Rancho Palos Verdes City Council
   

JUNE 1, 2004 ADOPTION OF THE CITY BUDGET AND EMPLOYEE SALARY RANGES FOR FISCAL YEAR 2004-2005

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

RECOMMENDATION

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.

BACKGROUND

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).

DISCUSSION

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 two new capital improvement projects in the budget, the Residential Slurry Seal and Overly Program ($1.1 million) and the Phase I Storm Drain Lining Program ($500,000), for a total expenditure of $1.6 million. Since the adoption of the two-year budget document in June 2003, funding for these two projects became available from the $1.7 million San Ramon Drainage Improvement Project insurance settlement (see Attachment B).

? 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.
Generally, adjustments to the City’s salary ranges and hourly rates do not result in employees receiving automatic increases. However, because the City has filled a few positions over the last year at the bottom of the current ranges, their salaries would fall below the range after the new schedule goes into effect on July 1, 2004. Because the cost of these adjustments will be minor, they can be accommodated in the budget as proposed. With the exception of these few adjustments, the existing method of employee compensation, whereby the amount of any salary adjustment is based on an employee's annual performance evaluation, will remain in place.


STATE LEGISLATIVE UPDATE – FISCAL IMPACT TO THE CITY OF RANCHO PALOS VERDES

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 $2,338,784 during FY 04-05, net of revenue reduction of $347,902, in accordance with the Governor’s proposal. The FY 04-05 Proposed Budget includes Estimated Revenue from combined VLF and Property tax in Lieu of VLF of $831,300 during FY 04-05, a favorable difference of about $1.5 million ($2,338,784 per the Governor’s proposal less $831,300 VLF included in the FY 04-05 Proposed Budget). The proposed FY 04-05 Budget was based upon the exclusion of VLF backfill.

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 are reasonable.
In light of future uncertainty, including the requirement of 2/3 vote of the State legislature and passage of the November 2004 ballot measure, Staff recommends adoption of the City’s FY 04-05 Proposed Budget as presented, based upon the exclusion of VLF backfill. In the event the State legislature and the voters pass the proposed constitutional amendment in November 2004, Staff would timely present appropriate revisions to the adopted FY 04-05 budget (i.e. deferred capital improvement projects).

CONCLUSION

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.

Respectfully submitted:


Carolynn Petru
Assistant City Manager

Attachments:

Resolution No. 2004- ; Approving a budget appropriation and adopting the operating and capital improvement budget for Fiscal Year 2004-2005
Resolution No. 2004- ; Adopting salary and hourly ranges for all competitive and management employee job classifications

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
Capital Improvement Projects Fund 6,600
Utility Undergrounding Fund 4,900
Roadway Beautification Fund 9,300
Street Maintenance Fund 842,000
Landscape/Street Lighting (1972 Act) Fund 328,130
El Prado Lighting District Fund 1,400
Community Development Block Grant Fund 229,404
Street Lighting (1911 Act) Fund 341,900
Beautification Fund 209,200
Waste Reduction Fund 146,100
Air Quality Management Fund 49,100
Street Improvement/Transit (Proposition C) Fund 459,300
Transit (Proposition A) Fund 548,200
Public Safety Grants Fund 115,070
Habitat Restoration Fund 1,900
Subregion One Maintenance Fund 17,900
Parks/Building Maintenance (Measure A) Fund 59,000
Abalone Cove Sewer District Fund 50,000
Park Development (Quimby) Fund 24,830
Affordable Housing In-Lieu Fund 965,510
Development Impact Mitigation (EET) Fund 188,000

Operating & Capital Fund Total $ 16,679,044

Internal Service Funds Contributions & Revenue:
Equipment Replacement Fund $ 510,872
Building Replacement Fund 29,500
Employee Benefits Fund 996,860

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
Capital Improvement Projects Fund 2,322,171
Street Maintenance Fund 745,300
Habitat Restoration Fund 76,752

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
Landscape/Street Lighting (1972 Act) Fund 285,000
Community Development Block Grant Fund 34,410
Waste Reduction Fund 65,000
Street Improvement/Transit (Proposition C) Fund 532,300
Transit (Proposition A) Fund 15,500
Public Safety Grants Fund 115,000
Parks/Building Maintenance (Measure A) Fund 59,000

Total Transfers Out $ 3,463,633
Section 5: The 2004-2005 Operating and Capital Improvement Budget Programs are hereby adopted, establishing the following allocations and directing the City Manager to amend the preliminary budget to reflect said amounts:

City Council $ 90,012
City Attorney 700,000
City Manager 794,649
Administrative Services/City Clerk 248,128
Community Outreach 83,401
RPV TV Channel 33 10,000
Personnel 84,584
Finance 772,306
Information Technology – Data 453,339
Information Technology – Voice 69,396
Public Safety - Sheriff 2,834,608
Public Safety - Neighborhood Watch 2,700
Public Safety - Special Programs 31,811
Public Safety - Animal Control 121,459
Public Safety - Emergency Preparedness 105,296
Public Works - Administration 459,118
Public Works – Traffic Management 149,290
Public Works – Storm Water Quality 211,590
Public Works - Building Maintenance 393,795
Public Works – Parks, Trails & Open Space Maintenance 591,404
Public Works – Parks, Trails & Open Space Improvements 12,500
Planning 980,356
Building & Safety 573,168
Code Enforcement 126,339
View Restoration 379,434
Natural Community Conservation Planning 61,606
Geology 140,000
Recreation - Administration 401,901
Recreational Facilities 302,293
Recreation – Special Events 19,376
Recreation - Point Vicente Interpretive Center 241,648
Recreation - REACH 108,949

