included in the 2002 Model.
Pavement Management System
The condition of the City arterial and residential roadways seems to be equal, if not better than staff’s goal. The replacement cost of the City’s pavement system is in excess of $113 Million based upon the infrastructure inventory report recently prepared by the City’s engineering consultants. Maintenance costs of the City’s pavement system are accounted for in the Gas Tax fund. Generally, the total cost of maintaining the City’s roadway system exceeds $3 Million annually. Because annual Gas tax revenues are not sufficient to maintain City roadways, the General fund makes transfers in excess of $800,000 annually to the Gas Tax fund to supplement City roadway maintenance. The voters of the City were informed in 1996 that the continuance of the 3% UUT rate was essential to maintain City streets at current levels.
Format of the 2002 Model
The 2002 Model includes the presentation of actual FY 2000-2001 revenue, expenditures and ending fund balances for all funds. The City’s independent auditors expressed an unqualified (clean) opinion regarding the fair presentation of the FY 2000-2001 financial statements as a result of their audit. The 2002 Model includes projections of revenues, expenditures and ending fund balances for FY 2001-2002. The proposed budget for FY 2002-2003 is the basis for the first year of the 2002 Model.
The 2002 Model includes the segregation of funds as follows:
A brief description of the nature and purpose of each fund is provided in Attachment "B" accompanying this staff report.
Based upon the assumptions described above, the projected ending fund balances of the General fund would decrease gradually to approximately $4 Million at the end of FY 2006-2007. Additionally, the proposed construction activities of the CIP fund and the street related costs of the Gas Tax fund will require annual transfers from the General funds totaling $16.4 Million over the five year period included in the 2002 Model.
In light of the looming FY 2002-2003 state budget crisis, our concern about the loss of the VLF back-fill and the uncertain rate of the national and state economic recovery, the FAC extends a word of caution about the expansion of programs and projects without additional revenue sources.
Based upon the findings of the 2002 Model, it appears the City will need to increase its revenue and other cash inflow sources in the future to: (1) adequately maintain the City’s infrastructure (Note: sewer and citywide storm drain infrastructure costs are not included in the 2002 Model); (2) improve park facilities; (3) provide funding for a "wish list" of improvements for the benefit of residents; and (4) enable payment of any scheduled LT debt to finance such improvements.
The FAC encourages the City Council to consider the menu of financing alternatives (e.g. user fees and assessment charges, existing and potential grants) presented separately during the Budget Workshop, as well as the merits of: (1) sharing the cost of infrastructure improvements with property owners; and (2) the use of LT debt to reduce possible user & assessment fees. The FAC asks that the City Council consider the issues resulting from preparation of the 2002 Model and provide direction to staff and the FAC regarding the continuation and scope of the Financing Alternatives project.
2. Budget Policy Issues for FY 2002-2003
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: ASSISTANT CITY MANAGER
DATE: APRIL 30, 2002
SUBJECT: BUDGET POLICY ISSUES FOR FY 02-03
Discuss the budget policy issues and provide staff with direction regarding the inclusion of these items or others identified by Council in the proposed budget for FY 2002-2003.
In 2001, the City prepared its second two-year budget document for Fiscal Years 2001-2002 and 2002-2003. Even though the budget document covers two fiscal years, the City Council has only adopted the budget for FY 01-02. The budget for FY 02-03 is shown as "proposed" in the budget document. This was purposely done so that during the second year of the two-year budget cycle, the Council can make any necessary adjustment or amendments predicated on changes that may have occurred over the last year.
As in past years, staff has prepared a summary of possible policy issues to assist the City Council in the budget deliberation process. The purpose of this workshop is to allow the Council the opportunity to discuss the issues prior to the budget hearing in June. The Council should not feel limited by the items listed in this memorandum. Each Council member may have policy issues that they wish to discuss at this time. In addition, a decision to place any of these items in the FY 02-03 budget does not preclude their removal prior to the adoption budget resolution.
The following is a list of the budget policy issues discussed in this report:
Each policy issue identifies whether the item is currently included in the "proposed" FY 02-03 budget and the 2002 Five Year Financial Model. This is particularly relevant for items proposed to be funded by the General fund. When work began on the Model in February 2002, staff included items in the Model that were expected to become budget policy issues, such as the Fee for Service Study and the support for the new Emergency Preparedness Committee. The budget policy issues included in the Model total $722,120 for FY 02-03. In order to maintain continuity during the Finance Advisory Committee’s review of the 2002 Five Year Financial Model, budget policy issues that were identified after the beginning of April were not added to the Model. Budget policy issues that are not part of the Model are Request for Additional Full-Time Employees, Building & Safety Division personnel study, FAC Consultant, City’s Thirtieth Anniversary Celebration, a portion of the Ergonomic Furniture for City Hall and City Grant Requests. The excluded policy issues total $233,758 for FY 02-03.
In the chart above, the cost of adding new full-time staff over the next five years was calculated assuming a 5% increase each year. The FAC Consultant and City Grants were increased by 3% each year; however, the FAC Consultant was included for only two years. The Building & Safety Personnel Study and the City’s Thirtieth Anniversary Celebration are both one-time events, and therefore are not reoccurring costs.
The General fund balance is expected to be $8,071,399 at the end of the FY 01-02 budget year. With budget adjustments and the inclusion of the items discussed in this report, the General fund balance is projected to be approximately $5,816,884 at the end of FY 02-03 budget year. This represents a projected General fund reserve of approximately 39% of total General fund expenditures (including transfers out) for that fiscal year.
REQUEST FOR ADDITIONAL FULL-TIME EMPLOYEES
Rancho Palos Verdes has 42 full-time employees. Three employees have been added to the roster over the past ten years. In 1996, an additional Administrative Staff Assistant was hired in the City Clerk’s office. In 1998, a Staff Assistant II (now reclassified as Accounting Technician) was hired by the Finance Department. In 1999, two part-time clerical positions in the Planning, Building & Code Enforcement Department were made full-time positions, resulting in an effective increase of one additional employee. Overall, the City has fewer employees today than in did in 1990 when the staff was made up of 58 personnel.
