HomeMy WebLinkAbout02.E- City Manager RESOLUTION(ID #2023) DOC ID: 2023 A
CITY OF SAN BERNARDINO— REQUEST FOR COUNCIL ACTION
Budget
From: Andrea Travis-Miller M/CC Meeting Date: 08/29/2012
Prepared by: Heidi Aten, (909) 384-5122
Dept: City Manager Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Adopting the Pre-
Pendency Budget Plan.
Financial Impact:
Account Budgeted Amount: «Inert Amount>>
Account No. <<Insert Account No»
Account Description: <<Insert Account Description
Balance as of: <<Insert Date>>
Balance after approval of this item: <<Insert Amount>>
Please note this balance does not indicate available funding. It does not include non-encumbered
reoccurring expenses or expenses incurred, but not yet processed.
Motion: Waive full reading; and adopt the Resolution.
City Attorney Review:
t Supportine Documents:
Resolution Adopting Pre Pendency Budget Plan 8-27-12 (DOC)
Updated: 8/28/2012 by Linda Sutherland A
mm
1 RESOLUTION NO.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
3 CITY OF SAN BERNARDINO ADOPTING THE PRE-PENDENCY BUDGET PLAN
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5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE v
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CITY OF SAN BERNARDINO AS FOLLOWS: m
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7 SECTION 1. That the pre pendency budget plan dated August 23, 2012 and attached hereto as
Exhibit"A" is adopted. m
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Packet Pg. 74
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO ADOPTING THE PRE-PENDENCY BUDGET PLAN
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
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Common Council of the City of San Bernardino at a meeting thereof, held on a
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6 the day of 2012,by the following vote,to wit: m
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7 Council Members: AYES NAYS ABSTAIN ABSENT
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MARQUEZ m
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JENKINS
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VALDIVIA o
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JOHNSON d
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MCCAMMACK 00
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Georgeann Hanna,City Clerk a
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19 The foregoing Resolution is hereby approved this day of 2012.
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21 Patrick J. Morris, Mayor 4
22 City of San Bernardino 0
Approved as to
23 form:
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26 James F. Penman
City Attorney
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Packet Pg. 75
Proposals
1 Staffing efficiencies previously adopted by Council $950,000
2 Cut One Battalion,reassign personnel to engine companies $713,431
3 Eliminate P position(4a'FF on ME231) $150,000
4 Eliminate Dispatch Supervisor $100,000
5 Eliminate discretionary money $82,000
6 Eliminate vacant Fire Prevention Officer $83,000
7 Consolidate fire and city mechanic shops(building lease amount $60k, staff, 60,000- ???
utilities, economy of scale)
8 Eliminate EMS Coordinator position $100,000
Efficiencies to Eliminate/Defer Administrative Expenses
1 Reduce Firefighter overtime by filling Vacant Firefighter positions
2 Extend Current Promotional Lists until exhausted
3 Train new firefighters during shift training,instead of a Fire Training Tower
Proposals
2 Cut One Battalion,reassign personnel to engine companies
This will reduce the fire departments ability to respond a second chief officer to an incident, and
possibly,other administrative duties may fall behind. The administrative responsibilities would
need to be prioritized,and assistance from other qualified department personnel would be
implemented. Incident Command responsibilities would continue to operate effectively, as the
Engine Company Captain would assume these responsibilities until the arrival of the Shift
Battalion Chief,unless a person is trapped and is in need of rescue. All Captains are currently
certified and proficient as Incident Commanders. This initial assignment would reduce the initial
attack capability by one person,rather than the 'Brown Out'alternative,which reduce the initial
fire attack by one engine and THREE firefighters, eliminating any possibility of rescuing a
person in need. By initially eliminating only one firefighter,versus three for an extended
duration of the event, firefighters will be able to perform duties more efficiently(safely and
effectively)thereby reducing the city to the exposure of worker injury.
3 Elu'li aig.PLposition(4a'FF on 2=�
The elimination of the firefighter assigned to ME231 will reduce the engine companies
effectiveness on the shift he is currently assigned(38% less effective). The engine will no longer
be able to deploy sufficient firefighters inside a burning building upon arriving; to look for
survivors(2 in/2 out OSHA rule)until an additional engine company arrives. With three
personnel, the engine company will ONLY be able to enter a burning building once it HAS
BEEN DETERMINED that a person is indeed trapped in the fire. The firefighter injury rate
increases as much as 36%when staffing is reduced from 4 to 3.
