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TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ASSISTANT CITY MANAGER
DATE: JUNE 1, 2004
SUBJECT: ADOPTION OF THE CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2004-2005
After conducting a public hearing on the proposed FY 04-05 Budget: 1) Adopt Resolution No. 2004- ; approving the City Budget for Fiscal Year 2004-2005; and, 2) Adopt Resolution No. 2004- ; establishing salary and hourly ranges for competitive and management employee job classifications.
In 2003, the City prepared a two-year budget document for FY 03-04 and FY 04-05. Because it is the second year of the two-year budget cycle, the FY 04-05 budget is shown as “proposed” in the current budget document. Staff is now presenting the FY 04-05 Budget to Council this evening for adoption, which would go into effect on July 1, 2004. By adopting the City budget one year at a time, the Council has the opportunity to make any modifications it deems necessary to the proposed budget for FY 04-05, based on changes in circumstances that may have arisen since the document was prepared a year ago. To assist the Council, attached is a Fund Summary chart, which estimates the City’s fund balances for the fiscal year ending June 30, 2005 (see Attachment A).
Prior to the adoption of the FY 04-05 City Budget, staff would like to review the following two items for the Council’s information:
1. Modifications to the “Proposed” FY 04-05 Budget
On April 20, 2004 and May 4, 2004, staff presented the Council with proposed modifications to the FY 04-05 budget (see attached May 4th staff report). Based on those reports and feedback received from the City Council, staff has prepared a FY 04-05 City Budget resolution for adoption that incorporates the following:
? Includes the adjustments ($50,000) to the Department of Planning, Building and Code Enforcement budget discussed in the April 20th and May 4th budget staff reports. In addition, since the budget workshops, staff has added funds ($3,500) for a potential staff promotion in the City Clerk’s Office (see Attachment B).
? Continues to fund the City Grant Program at its current level of $30,000, with no new grants or increases to current recipients.
? Does not include any of the deferred budget items or new requests identified in the April 20th and May 4th budget staff reports (see Attachment C).
? Makes no change to the 3.9% employee merit pool currently included in the proposed FY 04-05 budget document.
? Does not include any changes in the City’s revenue projections for FY 04-05. Please refer to the more detailed discussion of this topic below.
2. Recommended Salary Range Adjustments
In an effort to keep the City’s salary ranges current, the City typically uses
the March Consumer Price Index (CPI) to adjust the salary ranges each year for
each of the City’s job classifications. The March 2004 CPI shows an increase
of 1.8% over the previous twelve months. Therefore, this figure has been used
in the attached Salary Range Adjustment resolution. The resolution also continues
the monthly car allowance for Department Heads and the Assistant City Manager
established by the Council in 1999.
City delegates to the League of California Cities (League) voted on May 13, 2004 to ratify the recommendation of the League board of directors for a two-part strategy to protect local revenues and reform the mandate process. The resolution adopted by the cities reaffirmed the League’s continued support for the Local Taxpayers and Public Safety Protection Act and supported the proposal extended by the Governor for local government funding reductions coupled with strengthened constitutional protections for local revenues.
The budget portion of the package will mean that local governments will endure two painful years of revenue losses totaling $1.3 billion for each year ($350 million from cities, $350 million from counties, $350 million from special districts and $250 million from redevelopment agencies). In exchange, the Governor made a commitment that he will work with local government officials for passage by the legislature and the voters of an alternative constitutional measure that would prevent any further state takeaways of local revenues needed to fund police, fire, health and welfare and other essential local services. Additionally, the package would constitutionally guarantee repayment of the VLF Backfill Loan of FY 03-04 to cities and counties in FY 06-07 and repayment of previously deferred mandate reimbursements to local governments commencing in FY 06-07. The ballot measure will require a 2/3 vote of the State legislature to pass.
The centerpiece of the proposal is a permanent reduction of the Vehicle License
Fee (VLF) rate from 2% to 0.65% (its current effective rate). This would trigger
elimination of the VLF backfill (approximately $4 billion) which would be replaced
with a like amount of “Property tax in Lieu of VLF”, dollar-for-dollar, except
for a two year reductions by cities and counties of $700 million ($350 million
each) in both FY 04-05 and FY 05-06. In the third year, cities and counties
would receive the full amount of the new Property Tax in Lieu of VLF in exchange
for the VLF backfill, and it would grow as property tax grows in the future.