Subtotal General Fund $ 11,554,456

Street Maintenance – Pavement $ 345,633
Street Maintenance – Non Pavement 1,175,028
Traffic Management (Traffic Signal Maintenance) 84,242

Subtotal Street Maintenance Fund $ 1,604,903
Capital Improvement Projects Fund $ 2,322,171
Landscape/Street Lighting (1972 Act) Fund 56,700
El Prado Lighting District Fund 900
Community Development Block Grant Fund 194,994
Street Lighting (1911 Act) Fund 367,600
Beautification Fund 241,467
Waste Reduction Fund 133,828
Air Quality Management Fund 49,913
Transit (Proposition A) Fund 441,792
Habitat Restoration Fund 100,000
Subregion One Maintenance Fund 24,000
Abalone Cove Sewer District Fund 50,000

Subtotal Allocations $ 3,983,365

Internal Service Funds:
Equipment Replacement Fund $ 605,779
Building Replacement Fund 25,000
Employee Benefits Fund 995,260

Subtotal Internal Service Allocations $ 1,626,039

Total Allocations $ 18,768,763

PASSED, APPROVED and ADOPTED the 1st day of June 2004.


___________________________
ATTEST: MAYOR


_____________________
CITY CLERK

State of California )
County of Los Angeles )ss
City of Rancho Palos Verdes )

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.

___________________________
CITY CLERK
RESOLUTION NO. 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 June 5, 2001, following the adoption of the FY 01-02 City budget, the City Council adopted Resolution No. 2001-44, which adjusted the salary and hourly salary ranges by three and six tenths (3.6) 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.


___________________________
MAYOR
ATTEST:


_____________________________
CITY CLERK

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )


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 a regular meeting thereof held on June 1, 2004.


___________________________
CITY CLERK

EXHIBIT “A”
SALARY AND HOURLY SCHEDULE
FOR COMPETITIVE AND MANAGEMENT POSITIONS

Monthly Salary Annual Salary
COMPETITIVE POSITIONS BOTTOM TO TOP BOTTOM TO TOP
Account Clerk 2,852 – 3,704 34,229 – 44,454
Account Technician 3,209 – 4,168 38,509 – 50,012
Accountant 4,145 – 5,383 49,742 – 64,600
Accounting Manager 5,378 – 6,985 64,541 – 83,819
Administrative Analyst 3,784 – 4,914 45,406 – 58,969
Administrative Analyst II 4,376 – 5,683 52,515 – 68,201
Administrative Staff Assistant 3,187 – 4,138 38,238 – 49,660
Assistant Planner 3,905 – 5,071 46,858 – 60,855
Assistant to the City Manager 5,489 – 7,129 65,872 – 85,548
Associate Engineer 5,146 – 6,683 61,748 – 80,192
Associate Planner 4,437 – 5,763 53,248 – 69,153
Code Enforcement Officer 3,783 – 4,914 45,402 – 58,963
Deputy City Clerk 3,813 – 4,952 45,753 – 59,420
Engineering Technician 3,631 – 4,716 43,573 – 56,588
Executive Staff Assistant 3,813 – 4,952 45,753 – 59,420
Maintenance Superintendent 5,174 – 6,720 62,089 – 80,635
Maintenance Worker 2,386 – 3,099 28,637 – 37,190
Maintenance Worker II 2,712 – 3,522 32,542 – 42,262
Permit Clerk 2,792 – 3,626 33,506 – 43,514
Principal Planner 5,566 – 7,229 66,794 – 86,746
Project Manager (Temporary position in PW) 5,764 – 7,485 67,939 – 88,233
Recreation Program Supervisor II 3,988 – 5,179 47,853 – 62,147
Recreation Services Manager 4,682 – 6,080 56,182 – 72,963
Senior Administrative Analyst 4,901 – 6,365 58,814 – 76,382
Senior Code Enforcement Officer 4,237 – 5,503 50,874 – 66,305
Senior Engineer 5,764 – 7,485 69,162 – 89,821
Senior Planner 4,970 – 6,454 59,638 – 77,452
Staff Assistant I 2,457 – 3,191 29,485 – 38,293
Staff Assistant II 2,792 – 3,626 33,506 – 43,514

Monthly Salary Annual Salary
MANAGEMENT POSITIONS BOTTOM TO TOP BOTTOM TO TOP
Assistant City Manager 5,906 – 10,577 70,866 – 126,924
City Clerk 5,465 – 9,255 65,578 – 111,059
Deputy Director of Public Works 5,465 – 9,255 65,578 – 111,059
Deputy Planning Director 5,465 – 9,255 65,578 – 111,059
Director of Finance & Information Technology 5,906 – 10,577 70,866 – 126,924
Director of Recreation and Parks 5,906 – 10,577 70,866 – 126,924
Director of Administrative Services 5,906 – 10,577 70,866 – 126,924
Director of Public Works 5,906 – 10,577 70,866 – 126,924
Director of Planning, Building & Code Enforcement 5,906 – 10,577 70,866 – 126,924


Monthly Salary
PART TIME POSITIONS BOTTOM TO TOP
Administrative/Cable Intern 12.70 – 16.49
Crossing Guard 9.21 – 11.96
Permit Clerk 16.11 – 20.92
Recreation Leader 8.13 – 10.56
Recreation Leader II 9.24 – 12.00
Recreation Specialist 12.70 – 16.49
Staff Assistant I 14.17 – 18.41
Staff Assistant II 16.11 – 20.92


EXHIBIT “B”

POSITION MONTHLY CAR ALLOWANCE
Assistant City Manager 150
Director of Administrative Services 150
Director of Finance & Information/Technology 150
Director of Recreation and Parks 150
Director of Planning, Building & Code Enforcement 150
Director of Public Works 150