1 of 3 .2 9 Z
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4 Eliminate Dispatch Supervisor
The current dispatch supervisor would be reduced to senior dispatcher and would be assigned to a
dispatch console. There is currently a Shift Battalion Chief who is assigned as the administrator
of dispatch who can remain responsible to oversee administrative operations, and the on duty
Battalion Chief would be able to make day to day decisions, similar to when the current dispatch
supervisor goes home at the end of the shift.
5 Eliminate Discretionary Money
6 Eliminate Vacant Fire Prevention Officer
The position is currently vacant and the duties have been effectively reassigned.
7 Consolidate Fire and City Mechanic Shops(building lease amount$60k, staff, utilities, economy
of scale)
The current building being used by fire maintenance costs $60,000 per year. With the
consolidation of the City and Fire operations, several cost savings can be realized. Fire
mechanics would be specifically utilized for fire pumps and other fire engine specific equipment,
but all mechanics would be able to work on all vehicles oil,tires,engines, etc. The utilities,
maintenance, specialized equipment, stock of parts and supplies, and re-evaluation of mechanics
and supervisors all will benefit from economy of scale.
8 Eliminate EMS Coordinator Position
The EMS Coordinator position responsibilities can be accomplished with on duty personnel.
Several firefighters are local and nationally certified instructors, are responsible to precept new
paramedic students from outside colleges,and have been actively involved with the FD EMS
Committee work. Two current Station 221 Captains have performed the work of EMS
Coordinator in the past, and will be able to provide the same level of attention the duties require.
In addition, EMD should become the responsibility of the EMS Coordinator and Committee with
the elimination of the dispatch supervisor.
Efficiencies to Defer Administrative Expenses
1 Reduce Firefighter Overtime by Filling Vacant Firefighter positions
If vacant firefighter positions are filled with permanent employees, existing firefighters overtime
will be reduced by 4,800 hours per month.
2 Extend Current Promotional Lists until exhausted
Currently,there is an active promotional list for Captain, Engineer, and a hiring list for new
2of3
firefighters. By extending the lists until all candidates have been exhausted,the department will
defer or eliminate the expense of re-testing when qualified members are available.
3 Train new firefighters during shift training, instead of a Fire Training Tower
Since 2006,the department has hired small groups of firefighters and provided orientation and
basic training through a'Tower' lasting as little as four weeks to as much as eight weeks.
Although this method of training is preferred, it is very costly. The tower provides the basic
training and then sends the candidates to the field(on shift)for practice and testing(of the same
material covered during the tower). All candidates are certified and licensed by the state as
Paramedic or EMT, so no medical training is performed. While on shift,the Captains are
responsible to insure the new employees are following procedure and performing skills
according to department evaluations. The new employees are tested by the department training
personnel (truck companies)at 3 month intervals over the entire scope of training. The
elimination of the formal tower training will reduce the firefighter overtime by a minimum of
360 hours per person, and not modify shift training or quarterly evaluations.
3 of 3
PRE-PENDENCY PLAN
City of San Bernardino
San Bern IRO
Drafted By:
Andrea Travis Miller, Acting City Manager
Jason Simpson, Finance Director
Michael Busch, President, Urban Futures Inc.
