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HomeMy WebLinkAbout02- City Manager CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM CITY MANAGER'S OFFICE To: Mayor and C moron Council From: Fred Wils ty Manager Subject: Budget Update and Next Steps Date: July 15, 2008 At the last several budget workshops,the Mayor and Common Council have approved in concept a total of $11,977,500 in budget-balancing measures, lowering the deficit from $17,362,900 million to $5,385,400. The attached spreadsheet summarizes the recommendations that remain for Council consideration at this time. Please note that three layoffs previously proposed in the Information Technology Department have been removed from the list, pending a revised proposal that is being developed by IT and the Police Department. The revised proposal would achieve a similar amount of savings through cuts to IT's maintenance and operations accounts, and holding 2 Police Records Technicians vacant (one employee would be laid off). At the last budget workshop, a staff report was provided outlining several options for placing potential revenue measures on the November 2008 ballot. Councilmember Brinker raised the concept of a potential library revenue measure, and the matter was continued to July 16. Since the July 7 meeting, Councilmember Brinker has been working with staff and Library Board representatives to pursue the library revenue concept, and he will provide a verbal update at the meeting. In addition to discussing the ballot measures, the purpose of the July 16 meeting is primarily to update the Mayor and Council regarding discussions with our employee groups. The results of those discussions will determine our next steps. If we are unable to reach agreement with the employee groups, additional budget cuts will have to be made in order to achieve a balanced budget. We strongly recommend that a final resolution on these issues be made by the end of July,in order to maximize the savings that can be realized in the new fiscal year. 7/i(o/o�' N .O h N t T � q � q r U v o N o E a N N - m O 0 J U m N v °n E o m `o c 3 c m a C U d m 0 = N _ N Z U U ', E y O m woo ° .` C v O. l0 N Ti O T N > C m T 'E V E E w o- m m m m E M c v m r c m '^ > o 0 QmoE € — ¢. wm c 'o w N c 2 0 w� U m E o 'm m `v `0 av r :N a w ._ v O1 (q y m N p `CtJi..- " 0 `oa a u vvvJN OiEn Jo mica 'a vowel m `oim oic NC ' J >N C C m d �o E ..�u 4° d o O N o« O i rn C . jC y o _ C C.N O NiCU N N O - o o `o `o `o v p =' a a b E 0 z a9 m `w mmmmm� 6E a zxw 5mN o.¢ a aaawSo. 00 a _ — _ - o oN tn 0 �r r °Q uW i j N C>N v 8 tN e O 7 8.[7 0oQ f 0oM 0oO�0o1� 0 o N 0 o O� 0 mo 000 A O w O 0 W0 o C O 0(O '. 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Fund: 001 Department:Police Division: Various Net Potential Expenditure Savings and/or Revenue Increase: $653,600 Summary of Proposal: The Police Department will transition from a District Command community policing model in community storefronts,to a District Command community policing model centralized in the Police Department. This includes the following realignment and reassignment of personnel: 1. Upgrade (1)Police Lieutenant's position to a Police Captain. 2. Create a fourth Police Division to level out administrative workload and reduce the City's liability. 3. Divide the City into (4) geographic District Commands (instead of five). 4. Close(6) Community Service Offices and station District Commanders at the central Police Department. Create virtual web-based community service offices to enhance communication; use advanced technology in personal devices for area commanders, to give them real-time access by the community 5. Increase the number of Patrol beats from (21)to (28). 6. Reassign District Command personnel to increase Crime Impact Teams from(2)to (4). 7. Upgrade (1) Community Service Officer II position to an Information Analyst I to develop and transmit real-time crime maps to police officers on patrol. 8. Reassign District Command Detectives to the Detective Bureau to enhance follow-up investigations. 9. Retain(1)CSO I position to handle the administrative and clerical work of the(4) District Lieutenant's that will be housed at the central police facility. Proposal Implications (pros/cons): Pros: 1. Increased efficiency of department operations and better utilization of reassigned personnel. 2. Improved management oversight of critical department operations and corresponding decrease in City liability. 