This would increase every city’s and every county’s share of the property tax.
Based upon information developed by the League, it appears as though the City
would receive combined VLF and Property Tax in Lieu of VLF of about $2.4 million
during FY 05-06. The League’s calculations also include the repayment of the
FY 03-04 VLF backfill gap loan repayment of about $800,000 during FY 06-07.
Based upon its cursory review, Staff believes that the League’s calculations
Based on several changes that have occurred over the last year since the adoption of the two-year budget document, staff has revised and prepared a budget resolution for FY 04-05 for the Council’s consideration. If the Council desires to make any additional changes to the City Budget, those changes can be read into the record during tonight’s public hearing.
As discussed above, staff has incorporated several revisions to the budget document to reflect staff’s current understanding of expected expenditures over the next fiscal year, but has not made any changes to the previous conservative revenue projections, based on the continuing uncertainly regarding the outcome of the state budget crisis. The resulting budget for FY 04-05 is balanced (expenditures do not exceed expected revenues) and maintains a General fund reserve in excess of the City Council 50% policy. Staff has also prepared a resolution to adjust the City’s salary ranges and hourly rates based on the CPI over the last twelve-month period (March 2004 CPI). The City Budget for FY 04-05 is now being presented to the Council at a public hearing for review and adoption.
Resolution No. 2004- ; Approving a budget appropriation and adopting the operating
and capital improvement budget for Fiscal Year 2004-2005
RESOLUTION NO. 2004-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES APPROVING A BUDGET APPROPRIATION AND ADOPTING THE OPERATING AND CAPITAL IMPROVEMENT BUDGET FOR FISCAL YEAR 2004-2005.
WHEREAS, on April 20 and May 4, 2004, the City Council conducted budget work sessions on the proposed budget for fiscal year 2004-2005;
WHEREAS, on June 1, 2004, the City Council conducted an advertised Public Hearing to receive public input regarding the proposed budget for fiscal year 2004-2005;
BE IT, THEREFORE, RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES:
Section 1: That an Appropriation-Expenditure Budgeting Program showing budgetary categories by department is hereby adopted. The adopted budget, by fund, is per the attached Exhibit A with a total Estimated Ending Unreserved Fund Balance of $21,129,557 as of June 30, 2005, exclusive of the City’s Redevelopment Agency and Improvement Authority.
A. The City Manager is authorized to transfer certain Budget Appropriation Balances within functions and/or programs when he deems it necessary to do so in accordance with Chapter 3.32 of the Rancho Palos Verdes Municipal Code.
B. Council approval will be required for any significant changes involving increased or decreased service levels.
C. The Finance Director shall be responsible for constant monitoring of the budget and shall establish and implement appropriate control mechanisms necessary for said purpose, after approval of the City Manager.
Section 2: The 2004-2005 Revenue Budget is hereby adopted, establishing the following revenue and internal service fund contribution levels:
General Fund $12,081,300
Operating & Capital Fund Total $ 16,679,044
Internal Service Funds Contributions & Revenue:
Internal Service Fund Total $ 1,537,232
Section 3: The 2004-2005 Budget is hereby adopted, establishing the following transfers into the following funds:
General Fund $ 227,910
Total Transfers In $ 3,372,133
Section 4: The 2004-2005 Budget is hereby adopted, establishing the following transfers from the following funds:
General Fund $ 2,357,423
Total Transfers Out $ 3,463,633
City Council $ 90,012
Subtotal General Fund $ 11,554,456
Street Maintenance – Pavement $ 345,633
Subtotal Street Maintenance Fund $ 1,604,903
Subtotal Allocations $ 3,983,365
Internal Service Funds:
Subtotal Internal Service Allocations $ 1,626,039
Total Allocations $ 18,768,763
PASSED, APPROVED and ADOPTED the 1st day of June 2004.