The Finance and Information Technology Department has requested the addition of a Senior Administrative Analyst to their staff. The current staffing includes seven employees. In addition to the Director, there is an Accounting Manager, an Accountant, two Account Clerks, an Accounting Technician and a Staff Assistant II. The proposed Senior Analyst will enable the Accounting Manager to shift most of the Finance Department’s budget tasks to the new position. The goal is to enable the Accounting Manager additional time to assume more of the Finance Advisory Committee (FAC) support effort. The Accounting Manager would share some of the responsibility to support the FAC with the new Senior Analyst. Currently, the Director performs most of the support for the FAC. The Director anticipates that the workload of the FAC will continue to increase in the future and that the Finance Department’s staffing needs cannot be satisfied by use of the services of a third party consultant similar to building and safety inspectors or a traffic engineer. Most of the work will require a working knowledge of the budgetary, financial and operational affairs of the City. The assignments are expected to include participation in the City’s budget process, long-range financial projections and complex "on-demand" tasks. The Department Director feels he can fill the position at a salary of about $54,000 a year. Benefits will add another 20% or about $11,000 to the City’s cost. Experience has shown that providing ergonomically correct office furniture and computer equipment will add about $3,000 to the initial cost of an employee and an annual cost of $600. Mr. McLean has stated that he has office space for this proposed employee.
The Public Works Department has two requests. They would like to substitute (or trade) their two Engineering Intern positions for a full-time Engineering Technician position. They would also like to hire a second Senior Engineer. Currently, the full-time staffing in the Department includes a Director, a Deputy Director, a Senior Engineer, a Senior Administrative Analyst, a Maintenance Superintendent, two Maintenance Workers, a Permit Clerk and an Administrative Staff Assistant. The Director feels that his Department workload has expanded to the point where he must spend too much time at project level meetings and not enough time at directing, problem solving and staff development.
The Deputy Director and one Senior Engineer are principally responsible for implementing the City’s Capital Improvement Program. The majority of the workday for these two positions – approximately 75% - is spent managing Capital Projects. The project team for each capital project includes specialists in engineering design, construction management, and inspection. Engineering consultants generally provide these services. The Deputy Director or Senior Engineer is responsible for the project budget, community interface, project schedule, and communications with City staff. Engineering consultants provide the technical services. The Department feels that assigning responsibilities such as project schedule, community interface, project budget, and communications with the City Council to consultants is counterproductive.
Ideally the workload for each project manager should be four to five projects with no more than two projects under construction at any one time. Based on this staffing plan the City retained the services of an engineering consulting firm to staff a project management job. This person was temporarily filling the position of Deputy Director until that position could be filled. However, due to the number of projects underway in the Public Works Department, once the Deputy position was filled this person was kept on.
The chart below shows the relative expenditures for Public Works functions (salaries, maintenance contracts and professional services) and capital outlay projects compared with total City revenues. Since 1996, Public Works Department expenditures have held fairly constant at about $4 million annually. The capital improvement program in the past four years has more than doubled ($3.36 million annually) over the previous four years ($1.38 million annually). These figures do not include $3.4 million in Redevelopment Agency Capital Outlay funds that were spent on the Abalone Cove Sewer project in 2001.
The combined cost of public works personnel wages and benefits (Salary) and the cost of professional services (Services) plotted against the amount of capital project work (Cap Out) constructed over the last eight years are shown below.
As the graph shows, the cost of nine full-time staff members has remained fairly constant over the past eight years, but the cost of outside professional services has increased significantly. The increased cost is partly due to filling vacant full-time positions with expensive hourly rate engineers, but mainly is due to managing more capital projects. The costs associated with the Abalone Cove Sewer System project (RDA) are not included here, but add over $4 million in construction and professional service costs expended primarily in 2001. If the City is to continue the aggressive capital improvement program of the past four years, the new positions are justified.
The Public Works Department Director feels he can fill the Engineering Technician position at a salary of about $42,000 a year. Benefits will add another 20% or about $8,000 to the City’s cost. The Senior Engineer position will be more costly at about $85,000 in salary and $17,000 in benefits. The Department Director feels that he can reduce the cost of professional services by about $100,000 by adding these additional full-time staff positions. Providing ergonomically correct office furniture and computer equipment will add about $3,000 to the initial cost of each employee and an annual cost of $600 each. Mr. Allison has stated that he has office space for the proposed employees.
The Recreation and Parks Department would like to add an additional position to their staff. For the past ten years there has been no significant increase in the Recreation and Parks budget and no additional staff. During that time, however, the Department has experienced an appreciable increase in the scope of their responsibilities.
According to the Director, there have been a steadily rising number of special events, including 2-3 one-time events each year such as the California Contract Cities Conference, memorial services (e.g. Perry Ehlig), Forrestal Dedication, Tongva Indian Ceremony, and the RPV 25th Anniversary Celebration. Because they are brand new, these events require significant staff research and involvement. The number of new recurring special events such as Shakespeare By the Sea, Girls Softball Parade, monthly Forrestal Cleanups, Coastwalk, REACH Restaurant, Breakfast with Santa, rides, races, Earth Day and multiple beach cleanups, have also increased during this time, while long-time special events such as Whale of a Day, the Fourth of July Celebration, and the PV Marathon have experienced sizable growth as well.
Docent educational programs and community outreach activities have also expanded in recent years. Originally based solely at PVIC, docents now offer hikes at Abalone Cove, Forrestal, and Ocean Trails. The docents’ educational programs and accompanying staff involvement should grow even larger and more varied when the Interpretive Center re-opens. The cleanup and planned expansion of PVIC is just one example of Recreation and Parks working more closely than ever before with other City Departments on large-scale projects. Other inter-departmental projects staff is currently working on include Abalone Cove improvements, the Forrestal Committee, and youth sports issues. A number of park sites have also been added in recent years including Lower Hesse Park, Forrestal Nature Preserve, and Shoreline Park.