3. Budget savings totaling $653,600 due to savings in salaries, rent and utilities. Step No.of Monthly Monthly Months Classification Range Positions Salary Benefits Vacant Total Captain 5 1 $12,530 $4,759 12 $207,470 Less: Lieutenant 5 1 $12,172 $3,545 12 $188,606 Lead Sergeant: (Stipend only) 5 4 $500 12 $24,000 Sergeant: District Administrative S t 5 1 $9 522 $3272 10 $127,943 District Administrative Sgt 5 1 $9,522 $3,272 10 $127,943 Chiefs Executive Officer (Sergeant)-x months 5 1 $9,522 $3,272 12 $153,531 Detective: District Detective 5 1 $7 701 $3.219 11 $120,124 Detective 5 1 $7,701 $3,219 6 $65,522 Detective 5 1 $7,701 $3,219 6 $65,522 Information Analyst I (crime mapper) 1/2 1 $4,743 $1,426 12 $74,024 Less: Community Sry Off II 16 1 $3,420 $1,426 6 $29,076 Total Personnel Savings j $620,800 District Office Rent $29,000 Alarm maintenance $3,800 Total M&O $32,800 Grand Total Savin s $653,600 Cons: 1. Closure of Community Service Offices that may be perceived as a decrease in the police presence in neighborhoods where the offices are located. BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description:As part of reorganization of the Police Department—Vacate (2)CSO I positions Fund.001 Department: Police Division: Various Net Potential Expenditure Savings and/or Revenue Increase: $113,000 Summary of Proposal. As part of the Department's proposed reorganization,2 CSO I's would be eliminated. Since a separate proposal calls for holding current vacancies,this would require a layoff. Proposal Implications (pros/cons): Pros: 1. Increased efficiency of department operations and better utilization of reassigned personnel. 2. Improved management oversight of critical department operations and corresponding decrease in City liability. 3. Budget savings totaling $766,616 due to savings in salaries,rent and utilities. Cons: 1. Closure of Community Service Offices that may be perceived as a decrease in the police presence in neighborhoods where the offices are located. 2. Requires layoff. Community Service Officer I (Layoffs of last 2 hired CSO 1) 16 2 $3,250 $1,460 12 $113,000 ',/15/2008 10:38 AM BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description: Position Reductions—Full Time Fund: 124 Department: Animal Control Division: Field Services Net Potential Expenditure Savings and/or Revenue Increase $48,000 Summary of Proposal: Eliminate Customer Service Position in License Office(filled) $48,000 Proposal Implications (pros/cons): Pro: Eliminating the Customer Service Representative will result in the least impact to department's primary function of animal control field service and public safety. The position is not directly related to providing contract services to other cities. The license office is located at the animal shelter but is physically separated from the adoption office. It is open to the public 6 days per week, Monday through Saturday. To accommodate the loss of the Customer Service position, the license office will go to a five day a week operation. It will be staffed by the License Office Supervisor. The Adoption office will pick up any overflow work and will remain open 6 days a week to handle transactions previously handled by the License Office. In the absence of the License Officer Supervisor,the adoption office staff will handle license sale transactions. License revenue will not be impacted by this cut but an increase wait time to purchase a license can be expected. Con: Elimination of the Customer Service Position will result in a layoff. License Office will close on Saturday and business will be handled from the main Animal Shelter Adoption Office. Increase in wait time to get a license. BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description: Eliminate Part Time Staff Fund: 001 Department: 141 -Civil Service Division: 141 Net Potential Expenditure Savings and/or Revenue Increase: $16,000 Summary of Proposal: The only discretionary funds in the Civil Service Department outside of the funding for the Chief Examiner(required by City Charter)and 2 full time employees is$16,000 for a part-time Clerk and $6,400 for the bare-bone materials and supplies(M&O)required to run the Department for the next fiscal year. Since staffing and M&O are already reduced to minimal amounts,this proposal involves the only other discretionary areas left: Eliminate the Department's part time Clerk Proposal Implications (pros/cons): Elimination of Part-Time Clerk: This position is budgeted to work the equivalent of 3-3.5 days a week, and augments the 2 regular staff of the Civil Service Department. The workload assigned to this position has increased over 200% when compared to the same time last year and the 2 regular positions cannot absorb these duties without service impacts. The result will be negative impacts on the services provided to Departments, including Civil Service's services to the Water Department, which generate $67,000 in revenue to the City's General Fund. Additionally service levels to employees and job applicants will be reduced, and the time it takes to complete testing/selection processes will increase. Recently the Civil Service Department and Human Resources exchanged offices. Part of this move was specifically intended to transfer most of the responsibility for the 2nd floor front counter(serving citizens,employees and job applicants)to Civil Service. The Civil Service Department's primary functions and responsibilities also frequently require regular staff to be out of the office to conduct testing and support the Civil Service Board during regular meetings and disciplinary appeal hearings. (For example, it is not unusual for the Chief Examiner to be in attendance at a hearing for one or more days, 1 of the 2 other employees to be manning the tape equipment to record the proceedings, and the remaining employee to be conducting/proctoring candidate testing—leaving no one in the Civil Service Offices.) Without