August 29, 2012
TABLE OF CONTENTS
INTRODUCTION.........................................................................................................................................1
I. FISCAL EMERGENCY................................................................:.................................................9
A. What is the Purpose of a City?......................................................................:i....................9
B. A Service Level Emergency Creates a Fiscal Emergency..................................................9
C. Fiscal Emergency Legal Authority ...................................................................................10
D. Evidence of San Bernardino's Fiscal Emergency.............................................................I 1
II. DECLINING REVENUES AS A FACTOR CONTRIBUTING TO THE STRUCTURAL
DEFICIT........................................................................................................................................15
A. The Recession has Taken a Toll on the San Bernardino Economy...................................15
B. San Bernardino Revenues Have Decreased, With Only Moderate Growth Forecast
GoingForward..................................................................................................................16
C. General Fund Expenditures...............................................................................................21
III. PERSONNEL & RETIREMENT COSTS AS A FACTOR CONTRIBUTING TO THE
STRUCTURALDEFICIT.............................................................................................................24
A. Overview of Pension Benefits..............................................................:............................24
B. Overview of Other Post-Employment Benefits ................................................................26
C. The City's Retirement Contributions are Steadily Increasing...........................................27
D. The Primary Cause of the Dramatic Increase in Retirement Costs is a Significant
Increase in Unfunded Liabilities.......................................................................................28
E. The Impact of Enhanced Benefits.....................................................................................29
F. Failure to Meet Earnings Expectations.............................................................................30
G. Increase in the Number of Retirees...................................................................................31
H. Conclusion........................................................................................................................31
IV. EFFORTS TO ADDRESS THE FISCAL CRISIS AND CONSIDERATION OF
ALTERNATIVES TO C14APTER 9 BANKRUPTCY.................................................................33
A. Past Budget Workshops and the City's Budgetary Analysis and Recommendation
forBudget Sustainability...................................................................................................33
B. Best Cases Revenue Scenario Does Not Solve the Problem.............................................37
C. CONCLUSION.................................................................................................................38
V. BUDGET&OPERATIONAL RESTRUCTING PLAN...............................................................39
A. Preliminary Fiscal Year 2012-13 General Fund Budget...................................................39
B. Fiscal Year 2012-13 General Fund Reduction Methodology ...........................................40
C. Preserving Essential Safety Services.................................................................................41
D. Maintaining the City's Investment in Infrastructure Through Service Delivery
Changes in Community Development, Public Works, and Parks, Recreations &
CommunityServices.........................................................................................................54
E. Implementing Service Efficiencies and Consolidation of Administrative Services
Functions...........................................................................................................................61
F. Summary of Proposed Staffing Reductions......................................................................68
LIST OF TABLES
Table 1 -5 Year Budget and Fund Balance Estimates (Amount in Millions)......................................... 1
Table 2-Major Revenue Trends from 2008-2012...............................................:............................. 2
Table 3 -Historical Home Starts, Sale and Investment...................................................................... 3
Table 4-Land Use by Net Taxable Value ......................................................................................1 4
Table 5 -Sales Tax Comparison..................................................................................................... 4
Table 6-Historical Pension Expenses............................................................................................. 5
Table 7- 5 Year(2012-13 to 2016-17)Budget Projections by Department.......................................... 6
Table 8-Land Use by Net Taxable Value ...............................................................:......................17
Table 9—Property Tax Revenue 2002-2003 to 2011-2012................................................................18
Table 10—Sales Tax Revenue 2002-2003 to 2011-2012...................................................................19
Table 11 —Utility Tax Revenue 2002-2003 to 2011-2012.................................................................20
Table 12—Revenues vs.Expenditures(10 Year).............................................................................22
Table 13—Enhanced Pension Formulas for the City's Retirement Pl ans.............................................25
Table 14—Other Post-Employment Benefits Annual Pay—Go Estimates...........................................26
Table 15—CalPERS Actuarial Valuation Rate—Miscellaneous Plan.................................................27
Table 16—CalPERS Actuarial Valuation Rate—Safety Plan.............................................................28
Table 17—City Contribution Retirement Rates(as a Percent of Payroll) ............................................28
Table 18—Proposed Fire Department Staffing Reductions ...............................................................48
Table 19—Proposed Sworn Staffing Reductions .............................................................................50
Table 20—Proposed Non-Sworn Staffing Reductions......................................................................52
Table 21 —Total Estimated Savings...............................................................................................54
Table 22—Proposed Public Works Staffing Reductions...................................................................59
Table 23—Proposed City Clerk Staffing Reductions........................................................................62
Table 24—Proposed Information Technology Staffing Reductions....................................................63
Table 25—Proposed Human Resources Staffing Reductions.............................................................65
APPENDICES
Appendix A Summary of Revenues,Expenditures and Changes in Fund Balance(General Fund)
Appendix B Fiscal Year 2012-2013 Pre-Pendency Plan
ii
INTRODUCTION
San Bernardino is facing a crisis. To address budget shortfalls in thirteen of the past sixteen years, the
City has already cut staffing levels, added new revenue sources, expended reserves, and is now faced
with eliminating services and programs. Nonetheless, to correct for the City's further projected
shortfalls in the current year and over the years just ahead, the level of required cuts must be done in
such a manner to allow the City to provide acceptable services. For example,the City is faced with the
undesirable prospect of closing fire stations, libraries and community centers, while still not having
enough money to fund acceptable levels of police and fire protection. This statement of crisis is not
made lightly, but reflects the Administration's profound concern that San Bernardino faces a service-
level crisis that can only be classified as a fiscal emergency.