These added projects, events, and park sites have increased the workload for the Department’s current staff, which consists of the Director, two Administrative Analysts, a Recreation Manager and two Recreation Program Supervisors. The Department would like to add an administrative staff assistant, who could assist with smaller-scale special events, prepare staff and administrative reports, write grant requests, and also fulfill the basic clerical/customer service duties of that position. The additional staff member would enable higher-level staff to focus on more complex projects and issues.
The Recreation and Parks Department Director feels he can fill the Administrative Staff Assistant position at a salary of about $35,000 a year. Benefits will add another 20% or about $7,000 to the City’s cost. Providing ergonomically correct office furniture and computer equipment will add about $3,000 to the initial cost of each employee and an annual cost of $600 each. Mr. Rosenfeld has stated that he has office space for the proposed employee.
Recommendation: Authorize an increase to the authorized staffing schedule as follows:
Fiscal Impact: The costs of adding the four full-time staff members are summarized in the table below:
There may be savings for the Public Works Department positions of up to $100,000 in reduced costs of outside professional services. However, even with these potential savings the cost of adding the four positions will increase annual City expenditures by about $171,000 during the initial year of employment and increase by approximately 5% each year thereafter.
EMERGENCY PREPAREDNESS AND FINANCE ADVISORY COMMITTEE STAFF SUPPORT
1. Emergency Preparedness Committee
On February 19, 2002, City Council created the Emergency Preparedness Committee (EPC) to advise the Council on how to best organize the City’s resources to respond to a variety of disasters and emergencies, as well as pool resources with other emergency response agencies and organizations. Subsequently, on April 16, 2002, the Council increased the size of the Committee from seven members to nine members. Council is scheduled to complete the candidate interviews on May 6, 2002 and appoint the members of the Committee at the May 7, 2002 meeting. Given this schedule, the Committee will probably not begin its duties in earnest until after the beginning of the new fiscal year.
The proposed FY 02-03 Budget includes $21,370 in the Emergency Preparedness Program. This has traditionally been a very lean budget and is not sufficient to provide adequate staffing and support for the new Committee at the level called for in the adopted EPC Tasks and Responsibilities statement. Additionally, the City does not have the in-house expertise necessary to support the activities of this new committee. Therefore, staff is recommending that the Emergency Preparedness program budget be expanded as shown in the chart below:
Currently, 10% of the Assistant City Manager’s salary and benefits are allocated to the Emergency Preparedness program as part of Personnel Services. Although the chart included in the published budget did not show any allocation of the Assistant City Manager’s salary to this program for FY 01-02 and FY 02-03, the City’s accounting software has been making the correct allocation for FY 01-02 and the discrepancy between the published budget and actual expenditures for FY 01-02 will be rectified at fiscal year-end. The discrepancy for FY 02-03 will be resolved as part of the adoption of the revised Emergency Preparedness program budget ($10,140 included for Salary & Wages). Therefore, the only "real" change in the Personnel Services budget is the addition of a line item for staff overtime ($4,350) to allow for non-management staff to attend Committee meetings, conferences and training events that occur outside of normal business hours.
The most significant increase in the budget is the addition of a line item in Operations and Maintenance for Professional/Technical Services. The $82,500 is proposed to hire a part-time consultant to staff the new Committee ($76,500) and a contract minute taker ($6,000). As mentioned above, the City lacks in-house staff with sufficient training and background to staff the Committee. Because the City shares its Area G Disaster Coordinator with the other sixteen South Bay cities and we are unable to significantly expand our use of this particular consultant. Furthermore, the City does not have clerical staff available to attend the Committee’s meetings and transcribe the minutes, thus requiring the use of a contract minute taker to fulfill this duty.
Staff has also included a new line item for Publications and Journals ($1,000) to provide reference materials and other published information for the Committee. Staff is also proposing increases to existing line items for Operating Supplies & Minor Equipment; Printing and Binding, Training; and, Meetings & Conferences by a total of $18,000 to support the activities of the new Committee and the City’s expanding role in disaster and emergency planning and response. The other on-going City activities related to emergency preparedness, such as maintaining the Emergency Operations Center at City Hall, providing emergency telephone service, participation in Area G and continuing emergency training for City staff will continue as part of the revised budget.
Recommendation: Staff recommends increasing the Emergency Preparedness program budget by $106,120 to support the activities of the recently created nine-member Emergency Preparedness Committee during the upcoming fiscal year.
Fiscal Impact: The estimated cost of $106,120 to support the Emergency Preparedness Committee would reduce General fund reserves accordingly.
2. Finance Advisory Committee
The City Council assigned the Finance Advisory Committee (the "FAC") with the following project:
"…to consider of the use of long-term ("LT") financing of infrastructure and to search for other revenue sources leading to a strategic [plan and] schedule prior to April 30th workshop".
The FAC has met six times during the months of March and April 2002 while participating in the beginning phase of the assignment. A presentation of a status report was included with staff’s presentation of the 2002 Five Year-Financial Model (the "2002 Model"). As stated in the staff report accompanying the 2002 Model, it appears the City will need to increase its revenue sources in the future to: (1) adequately maintain the City’s infrastructure (Note: sewer and citywide storm drain infrastructure costs are not included in the 2002 Model); (2) improve park facilities; (3) provide a "wish list" of improvements for the benefit of residents; and (4) enable payment of any scheduled LT debt to finance such improvements.
The FAC encourages the continuance of the search for financing alternatives, including revenue sources, currently underway by staff, its advisors and the FAC. Accordingly, staff requests the continued participation of financial and engineering advisors to assist staff with the formation of a plan of financing alternatives and the search for additional revenue sources for the City. It should be noted that the request for consulting services is separate from the new Senior Administrative Analyst position requested in the first budget policy issue. While the addition of a new full-time position is intended to address an overall increase in the Department’s responsibilities and workload, use of the financial and engineering advisors would be a task specific assignment, which is best provided by professional consultants.