this part time position to augment regular staff, it will be impossible to schedule these required functions(or cover sick leave and vacation absences) and still have staff in the office to continue processing job applications and respond to job candidates, or to answer phones and provide service at the front counter. The Human Resources Department will also be impacted by front counter traffic that needs services HR can't provide. Civil Service is also responsible for determining seniority,bumping rights and order of layoff when there is a reduction in staff. Given the current budget issues and the likelihood of layoffs, Civil Service's workload will be increasing at the same time this position is eliminated. BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description: Layoff one(1)Plumber Fund:001/325 Deparanem: Facilities Management Division: Building Maintenance Net Potential Expenditure Savings and/or Revenue Increase: $65,500 Summary of Proposal. The Building Maintenance Division has one (1) Plumber position that is filled at this time. Staff proposes that this person be layed off for the coming year. Proposal Implications (pros/cons): Pros: Cost savings through employee layoff. Cons: Lower level of customer service. Building maintenance has one plumber to provide maintenance service to over 48 locations, and this will require the division to contract for this work. Potentially there will be cost savings for one year,but then the deferred maintenance will have a negative impact. 7/15/200810:34:34 AM BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description: Vacate(1) Police Records Tech I position Fund: 001-General Fund Department:Police Division: 222 Net Potential Expenditure Savings and/or Revenue Increase: $41,500 Summary of Proposal. Upgrades to the FileNET system will allow one Records Technician position to be held vacant. The efficiency gained by the FileNET upgrade allows one filled position to be vacated and maintain the same volume of Police report scanning. Proposal Implications (pros/cons): Pros: 1. Use of technology to achieve annual salary savings of$41,500. Cons: Requires a layoff. BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description: Reorganize the Streets Division;vacate one Maintenance Supervisor and 3 Maintenance Worker II's Fund:001 Department: Public Services Division: Streets Net Potential Expenditure Savings and/or Revenue Increase: $352,400 savings Summary of Proposal: Eliminate one maintenance supervisor position and eliminate three maintenance worker II positions. In addition,reduce the impact of maintenance services on the general fund by transferring $150,000 in gas tax to the general fund. We can minimize the impact of this force reduction if we phase out one maintenance worker II position in October and one in January to match expected retirements. The third maintenance worker II recently resigned. Additionally,the maintenance supervisor will bump back to a leadworker. Therefore there will be no layoffs as a result of this proposed reorganization. Bu transferring$150,000 from the gas tax fund to the general fund we will further reduce the impact of street maintenance services on the general fund and realize an overall $352,400 savings in general fund expenditures. Proposal Implications (pros/cons): If this proposal is approved we would eliminate one supervisor position and three maintenance worker positions. The proposal would result in the elimination of one of the two right of way crews. Right of Way crews currently work seven days a week to remove illegally dumped materials,weed spray throughout the community, clear channels, and other miscellaneous work to improve the appearance of the City. Under this proposal,the service would be reduced to five days per week. This section now cleans between 400-600 illegal dumping locations per month. The use of work sentence crews will offset some of the impacts of this cut. The concrete maintenance, asphalt maintenance,drain maintenance,tree maintenance, and right of way maintenance sections have a total of twenty seven full time employees. With approval of this reduction in force, along with elimination of three vacant positions detailed in a separate proposal, total staffing would be reduced to twenty. There will be extended wait time to repair streets, sidewalks, clearing storm drains and channels, which do pose increased potential liability exposure. 7/15/2008 1:29 PM BUDGET SAVINGS PROPOSAL SUMMARY Proposal Title/Description: Eliminate Part Time Salaries in the Fleet Division Fund:Fleet Department: Public Services Division: Fleet Net Potential Expenditure Savings and/or Revenue Increase: $60,200 savings Summary of Proposal. Funding for part time positions in the Fleet Division would be eliminated. Proposallmplicadons (pros/cons): Fleet Services uses part time personnel to assist with equipment maintenance. These employees will assist by travelling to pick up parts or change tires and other miscellaneous work that would otherwise be handled by a mechanic. Cutting these funds will mean parts pick up,tire changing and other support activities will have to be handled by mechanics or an Equipment Service Worker. Funds saved by this reduction will reduce the total number of full time positions needed to be eliminated. CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION From: Fred Wilson Subject: Discuss and take possible action City Manager regarding potential ballot measures for the November 2008 ballot Date: July 1, 2008 M/CC Meeting Date: July 7, 2008 Synopsis of Previous Council Action: June 25, 2008 - Mayor and Council are presented the report from Competitive Edge Research regarding potential ballot measures Recommended Motion: Discuss and take possible action. 