The primary focus of this report is on the City's General Fund, which supports a large majority of
municipal services. However, the impact the negative cash of roughly $18 million and escalating
operational costs affects all City funds and services. As the General Fund balance continues further into
the negative and operational costs escalate, it drives up the cost for sewer services, integrated waste
fund, Internal Service Funds, the Development Fee Program, and other special funded services paid by
every resident through monthly fees and other direct assessments.
While a number of factors have contributed to this crisis, by far the most significant and difficult to
control has been increasing operating costs occurring at a time when the City's revenues continue to
decline. As the chart below depicts, as of June 30, 2011 the City's fund balance has declined to a
negative $1.2 million. Without substantial and immediate restructuring of the organization, both
operationally and financially, the City will not be able to provide basic services.
Table I 5 Year Budget and Fund Balance Estimates (Amount in Millions)
Actuals–2006-09 to 201011 Projected Budget 2011-12 to 2016-17
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
» 150.00
c
c 100.00
f 50.00 Expenditures
oiiiiiiiiiiii Revenue
(50.00)
(100.00) —Fund Balance
(150.00)
(200.00)
(250.00)
Declining Revenues
Since the City's peak General Fund revenue of$133 million in 2008, the City has experienced severe
losses in key areas such as sales tax, property tax, franchise fees, utility users tax (UUT), permits, and
funds transferred from the Economic Development Agency (EDA). The chart below details the
reduction of roughly$11.69 million in General Fund revenues.
Table 2-Major Revenue Trends from 2008-2012
Revenue Source Peak Revenue 2011-12 Revenue Variance
2007-2008
Property Tax Secured $11.6M $9.5M ($2.1M)
Property Tax in Lieu of $18.9M $153M ($3.2M)
Vehicle License Fees
Sales Tax $22.3M $19.03M ($3.27M)
Franchise Fees $3.32M $2.88M ($450K)
Utility User Tax $24.4M $22.5M ($1.9M)
Licenses and Permits $9.2M $8.6M ($600K)
Totals $89.72M $78.21M ($11.69M)
The chart above is consistent with the findings in other California cities. However, many cities in
California have begun to recover from declines in revenues. With the exception of sales tax, most
significant General Fund revenues remain flat or are increasing extremely slow to the point that prior
peak levels are not expected to be reached within the next five years. Overall, General Fund revenues
remain roughly$11.7 million below peak levels.
Of specific concern are revenues derived from property taxes which continue to be impacted by a
significant drop in housing prices in 2008 and on-going foreclosures throughout the City. According to
recent housing data, the City may have reached the bottom of the decline in housing values. This
doesn't mean prices will increase significantly any time soon. Usually towards the end of a housing
bust, normal prices move sideways for a few more years, and real prices adjusted for inflation could
even decline for another two or three years.
It is reasonable to assume housing values will stabilize and begin to grow at some point in the very near
future; if it hasn't begun already. The chart below provides an illustration of the national housing
market since 1968. While this may be the steepest decline in over 40 years, we shouldn't assume an
aggressive recovery of investment or pricing. Rather, the Administration is assuming flat property tax
revenues for residential properties in 2012-2013 with slight growth over the next fiscal years.
Commercial properties continue to search for the bottom, as evidenced by the $17.2 million of non-
residential property tax appeal exposure for fiscal year 2012-2013.
Table 3 -Historical Home Starts,Sale and Investment
Comparing Peaks and Troughs for Starts,New Home Sales,and Residential Investment
—Starts,Slnalo-Family --Naw Home Sales —Residential Investment as Percent of GDP
ZGOO 7.0%
7,800
YY" tW�r 6.0%
50%
L200
4.0%
z Low
_- a.D%
-- — -- ------
a
600 LO%
2 400 — – --
zoo ---�-
D
7mP:tlw.®Iaasmws.�N
Because we do not anticipate much growth with housing new starts or employment in the near future,
and with the loss of the EDA, the Administration assumes construction-related permit activity will also
be flat or possibly continue to decline. Permit activity in most California cities has been very volatile
with trends pointing to decreasing activity.