Recommendation: Staff recommends authorizing an increase in the FY 2002-2003 budget of $50,000 for professional fees associated with the use of financial and engineering advisors to assist staff during the formation of a plan of financing alternatives and the search for additional revenue sources for the City.
Fiscal Impact: The estimated cost of $50,000 for professional fees associated with the use of financial and engineering advisors would reduce General fund reserves accordingly.
BUILDING AND SAFETY DIVISION PERSONNEL
Since 1984, the City has contracted with Charles Abbott Associates (CAA) for building and safety services. The current contract was awarded on May 16, 2000 and is set to terminate on June 30, 2005. As a result, the Department’s Building and Safety Division consists largely of CAA employees. Current staffing levels include 1 part-time Building Official, 2 to 3 full-time building inspectors/plan checkers (which varies based on workload) and 1 part-time structural engineer (located off-site). The Division also includes 2 permit clerks, which are City employees.
Although this system of contract building inspectors working with City employees in the Division has been in place for 18 years, it does create a situation where the 2-3 building inspectors are supervised by the Building Official (a contract employee), while the 2 permit clerks are supervised by the Deputy Planning Director (a City employee). Staff believes that a more ideal situation may be one where the building inspectors and permit clerks are supervised and managed by the same individual. Having a City employee as the Building Official would allow that person to maintain an office full-time at City Hall, as opposed to what has been the more typical situation where the Building Official has been at City Hall on a limited basis. Furthermore, because the building inspectors work very closely with the City’s code enforcement Staff, a City employed Building Official may also be able to supervise the Department’s code enforcement officer.
Recommendation: Staff recommends that a study be conducted on the feasibility of converting to a City employed Building Official position. Issues that should be addressed include the cost effectiveness of adding an additional position to the City’s payroll versus maintaining the contract position under the current CAA contract; and, the feasibility of finding a qualified candidate and at what salary level. Staff has identified and spoken to firms that conduct such studies. As a result, Staff recommends budgeting $10,000 in FY 02-03 to conduct such a study.
Fiscal Impact: The Department’s FY 02-03 budget would be augmented to include a $10,000 increase in its Professional/Technical Services budget, which would be paid for from the City’s General Fund. The actual professional service contract for this study will need to be approved by the City Council.
SEWER MAINTENANCE STUDY
Wastewater problems in the United States are reaching a crisis stage. No one knows for sure just how serious the problem is; however, a 1990 Congressional Report prepared by the U. S. Environmental Protection Agency states that publicly owned wastewater collection systems would require more than 42.9 billion dollars in repairs by 2010. Cities will undoubtedly share in the expense of these repairs. Therefore, local governments have begun to delve into the mysteries of the wastewater system. The goal of the proposed expenditure is to increase the level of maintenance and identify potential pipeline failures.
The City’s sewer pipelines, valued in excess of $53 million dollars, are aging. Therefore, it is imperative that they be properly maintained and inspected. Based on historical data obtained from the Los Angeles County Department of Public Works, there were 305 regional sewer line overflows in the County between 1997-2001. Most of these overflows were the result of sewer line plugs caused by a build up of cooking grease or the intrusion of tree roots. Cleaning and inspecting the lines on a regular basis can significantly reduce and/or eliminate overflows. The current annual revenue stream of $265,000 (i.e. the homeowner assessment of $18.50 per year collected by the County) falls far short of what is needed to properly maintain and inspect the City’s wastewater system including the sewer lines. Therefore, staff recommends that $335,000 be budgeted annually for wastewater maintenance. Of this amount, $285,000 will be allocated for line cleaning and videotaping. The remaining $50,000 will be used to cover the cost of engineering services in the event that bid documents for repairs and/or replacement of damaged lines is necessary.
Recommendation: Include $335,000 in the proposed FY 02-03 budget for the cleaning one-half of the City’s sewer line inventory, video inspecting up to one-half of the City’s sewer lines as the bids allow and hiring a consultant to develop bid documents for repair or replacement of damaged and/or failed lines identified via the video inspections.
Fiscal Impact: The estimated cost of this program for the first year, exclusive of the $265,000 collected by the County, is $335,000.
FEE FOR SERVICE STUDY
Cities have the general authority to impose fees, sometimes called charges or rates, under the Constitution of the State of California. Fees are distinguished from taxes in two principal ways: (1) the amount of the fee may not exceed the estimated reasonable cost of providing the particular service or facility for which the fee is charged, while the amount of a tax is not subject to any such restriction; and (2) the service or facility for which the fee is charged bears a relationship to the person or entity paying the fee.
Fees and charges fall into three general categories: (1) user fees charged to a person or entity using or consuming a city service (e.g. sewer fees and garbage collection fees); (2) development fees charged to a person or entity for the privilege of developing private property to defray the cost of public facilities and services necessary to serve the development (e.g. building permits, building inspection fees, map applications and connection fees); and (3) regulatory fees charged to a business to fund a program established to mitigate the effects of the business on the community (e.g. grading permit fees). Rates must be set by resolution or ordinance in accordance with statutory directives, and the rates charged to residents may be lower than the rates charged to non-residents.
The following is a partial list of cost based fees charged by the City:
During the two previous fiscal years, the City recognized fee revenue subject to cost based calculations as follows:
The City has not conducted a cost based fee study since 1992. Notwithstanding resident’s degree of receptiveness to across-the-board fee increases and assuming that costs have increased at the rate of one (1%) percent annually, a cost based fee study may provide fee increases of approximately $100,000 (or more) annually (based upon $1.0 Million x 10 years x 1%). A municipal consulting firm with experience and expertise preparing cost based fee studies would be selected to perform the work in accordance with a standard request for proposal process.