State of California )
I, JO PURCELL, City Clerk of The City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2004-__ was duly and regularly passed and adopted by the said City Council at regular meeting thereof held on June 1, 2004.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES ADOPTING SALARY AND HOURLY RANGES FOR ALL COMPETITIVE AND MANAGEMENT EMPLOYEE JOB CLASSIFICATIONS, AND RESCINDING RESOLUTION NO. 2003-43.
WHEREAS, as part of the 1995-96 fiscal year budget, the City Council directed staff to conduct certain compensation studies measuring compensation data from both the public and private sectors. The compensation studies indicated that most of the City's job classifications were below the market median; and,
WHEREAS, on March 1, 1996, the City Council adopted Resolution No. 96-21 amending the salary ranges for all full-time employees and establishing the merit pool compensation system; and,
WHEREAS, on July 15, 1997, following the adopting of the FY 1997-98 City budget, the City Council adopted Resolution No. 97-69 which adjusted the salary and hourly ranges by two (2) percent; and,
WHEREAS, on June 3, 1998, following the adopting of the FY 1998-99 City budget, the City Council adopted Resolution No. 98-48 which adjusted the salary and hourly ranges by one and a half (1.5) percent; and,
WHEREAS, in late 1998, staff conducted a salary survey modeled after the 1995 study using the same survey pool of public agencies and, when possible, the same comparable positions. Based on the results of the updated survey, staff determined that the salary ranges for 16 positions required adjustment in order to be within 5% of the market median so that all City's salary ranges continue to be competitive with the marketplace; and,
WHEREAS, with the adoption of the FY 99-00 City budget, the City Council directed that the salary ranges for 16 job classifications be modified based on the 1998 salary survey. Further, the City Council directed that all City's salary and hourly salary ranges be adjusted two (2) percent based on the Consumer Price Index, so that all City's salary ranges continue to be competitive with the marketplace; and
WHEREAS, on June 1, 1999, following the adoption of the FY 99-00 City budget, the City Council adopted Resolution No. 99-42, which modified the salary ranges for 16 job classifications based on the 1998 salary survey, adjusted the salary and hourly ranges by two (2) percent based on the Consumer Price Index and provided a monthly car allowance for certain job classifications; and,
WHEREAS, on June 6, 2000, following the adoption of the FY 00-01 City Budget, the City Council adopted Resolution No. 2000-34 which adjusted the salary and hourly ranges by three and four tenths (3.4) percent based on the Consumer Price Index; and,
WHEREAS, on July 2, 2002, following the adoption of the FY 02-03 City budget, the City Council adopted Resolution No. 2002-56, which established the salary and hourly ranges for selected classifications at the 75th percentile and by the Consumer Price Index of 2.8%; and,
WHEREAS, with the adoption of the FY 03-04 City budget, the City Council directed that all City's salary and hourly salary ranges be adjusted three and nine tenths (3.9) percent based on the Consumer Price Index for the preceding twelve month period, so that all City's salary ranges continue to be competitive with the marketplace; and,
WHEREAS, with the adoption of the FY 04-05 City budget, the City Council directed that all City's salary and hourly salary ranges be adjusted one and eight tenths (1.8) percent based on the March 2004 Consumer Price Index for the preceding twelve month period, so that all City's salary ranges continue to be competitive with the marketplace; and,
WHEREAS, the adoption of the new salary ranges will not automatically result in the adjustment of any employee salaries.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
Section 1: The success of any plan in the public or private sector is dependent upon occasionally adjusting the salary ranges to be competitive with the marketplace.
Section 2: The salary and hourly ranges for City job classifications are adopted as outlined in the attached Exhibit "A."
Section 3: Resolution No. 2003-43 is hereby rescinded.
Section 4: A monthly car allowance for certain job classifications is adopted as outlined in the attached Exhibit “B.”
PASSED, APPROVED and ADOPTED this 1st day of June 2004.
STATE OF CALIFORNIA )
Monthly Salary Annual Salary
Monthly Salary Annual Salary
POSITION MONTHLY CAR ALLOWANCE