The chart below reflects the City's property tax base according to land use. Typical of a large, older
community,the City is fairly balanced with 52%of taxable property as residential, 19%commercial and
15% industrial. Despite the diversity in property tax generation, 80% of the City's taxable parcels are
residential. Because of the high percentage of residential parcels, service requirements will remain high
and a sustainable and resilient revenue base is vital to supporting essential City services.
Table 4-Land Use by Net Taxable Value
Category Net Taxable Value Number of Parcels
Sesidential $5,337,905,953 44,947 Land Use by Net Taxable Value
Commercial $1,966,781,002 2,295 Nisallaneous
I%
Industrial $1,55],715,525 721
Miscellaneous $86,979,310 346 G.:.ent
Government $5,39],890 12
Institutional $56,282,161 207
Dry Fartn $1,382,1fl5 7 NWNYNOnal
6eorsational $25,292,404 58 6ryflt 1%
Irrigated $43,094 1
Rew ft ntl
Vacant $356,918,0]9 4,524 � 0%
Exempt $0 3,347 Vauru erlptw
Outer Parcels $7,500 9 4% M
SSE Nonunitary $5,219,774 54 IM
Personal unsec) $862,093,032 %967 O%
Outermost,
Unknown $24,201,315 61 0,s
$10,305,219,224 56,526
SaE NarxMkwy
0%
Sewn:114L 2011-I2lraperq Tax SapwN _... _-
Based on data provided by HdL,the City's sales tax revenue diversity reflects the statewide average for
all business types(see charts below).
Table 5 - Sales Tax Comparison
City of San Bernardino Statewide Totals
■ Restaura ■ Restaura
■ Business ■ Food and nts& ■ Business ■ Food and nts&
and Drugs Hotels and Drugs, Hotels,
Industry 6.03% 11.60% Industry, 6.60% 13.00%
12.71% 16.51%
■ General
■ General Consume
Consume r Goods,
■ Buildin rGoods 27.06%
29.75%
and ■ Buildin
Construct
and
ion Construct
10.17% ■ Autos ■ Fuel and ion ■ Autos ■ Fuel and
and Service 7.80% and Service
Transport Stations Transport Stations,
ation 14.16% ation, 14.52%
15.57% 14.50%
The overall diversity of the sales tax base within the City presents an opportunity for future revenue
growth. The City's population, size, and opportunities for economic development of former EDA
properties provide for an optimistic outlook. Despite these positive traits, the City will need to play a
role in job creation in order to fully realize its true sales tax potential. As of June 2012, the
unemployment in San Bernardino was 19.9%. When compared to the State of California and San
Bernardino County unemployment figures for April 2012 of 10.9%and 11.7%respectively,we begin to
understand this as a component of a decline in sales tax-generating revenues well below the peak in
2008.
In order to restore revenues to prerecession levels,multiple voter approved measures would be required.
With local voter reluctance to increase taxes, the City's revenue generation options are significantly
limited by required majority voter approval (50%+1)for general taxes and two-thirds voter approval for
service-specific taxes.
Increasing General Fund Operating Costs
Over the past ten years, the City's population has grown by roughly 13% resulting in increasing
demands for services to the community. In order to meet growing service demands, the City has
maintained a workforce exceeding 1,140 employees. Maintaining a large workforce has exposed the
City to rising operational costs outside of the City's control. Despite recent reductions of 250
employees, retirement costs have increased from $6 million in 2000-2001 to $22 million in 2009-2010
(see the chart below).
Table 6 -Historical Pension Expenses
25000000 ■2005 Series A-2 Capital
20000000 - Appreciation Bonds
■Employee Portion
15000000
■Police
10000000
5000000 ■Fire
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 a Misc
While the City's pension costs have been growing steadily over the past several years, significant
increases are due to the City's decision to implement enhanced retirement plans for all employees. A
secondary impact, and of less significance, are increases to the total number of retirees and investment
losses by the City's retirement administrator; the California Public Employee Retirement System
(Ca1PERS). To mitigate increasing retirement costs and to manage long-term retirement liabilities, the
City reduced its total workforce and implemented a two-tier retirement plan,which provides basic level
retirement benefits to all new employees.