Recommendation: Staff recommends authorizing an increase in the FY 2002-2003 budget of $25,000 for conducting a cost based fee study of the user fees, development fees and regulatory fees charged by the City.
Fiscal Impact: The estimated cost of the proposed cost based fee study is $25,000 and would reduce General fund reserves accordingly.
REVIEW AND UPDATE OF MASTER PLANS
As the City Council is aware, the City is about to embark on the first major update of the City’s General Plan. Such a major update would involve preparing new text, performing new studies (i.e. traffic analysis), revising maps and other graphics, preparing the CEQA documentation and coordinating public meetings. As directed by the Council, a General Plan Update Steering Committee is currently being formed to review the General Plan’s Goals and Policies and guide the update process. It is anticipated that midway through FY 02-03, the Steering Committee will be making its recommendations to the City Council, and at that time a better idea of the breath and scope of the General Plan update will be known.
In addition to the General Plan, there are other "Master Plan" documents that are maintained by the Department that have not been updated in quite some time. These documents are listed and described below.
The Coastal Specific Plan
The Coastal Specific Plan (CSP) was adopted in 1978 and has not been significantly changed since that time. Like the General Plan, the CSP contains Goals and Policies (which appear to be taken directly from the General Plan) and factual information about land use within the City’s Coastal Zone (which is divided into 8 sub-regions). Like the General Plan, the content and policies are generally consistent with the ongoing vision of the City, however, since the document is 20 years old, an update is necessary. Any amendments to the CSP will also require approval by the California Coastal Commission. As such, it is very possible that the Coastal Commission in reviewing the City’s amended CSP could propose additional coastal access requirements, impose more stringent regulations and propose an expansion of the coastal zone.
Like the General Plan, a major update of the CSP would involve preparing new text, performing new studies, revising maps and other graphics, preparing the CEQA documentation and coordinating public meetings.
The Trails Network Plan
The City’s Trails Network Plan is a combination of the City’s Conceptual Trails Plan (CTP) and the City’s Conceptual Bikeways Plan (CBP). The purpose of both plans is to identify the trail and bikeway opportunities within the community, so that the acquisition and development of new public trails, through new development proposals, public works projects and voluntary efforts can be integrated into the City’s existing public trails network. The CTP was last amended in 1993, while the CBP was last amended in 1996. Both plans necessitate amendments to incorporate trail changes that have occurred in the last few years. In addition, a discussion of Trail Classifications and Standards, which was not adopted as part of the 1993 CTP Amendments, needs to be added to the CTP.
An update of Trails Network Plan would involve an analysis to determine what trail easements have been obtained by the City, the status of trails on those easements, the status of all existing and proposed trails, and the preparation of graphic materials identifying trail locations and design standards. A consultant would be needed to prepare the graphic materials and conduct research. The City’s current budget contains $25,000 to complete an update of the Conceptual Trails Plan portion of the Trails Network Plan (no money has been earmarked for an update of the Conceptual Bikeways Plan). However, this update has not been commenced, as efforts are currently focused on the update of the General Plan.
Western Avenue Specific Plans
Within the City boundary, Western Avenue is segmented into three specific planning areas (Specific Plans 2, 3 and 4) that were approved in January 1986, October 1986, and October 1987, and areas not located within specific planning areas that have a Commercial land use designation. An update could combine all of the properties along Western Avenue into one focused Specific Plan with the intent of establishing a guide for the comprehensive redevelopment or renovation of the existing commercial development along Western Avenue. The update could include a traffic analysis, design standards, a land use analysis and coordination efforts between existing property owners and the City of Los Angeles.
Recommendation: Staff recommends that the City Council continue to focus on updating the General Plan and that an update of the Coastal Specific Plan and Trails Network Plan be pursued after the General Plan has been updated. Furthermore, Staff recommends that the Western Avenue Specific Plans not be updated until after the outcome of the San Pedro cessation plan. To complete these master plan updates, Staff recommends budgeting $200,000 in FY 02-03. A better idea of the scope and cost of the General Plan update will be known after the Steering Committee makes its recommendations to the Council.
Fiscal Impact: The Department’s FY 02-03 budget would be augmented to include a $200,000 increase in its Professional/Technical Services budget, which would be paid for from the City’s General Fund. However, any professional service contracts with consultants will need to be approved by the City Council.
THIRTIETH CITY ANNIVERSARY CELEBRATION
In September 2003 the City will celebrate the thirtieth anniversary of its incorporation in 1973. Although the actual event will not take place until FY 03-04, Council may wish to consider including funding in the upcoming FY 02-03 budget to allow staff to get a head start on the planning and organizing the celebration. In the past, the City has marked significant anniversaries with a variety of community celebrations and has used both internal and volunteer resources to plan, organize and conduct these events. While the City had a large celebration four years ago to commemorate the City’s twenty-fifth or silver anniversary, staff envisions that the 30th celebration would be more in line what was done for the 15th and 20th anniversaries. The celebration could include a formal dinner/dance at the Los Verdes Golf Course or an informal community event similar to City’s July Fourth Celebration or Whale of a Day. In addition, the City has typically produced logo items such as pins, shirts and wine glasses to commemorate the City's anniversaries.
Recommendation: Include $15,000 in the FY 02-03 Budget for the City's thirtieth anniversary celebration.
Fiscal Impact: The funding for the anniversary celebration would reduce the General fund by a maximum of $15,000. However, the portion of the funds spent on commemorative souvenirs, such as shirts, pins, wine glasses, etc., will be recouped by the sale of these items.
ERGONOMICS RETROFIT OF CITY HALL FURNITURE
Last July all of the workstations at City Hall were evaluated for exposure to Repetitive Motion Injuries (RMIs). This was prompted by the ergonomics legislation being considered by the
U. S. Department of Labor. Implementation of that legislation, however, was delayed until January 2003. Nonetheless, the California Joint Powers Insurance Authority (CJPIA) recommended that the City follow current federal and state ergonomic standards since the City can now be fined for non-compliance and the CJPIA coverage does not pay the fines.