'Aignature Contact person: Lori Sassoon Phone: 5122 Supporting data attached: staff report Ward: All FUNDING REQUIREMENTS: Amount: none Source: (Acct. No.) (Acct. Description) Finance: Council Notes: Agenda Item No. - 314 7 7. D? STAFF REPORT Subiect: Discuss and take possible action regarding potential ballot measures for the November 2008 ballot Backaround Over the last several months, work has been in progress on a three-part strategy to address the City's budget shortfall for FY 08-09. The three parts are: • Budget reductions and new revenues • Potential revenue measures approved by the voters • Employee cost-sharing After several months of research by staff and discussions with the Budget Ad Hoc Committee, a poll was conducted to gauge voter opinion regarding several potential ballot measures. Any potential measure for the November 4, 2008 ballot must be submitted to the Registrar of Voters no later than August 8. The potential measures included in the poll were a quarry tax, warehouse tax, transient lodging tax (TLT) increase, removal of the exemption from UUT for city of Riverside water pumping activities, and a 911 communications tax. The following gives a brief description of each measure, and shows the potential annual revenue that may be generated by each of these measures. Please note that staff has made its best efforts with the information available to develop these estimates: Increase TLT from 10% to 12%: Potential annual revenue: $620,000 The TLT, or "bed tax" as it is sometimes called, is collected and remitted by hotels and motels. The TLT is a preferred tax measure from the administrative viewpoint; it provides a stable revenue source, and its remittance can be audited. Ouarry tax($.18/ton): Potential annual revenue: $300,000 - $500,000 The quarry tax, formally known as the extraction and processing tax, is a form of business registration tax. Like all taxes, increases to the business registration tax rate and/or broadening of the tax base is subject to voter approval. According to information provided by the County of San Bernardino and the State Department of Conservation, the City currently has two (2) mines that would be subject to the tax (see attached maps). One of the mapped sites is currently exempted from business registration tax, based on the location of its administrative offices; however, the County and State staff confirm that both sites are within the City's jurisdiction for the purposes of the Surface Mining Control and Reclamation Act (SMCRA), and therefore the source of the mine's aggregate material is from within the City's boundaries. ` Page 2 The revenue estimates associated with the tax are based on the most recent mining tonnage information as provided to the State. The most recent data reported to the State is for the calendar year 2006. Tonnage varies from year to year, and therefore revenues will vary. The tax rate of $.18 per ton is based on the FY 08-09 rate of $.1782 per ton in the city of Highland. Highland's tax was adopted in 1998, after encountering opposition from quarry operators. The Highland tax escalates by the rate of CPI annually, with a cap at $35 cents per ton. Other entities with quarry taxes locally include the City of Upland. Staff met with staff in the city of Irwindale, which is home to large quarry operators, and that City provided helpful information regarding the potential tax. Based on staff s research, the quarry tax is perhaps the most complex potential revenue measure and poses the most administrative challenges. First, with one of the mining sites straddling the city boundaries, it will be important to carefully monitor remittances and verify that tax is properly applied when the aggregate materials are extracted from and/or processed on property that is within city boundaries. Verifying the tonnages reported for tax purposes may be difficult; the City of Highland uses annual comparisons of aerial photography, and uses a consultant's engineering calculations to verify the operator's reports. If mining activity shifts into unincorporated areas, revenues will decline significantly. However, given the impact of quarry operations on air quality and road conditions, the tax is certainly appropriate and may provide significant revenue. Other sites may fall under the tax and therefore provide additional revenue, if new mining operations begin, and/or other sites are processing rock materials that have not yet been identified by staff. UUT on Riverside wells: Potential annual revenue: $100,000 The City's UUT of 7.75% applies to electricity, gas, and communications services. Chapter 3.44.050-B