Even after these considerable workforce reductions and numerous other cost-reduction strategies
implemented by the City, the General Fund shortfall for 2012-2013 is projected at $45 million, which
represents 30% of total projected General Fund Expenditures for the coming fiscal year. The following
chart further illustrates the degree to which prior efforts to stabilize operational costs are unsustainable
i beyond 2011-2012.
{
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Table 7-
5 Year(2012-13 to 2016-17)Budget Projections by Department
2008-09 2009-10 2010-112011-12 2012-13 2013-14 2014-15 2015-16 2016-17 0 Police
« 180.00 -- ■Fire
C
—_° 160.00
■General Government
140.00
■Public Works
120.00
100.00 ■Community
Development
80.00 ■Parks&Recreations
60.00
■City Attorney
40.00
20.00 ■Debt Service
■City Clerk
■Finance
As a result of the above trends, personnel costs are consuming progressively larger portions of the
City's operating budget resulting in unsustainable workforce levels.
Debt Obli atg ions
The City also has significant bond indebtedness obligations. As noted in the chart below, the City's
General Fund has roughly $90 million of outstanding debt obligation. Additionally, with the loss of
redevelopment and the City's election to be the Successor Agency, the City, has additional debt
obligations of roughly$200 million.
City of San Bernardino Lease Revenue Refunding Bonds Series 1996 $16,320,000 12/18/1996
San Bernardinoloint Powers Financing Auth Public Facilities Lease Revenue Refunding Bonds,1997Series A $10,370,000 7/31/1997
San Bernardinalalnt Powers Financing Auth Refunding C ertificates of Participation $15,480,000 9/29/1999
City of San Bernardino Taxable Pension Obligation Bonds,2005 Series A-1 $36,050,000 10/28/2005
City of San Bernardino Taxable Pension Obligation Bonds,2005Series A-2 $14,351,583 10/28/2005
San Bernardino Joint Powers Financing Auth Tax Allocation Refunding Bonds,Series 1998A $27,590,000 412/1998
San Bernardino Joint Powers Financi ng Auth Subordinated Tax Allocation Refunding Bonds,Series 1998B $ 8,590,000 4/2/1998
San Bernardino Joint Powers Financing Auth Tax Allocation Bonds,series 2002A $ 3,635,000 1/24/2002
San Bernardino Joint Powers Financing Auth 2002 Tax Allocation Refunding Bonds $30,330,00D 4/11/2002
San Bernardino Joint Powers Financing Auth Tax Allocation Revenue Refunding Bonds Series 2005A $55,800,000 9/30/2005
Sa n Berna rdino Joint Powe rs Fi nan ci ng Auth Tax Allocation Revenue Refunding Bonds Series 20058 $21,105,000 9/30/2005
San Bernardino Joint Powers Financing Auth Tax Allocation Bonds(20%Set Aside)Taxable Series 2006 $28,66,000 4/26/2006
San Bernardino Joint Powers Financing Auth Tax Al location Bonds Series,2010A $ 7,06,000 12/23/2010
San Bernardino Jolnt Powers Fi nand n Auth Tax Allocation Bonds Series,20308 $ 3,220,000 2/9/2011
City of San Bernardino Limited Obligation Improvement Bonds,Assessment District No.96 $ 1,101,62 2/28/1990
City of San Bernardino Limited Obligation Improvement Bonds,Assessment District No.987 $ 709,105 12/18/1991
Prepored by.Urban Futures,Inc. I
Budgetary Impacts
Unfortunately, there is no "silver bullet" for increasing revenues significantly or stabilizing operational
costs. The rapid disparity between revenues and expenses is due to significant declines in general taxes
and increases in personnel and debt liabilities.