Presently, employers are required to comply with certain Cal-OSHA ergonomic "standards" if they have two reported cases of RMIs for employees doing the same work activity. As of this date, the City has had no reported cases.
The equipment and furniture at City Hall is an assortment of pieces purchased over the past 10 to 15 years, and used furniture that was donated at the time of incorporation. None of this furniture was purchased with ergonomics and flexibility in mind; only a few pieces even accommodate the components of a computer. Up until recently, the height of some monitors was adjusted with the use of telephone books.
As a result of this concern for the pending ergonomics legislation, and upon the recommendation of the CJPIA, staff sought the help of CARE Worksite Evaluators, a company that specializes in advising employers on compliance with Cal-OSHA standards, and preventive office and workstation evaluations.
CARE surveyed all of the workstations throughout City Hall and issued an Area Ergonomic Review for each department and workstation. Those Reviews are available by request.
A bid package containing instructions, the CARE Ergonomic Reviews, and a set of plans and specifications for each department and workstation was distributed to four suppliers: Cal Partitions, Inc., Office Depot, Herman Miller Workplace Resources, and Ergonomic Resources. The City received responses from two bidders:
CARE evaluated the bids received and recommended the bid received from Ergonomic Resources. CARE felt that Ergonomic Resources’ bid to be the most compliant with the RFP in regards to detailing the equipment specifications:
Ergonomic Resources workstations had adjustable work surfaces as opposed to Cal Partition’s wall mounted fixed height work surfaces that required adjustments to be made by Cal Partitions.
Adjustable Keyboard Trays
The bid submitted by Ergonomic Resources detailed each piece of an adjustable keyboard mechanism. CARE’s opinion of this Work Rite brand proposed by Ergonomic Resources was that it is well-designed and of high quality. The banana board style platform is well designed and can be used in both a corner as well as standard installation.
Cal Partitions did not specify the make, model or design of the adjustable keyboard mechanism. Based on the model demonstrated by Cal Partitions, CARE assumed that the tray they recommended has a mouse tray extension that is mounted on an articulating ball joint. They have experience with this style and have observed that the mousing platform locking mechanism can be moved while in use. The track glide is a plastic track versus the ball bearing track specified in the RFP.
The bid submitted by Ergonomic Resources detailed the type, style and features of the chairs. CARE felt that the ECD brand recommended by them was a well-designed and of high quality.
Although the bid received from CalPartitions did not specify the features of their recommended chair, the Therapod 500DT, based on the one demonstrated by them, CARE felt that it did meet the RFP specifications.
Recommendation: Request an increase of $63,342 in the budget for FY 02-03 in the Equipment Replacement fund.
Fiscal Impact: Using the high bid received from Ergonomics Research of $75,645, staff added a 15% contingency of $11,347 to arrive at a total budget requirement of $86,992. However, several departments have FY01-02 appropriations totaling $20,650, which will be brought forward to the FY 02-03 budget and one department has an appropriation of $3,000 for new furniture proposed in the FY 02-03 budget. These appropriations can be used to reduce the total required budget by $23,650. Therefore, if approved by the City Council, the Equipment Replacement fund would be reduced by $63,342.
FACILITY IMPROVEMENTS FOR BUILDING & SAFETY DIVISION AND CITY COUNCIL CHAMBERS
1. Building Modification to Building & Safety Division
As discussed in the section above, last year an outside consultant evaluated all of the workstations at City Hall for compliance with Cal-OSHA standards and also performed preventative office and workstation evaluations to determine if any ergonomic retrofits were required. For the Department of Planning, Building and Code Enforcement, an additional goal of public visibility was factored into the workstation evaluations.
Currently, due to existing interior walls and space limitations, the Building and Safety support staff are not as visible to members of the public who walk into the building, as the planning support staff. As a result, the workstation evaluators were given the additional task of coming up with recommendations for improving the visibility of the Building and Safety personnel. In response, the workspace evaluators provided a number of recommendations that necessitate minor modifications to the building’s interior. The modifications involve removing a portion of a non-bearing wall, moving a non-bearing wall 4 feet and re-locating the entrance to an office. It is estimated that these building modifications will cost no more $15,000 (including engineering costs).
Recommendation: Staff recommends budgeting $15,000 in FY 02-03 to complete the proposed interior building modifications.
Fiscal Impact: Funding for the building modifications to the Planning, Building and Code Enforcement building would reduce the General fund by $15,000.
2. City Council Chambers Modifications
In August 2000, the City Council approved a Cable Television Franchise Renewal Agreement with Cox Communications. As part of the new agreement, Cox was required to provide new audio and video equipment for the City Council Chambers at Hesse Park, which was installed about this time last year. Coincident with the installation of the new equipment, staff modified the room set-up to allow the inclusion of PowerPoint presentations as part of the Council meetings. This required shifting the City Council dais to one side of the room and separating the two staff tables that had previously formed a "horseshoe" design with the Council dais. By setting up the projection screen in the northwest corner of the room, the new set-up allows both the Council and the audience to have a clear view of the PowerPoint presentation. During the last year, the City has been using a portable screen set on top of two card tables for this purpose. While functional, this is not the most stable or efficient set-up. Therefore, staff is recommending that the Council Chambers be outfitted with a permanent pull-down screen that could be attached to the ceiling in the same location. This way, the screen would be easy to deploy, reducing meeting set-up time for the maintenance staff, and could be retracted out of the way when not in use, thereby maintaining flexibility in the use of the room and not creating a safety hazard. The cost for the purchase and installation of such a screen is estimated to be approximately $6,000.