of the Municipal Code contains the following exemption from the UUT on electricity: B. As used in this section, the term "using electrical energy" shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him for use in an automobile or other machinery or device apart from the premises upon which the energy was received; provided,however, that the term shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term include the mere receiving of such energy by an electric public utility or governmental agency at a point within the City for resale; or the use of such energy in a production or distribution of water by a public utility or governmental agency; or the use of such energy utility or a governmental agency; or the use of such energy for the production and distribution of water for lawn and landscape irrigation of cemeteries.(emphasis added) The effect of this exemption is that electricity used by the City of Riverside in its water pumping operations in the city is not subject to the City's UUT. As you are aware, the City of Riverside has water well sites throughout the city, and pumps much of its water supply from within San Page 3 Bernardino. Working with utility data and with the assistance of the City's Water Department, staff estimates that this exemption costs the City approximately $100,000 annually in lost revenue. With voter approval, the WT ordinance could be amended to remove this exemption. Other language in this section would also be clarified so that only the City, its Water Department, and other government office operations continue to be exempted. Warehouse tax: Potential annual revenue: $300,000 The warehouse tax is another form of business registration tax. A warehouse tax was adopted by Redlands voters in 2007, and applies primarily to warehouse distribution facilities. Based on the polling data, the warehouse tax is only marginally viable. 911 communications tax: Potential annual revenue: $4 million Fee of $1.50 per telephone line (landline and cell) would be imposed and collected via phone bills. A fee study completed for the City in April 2006 provides the basis for the fee amount. Some of the additional revenue might be used to increase Police dispatch capacity to receive 911 calls directly from cell phones. Based on the polling data, the 911 tax does not appear viable. Discussion At the June 25 budget workshop, the polling consultant presented the results of the survey, and the final report was provided to you. In summary, they concluded that the quarry tax and WT exemption removal were the most viable, while the TLT increase would be most viable if it is placed on the ballot as a lone measure. The 911 communications tax does not have voter support, while the warehouse tax is considered marginally viable. Interestingly, placing the TLT on the ballot with the quarry tax and WT item decreased support for the TLT increase (see p. 20 of the report), although its inclusion did not seem to erode support for the other two. Based on the analysis, and in order to provide the most potential revenue to the General Fund, staff recommends that the Mayor and Council discuss and take possible action regarding the following options: Option A: Quarry Tax and WT exemption removal This option places only two (2) measures before the voters. Based on the polling data, it would gain the most likely voter support. If passed, these items would provide approximately$400,000 - $600,000 annually. Option B: TLT This option places the TLT measure on the ballot alone. It would provide roughly $620,000 annually. OOotion C: Quarry Tax and TLT This option provides $1 - $1.2 million on an annual basis. Page 4 Option D: Quarry Tax, TLT, UUT This option places all three viable tax measures on the ballot. It would provide $1.1 — 1.3 million on an annual basis. While the polling data did not show that the number of measures on the ballot would be a significant factor impacting support or opposition,there are concerns that at some point, the voters might feel that there are too many measures for consideration. Financial impact: In any scenario, staff would recommend that the City conduct a publicly-funded public information effort in order to inform and educate voters regarding the measures. With the high turnout expected and large number of items on the November ballot, this public education will be important. A budget of approximately $75,000 would need to be provided, and has not yet been budgeted. According to the Registrar of Voters, the estimated cost for placing measures on the November 2008 ballot is currently $103,300 for one measure, $123,900 for two measures, or $144,000 for three measures. This cost has also not yet been budgeted, and may vary from the estimates. It should also be noted that if the measures pass, they will not take effect immediately, so a full year of revenue will not be received. After taking into account the costs for public education and the election, any measure would provide only a modest net revenue benefit in FY 08-09. However, for FY 09-10, these measures would provide significant revenues that will help the budget situation in that year and beyond. Recommendation: Discuss and take possible action.