The Budget Sustainability Plan presented to City Council in June 2012 contemplates a range of potential
solutions to address the General Fund structural imbalance in an effort to continue to provide essential
City services. These strategies are being actively pursued, and include but are not limited to creating a
cost sharing retirement program, investigating raising the real property transfer tax, stabilizing medical
costs by sharing plan increases with employees, eliminating sick leave payouts, regionalizing services,
and reducing the burden of the constant manning provision within the Fire Department. Unfortunately,
these solutions alone are not projected to be sufficient. Although the City has been successful in
achieving some cost reductions, other City proposals will require further collective bargaining with its
employee bargaining units and, in some instances, Charter changes via the electoral process. Further,
while additional revenue would be very beneficial, increasing revenue rates and/or sources will, again,
require a vote of the people,with such approval doubtful in the current economic environment.
Given all of the above constraints, some have suggested that the City should simply take actions to sell
City assets, such as integrated waste operation, lease-revenue opportunities from cell towers located on
City owned land and local water rights. Unless there is a specific and sound basis for selling City assets
which provide continuous annual revenues to the City, this approach could jeopardize the long-term
sustainability of City operations.
San Bernardino faces a service-level emergency and must now address its financial issues through a
comprehensive approach and significant operational and financial restructuring.
CONCLUSION
The outlook for City services, already reduced over the last three years because of the severe economic
downturn, remains bleak for 2012-2013 and beyond. While the City has been managing deficits, the
.shortfalls in recent years have become increasingly difficult to resolve as wave after wave of revenue
losses have continued to hit. The Administration believes that the next round of workforce cuts
required to balance the budget in the face of such a severe deficit will be best implemented and
managed through an analysis of impacts to the department, organization, individual wards and
community compared to prospective financial savings, as outlined in the following matrix.
X
X
X
X
X
Using the above methodology, all non-essential programs were evaluated prior to their submittal for
reduction or elimination. The recommendations contained in this report reflect reductions in workforce
or programs based on the lowest possible impact to individual wards and the community possible while
meeting the City's budget reduction goals.
L FISCAL EMERGENCY
A. What is the Purpose of a City?
In recent years, the City'of San Bernardino has made efforts to implement strategies of fiscal
prudence and good management. In particular, the City is struggling to balance its budget amid
weakened revenues and rising costs, including rapidly-increasing personnel costs. The City is a
service organization with approximately two-thirds of the City's General Fund budget
attributable to personnel costs. Unlike a private employer,a public agency cannot simply decide
to go"out of business" or otherwise stop providing certain essential services to the public.
Under the California Constitution, cities have broad authority and responsibility in the areas of
public health and safety. See Cal. Const, Art. XI, § 7 ("A county or city may make and enforce
within its limits all local, police, sanitary, and other ordinances and regulations not in conflict
with general laws."). However, while a city's powers are derived from the state constitution
and other laws enacted by the Legislature, cities themselves are created only by the request and
consent of the residents in a given area. Because of this, municipal governments are responsible
for providing services that directly affect the lives of their residents. Through fire and police
protection,cities safeguard lives and property. Through public works and other programs, cities
construct and maintain streets and look after the health, recreational, and social needs of
residents. Charter cities like San Bernardino are formed when citizens specifically frame and
adopt a charter to establish the organization of and basic laws of the city.
The core purpose of the City of San Bernardino is to provide essential services to the public as
established in its City Charter. San Bernardino's essential functions are set forth in its Charter,
which identifies the establishment of certain City Departments including Police, Fire, Water,
Parks and Recreation, and Library. Notably, although the Mayor and Common Council may at
any time abolish or discontinue some departments,the Mayor and Common Council is required
to provide those services established under the Charter.
B. A Service Level Emergency Creates a Fiscal Emergency
In fulfilling its core purpose of providing essential services,the City must navigate between City
Charter requirements and Mayor and Common Council mandates. On the one hand, the City
Charter establishes departments as set forth in the paragraph above for the purpose of providing
basic municipal services. On the other hand, the City Charter requires the City to balance its
annual budget. Currently, the City is unable to comply with both of these City Charter mandates
and provide basic municipal services to City residents. Unfortunately, on August 1, 2012, the
City filed for Chapter 9 Bankruptcy and will likely be forced to reduce services below those
levels acknowledged by the City Council as the baseline for basic municipal services in order to
balance its annual budget for 2012-2013. All projections show that recessionary affects will
remain and additional cuts may be required to balance the upcoming 2013-2014 budget, as
required by the Charter.
The meaning of the term "emergency" may vary depending on the context in which it is used.