As mentioned previously, the Council dais was shifted to one side of the room to accommodate the PowerPoint projection screen. However, instead of backing up to the back wall of the room as it did previously, the visual background behind the dais now includes part of the back wall, the emergency exit door and the small anteroom adjacent to the lobby. This arrangement does not provide a uniform, aesthetically pleasing background at Council meeting, both for the audience in the room and the viewing public watching on cable television. Staff considered several options to address this issue, such as a cyclorama curtain that could be pulled behind the dais during meeting or some type of permanent building modification. However, because of the multiple uses that take place in this room, staff felt that a portable space divider would be the best solution. A freestanding, curvilinear space divider could be used to provide an appropriate backdrop behind the Council dais and then be rolled up and stored away when not in use. The curvilinear panel could be set-up to allow access to the emergency exit door. An example of this product is shown in the brochure attached to this report. The panel can be customized to the City’s specifications in terms of length and color, and comes in several different heights. For a panel long enough to provide a backdrop behind the Council dais, staff estimates that the cost would be approximately $5,000.
Recommendation: Include $11,000 in the FY 02-03 budget to make further improvements to the City Council Chambers, including the installation of a permanent roll-up projection screen and a portable backdrop behind the Council dais.
Fiscal Impact: Funding for the City Council Chamber improvements would reduce the General fund by approximately $11,000.
CITY GRANT REQUESTS
Over the past several years, the Council has provided grant funding to selected non-profit agencies in the South Bay area. The following chart indicates the amounts that the City has provided for the last three fiscal years and the amounts included in the proposed FY 02-03 budget:
As reflected in the chart above, organizations that were new grant recipients in FY 01-02 included Dance Peninsula, the Peninsula Chamber Orchestra and Shakespeare by the Sea. Of these three, only Shakespeare by the Sea did not initially request funding in FY 02-03.
Shakespeare by the Sea
In FY 01-02, Shakespeare by the Sea received a $1,000 grant from the City and provided a free outdoor performance of "As You Like It" on the lawn area at City Hall. Last summer’s performance was well received by the public. Because it was the first time this group had requested a grant from the City, they made no request for grant funding in FY 02-03. However, based on their initial success, Shakespeare by the Sea recently requested a second grant in the amount of $1,200 for FY 02-03 (see attached letter from Lisa Coffi). In conjunction with the FY 02-03 grant, Shakespeare by the Sea is offering to provide a free performance of either be "Much Ado About Nothing" and "Macbeth" on a Sunday evening in August 2002 at City Hall.
In FY 99-00 and FY 00-01, Peninsula Seniors received a grant of $6,810 each year from the City. The City Council based the amount of the grant on a formula of $10 per member who was a Rancho Palos Verdes resident. In 2001, during the last two-year budget process, Peninsula Seniors reported that its membership had increased from 681 members who live in Rancho Palos Verdes in 1999 to 869 members in 2000 and requested that the grant be increased in FY 01-02 to $8,690, based on the $10 per RPV member formula. The primary reason given for the increase was to defray the organization’s increased cost to lease office space. In adopting the current budget, the City Council included a $8,040 grant to the Peninsula Seniors for both FY 01-02 and FY 02-03.
On April 10, 2002, Bill Baumann, President of Peninsula Seniors, submitted a letter requesting that the City’s FY 02-03 grant be increased by 40%, which equates to a total grant amount of $11,256. The additional grant request for FY 02-03 represents an increase of $3,216 above the $8,040 currently proposed for the FY 02-03 budget. Instead of using the $10 per City resident formula applied in the past, Mr. Baumann is asking for a percentage increase based upon a 37% increase in the group’s building rental costs, as well as an increase in staffing levels in response to a senior needs assessment study recently completed by the California State University at Long Beach’s Gerontology Department. Peninsula Seniors now employees a full-time Managing Director full time, a part-time Assistant to the Director, and a part-time Travel Assistant.
Recommendation: Staff recommends the City Council provide a $1,200 grant to Shakespeare by the Sea in FY 02-03. The City Council may wish to consider increasing the grant amount designated for Peninsula Seniors to $11,256, or some other amount as determined by the Council. If both grants were approved as requested, the total amount of funds for City Grants for non-profit organizations in FY 02-03 would be increased from $38,890 to $43,306.
Fiscal Impact: If the grant amounts requested by Shakespeare by the Sea and Peninsula Seniors are approved, the City Grants would reduce the General fund by $43,306 in FY 02-03. This would represent a $4,416 or an approximately 10% increase in the proposed grants budget.
3. Revisions to Proposed Budget for FY 02-03
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ASSISTANT CITY MANAGER
DATE: APRIL 30, 2002
SUBJECT: REVISIONS TO THE PROPOSED BUDGET FOR FY 02-03
Review the proposed changes to the FY 02-03 budget and provide staff with any comments.
In 2001, the City prepared its second two-year budget document for Fiscal Years 01-02 and 02-03. Even though the budget document covers two fiscal years, the City Council has only adopted the budget for FY 01-02. The budget for FY 02-03 is shown as "proposed" in the budget document. This was purposely done so that during the second year of the two-year budget cycle, the Council can make any necessary adjustments predicated on changes that may have occurred over the last year.
Staff has reviewed the proposed budget for FY 02-03 and identified several areas where circumstances have occurred since the final budget document was presented to the City Council in June 2001, which may require a change to the budget. Each proposed change is summarized in the chart presented on the next page, followed by a brief description. Most of the proposed budget increases to the General fund are minor or reflect decisions made by the City Council during FY 01-02. The most significant increase is to the contract with the City Attorney’s Office for litigation. With the exception of $28,000 in recently identified budget increases (Contract Minute Taker, Bank Fees and Finance Off-Site Storage), all of the other increases shown on the chart are also included in the 2002 Five Year Financial Model. In addition to the proposed General fund increases, there are several significant proposed reductions in the Capital Improvement Program. All of the remaining items (Gas Tax, Recycling and COPS/ LLESS) are funded through restricted funds or grants that can only be used for specific purposes. The net effect of the proposed changes is a $39,562 decrease in the overall FY 02-03 Budget, exclusive of the addition of any budget policy issues. Therefore, these changes are being presented separately to the City Council than the budget policy issues discussed previously in this agenda.
Below is a brief description of each proposed change to the FY 02-03 Budget:
City Attorney Contract for Litigation ($451,000)
The cost of legal services in prior years has been approximately $500,000 annually. However, this cost has risen in the last year as the result of on-going litigation, such as the Abrams commercial antenna and the Eschevarrieta view ordinance lawsuits. Staff proposes to increase the budget in FY 02-03 based on the unfavorable decision rendered by the Federal District Court in the Abrams matter and the Council’s recent decision to appeal that decision.
City Council and Finance Advisory Committee Minute Takers ($18,000)
In FY 01-02, the City Council directed the City Clerk’s Office to prepare more detailed minutes of Council meetings. In order to meet the demand, the City Clerk has used the services of a contract minute taker and proposes to continue this practice in FY 02-03. In addition, with the increased activity of the Finance Advisory Committee, the Finance Department is proposing to also use the services of a contract minute taker to prepare the official record of the Committee’s meeting. The proposed budget increase includes $9,000 for both the City Clerk’s Office and the Finance Department, for a total expenditure of $18,000.
Bank Fees ($5,000)
Bank of America provides account fee credits for balances maintained in a non-interest bearing checking account. Finance staff has been aggressively managing cash to minimize non-interest earning balances. As a result, the City's checking account is earning fewer fee credits. Staff recommends an adjustment to the proposed budget to accommodate bank fees no longer covered by fee credits. The estimated interest earned in excess of $10,000 as a result of the change in cash management offsets the bank fee charges.
Off-Site Storage of Finance Department Records ($5,000)
Due to the lack of storage space at City Hall, some of the Finance Department’s permanent records were moved to an off-site storage area during FY 01-02. The funds proposed for FY 02-03 are to maintain this off-site storage site.
Computer Network Support Services ($15,600)
Staff requests additional network support services provided by PVNET to maintain the system at its current operational level (240 hours @ $65/hour).
Staff requests support services for the new phone and voice messaging system provided by the equipment reseller, software licensor and PVNET.
Assistant City Manager Salary Allocation to Emergency Preparedness ($10,140)
As discussed in the Budget Policy Issues staff report, although the chart included in the published budget for Emergency Preparedness did not show any allocation of the Assistant City Manager’s salary to this program for FY 01-02 and FY 02-03, the City’s accounting software has been making the correct allocation for FY 01-02 and the discrepancy between the published budget and actual expenditures for FY 01-02 will be rectified at fiscal year-end. The discrepancy for FY 02-03 will be resolved as part of the adoption of the revised Emergency Preparedness program budget.
View Restoration Foliage Analysis ($35,000)
This increase includes two factors: 1) an significant increase in the number of City Street Tree Permits being filed and then processed by the View Restoration contract staff, and 2) the need for the planning staff to transfer the duties of performing foliage analysis for single family residential additions to the View Restoration contract staff in order for the planning staff to have adequate time to process the increasing number of Neighborhood Compatibility determinations.
Temporary Secretarial Assistance ($44,000)
The Recreation and Parks Department’s full-time Administrative Staff Assistant has been disabled since suffering an on-the-job injury in July 2000. The Department has used temporary clerical staff to fill the position since that time and is proposing to continue this practice in FY 02-03 until the status of this vacant position is resolved.
Right-Of-Way Maintenance ($19,000)
The request for additional funds is due to contract rate increases to provide regular maintenance of the City’s rights of way.
View Restoration City Street Tree Trimming ($19,500)
Due to an increase in the number of request to trim City street trees to restore views from adjacent residential properties, the Public Works Department has experienced increased maintenance costs to trim City trees in accordance with the permits issued by the Planning Department.
Recycling Beautification Grants ($40,000)
In FY 01-02, the City Council reinstated the Neighborhood Recycling Beautification Grant program and increased the level of funding for this program by $40,000.
CLEEP Grant ($40,728)
The City has entered into an agreement to transfer its all of its FY 00-01 California Law Enforcement Equipment Program (CLEEP) grant revenue to the Los Angeles County Sheriff in two annual installments. Upon entering into the agreement with the City and other cities the Sheriff currently serves, the County Sheriff used the CLEEP funds to develop the LARCIS program. The program will enable the County Sheriff to communicate more effectively with public safety agencies throughout Southern California using electronic media (e.g. the Internet and wireless devices).
CIP Storm Drain Master Plan Update ($40,000)
This project will update the Citywide Master Plan of Drainage to set parameters for storm drain improvements in areas outside of Palos Verdes Drive East.
Reductions in the Capital Improvement Program ($997,800 total reduction)
These line items, including On-Call Purchase Orders, Arterial Overlay Program, Drainage Improvements and Residential Overlay Program have been reduced as discussed in the staff report on the 2002 Five Year Financial Model.
Additional Traffic Signal ($135,000)
This line item has been established to provide a budget for the construction of a new traffic signal at a yet-to-be-determined location. Current candidate locations include the intersection of Palos Verdes Drive East and Miraleste Drive, and Palos Verdes Drive East and Palos Verdes Drive South.
Roof Replacement Program ($55,000)
This increase is to make needed roof repairs to several City buildings, as recently presented to the City Council.
Staff is requesting that the City Council review and concur with the proposed changes to the FY 02-03 Budget. If these changes are acceptable to Council, staff will prepare a resolution for adoption of the FY 02-03 Budget, which includes these amendments, as well as any budget policy items approved by the Council. This resolution is typically presented to the City Council at the first or second regular meeting in June. Once the FY 02-03 Budget is adopted, rather than re-print the budget document, the resolution approving the amendments will be inserted into the front of each document instead. This is the typical practice of cities during the second year of a two-year budget cycle.
ADJOURNMENT: Adjourn to 6:00 P.M. on Monday, May 6, at Hesse Park for interviews of Emergency Preparedness Committee applicants.