While some courts have defined an "emergency" as "an unforeseen situation calling for
immediate action," not all emergencies occur in an instant, like an earthquake. An employer's
dire financial condition —which worsens over a period of time -may qualify as an emergency
justifying the suspension or modification of certain contractual obligations.
A public agency's inability to provide essential services is a strong indication of a fiscal
emergency. As noted by the Governmental Accounting Standards Board (GASB), the common
themes that have been either formalized or are working definitions of financial sustainability
include the ability to continue public services and/or existing programs. This comports with
the definition of"financial condition" adopted by the International City/County Management
Association (ICMA). In particular, ICMA defines a municipality's financial condition as the
ability to (1) maintain existing service levels, (2) withstand local and regional economic
disruptions, and (3) meet the demands of natural growth, decline, and change. ICMA also
categorizes financial solvency in four distinct ways:
1. Cash solvency: government's ability to generate enough cash over a 30 to 60 day period to
meet its obligations.
2. Budgetary solvency: government's ability to generate enough revenues over its normal
budgetary process to meet its expenditures and not incur deficits.
3. Long-run solvency: government's ability to meet expenditures that may not be addressed
as part of the normal recurring annual budgetary process.
4. Service-level solvency: government's ability to provide services at the level and quality that
are required for the health, safety, and welfare of the community and to meet its citizens'
desires.
This report focuses on all categories above: Moving forward as a well-run and forward-looking
city, San Bernardino must budget in an effort to meet its contractual obligations, build reserves
and ensure that budgetary shortfalls are addressed through balancing actions each year.
However, the City has reached the point at which previous budget balancing actions combined
with the budgetary outlook for 2012-2013 and beyond have triggered a financial and service-
level emergency,jeopardizing the health and safety of San Bernardino's residents. The threat
posed by continued service reductions is imminent, and despite all other measures taken to this
point and those still to be implemented, no viable alternative plan that is sufficient to address
this problem has been identified that does not require major changes in services delivery of all
departments and changes to the City's compensation strategy. As such, the Administration
believes San Bernardino faces a service-level emergency, a form of fiscal emergency which
requires Chapter 9 Bankruptcy protection while we get our fiscal house in order.
C. Fiscal Emergency Legal Authority
In this plan, the evaluation of conditions for declaring a fiscal emergency and subsequent filing
for Chapter 9 protection has focused on the primary causes of the current condition,which are
declines in revenue and increases in operational costs. Therefore, the goal has been
development of solutions that appropriately addresses the primary causes of the City's current
fiscal situation within the City legal limitations.
iu
While no California cases have upheld an impairment of a government entity's own contract,
case law from other jurisdictions supports the notion that a public agency's inability to provide
essential services is a strong indication of a fiscal emergency. In those jurisdictions,courts have
recognized that a sharp decline in revenues coupled with the concurrent inability to provide
essential services constitutes an "emergency" justifying the impairment of contractual
obligations. For example, in Subway-Surface Supervisors v. N.Y.C. Transit Authority, 44
N.Y.2d 101 (1978), the New York Court of Appeals upheld the City's suspension of a
wage increase set forth in the City's collective bargaining agreement,where the City's fiscal
emergency would have rendered it unable to "provide essential services to its inhabitants or
meet its obligations to the holders of outstanding securities," and, without cuts, it would not
have been able to pay employee salaries or its vendors and would have defaulted on payments
due on other outstanding obligations.
Federal and State courts recognize the constitutional power of a local municipality in response
to an emergency to act in the public's interest, to preserve the health, safety and well-being of
City residents. The scope of the power includes the ability to impair contract obligations under
certain limited circumstances. As such, the Mayor and Common Council elected to declare
Chapter 9 Bankruptcy to address the City's structural imbalance while preserving essential
services to the community.
D. Evidence of San Bernardino's Fiscal Emergency
1. San Bernardino's Inability to Provide Services at Required Levels
As demonstrated below, the rise in salary and retirement costs combined with decreased
revenues (which have declined in absolute terms, and are not projected to grow at a rate
sufficient to keep up with these expenditure increases) have staggering implications on
San Bernardino's ability to provide essential services. The San Bernardino City Charter
provides guidance as to which services are "essential" to the City: Administration,
Police,Fire, Water, Library, and Parks and Recreation are some of the service-providing
departments specifically established pursuant to the City Charter. Other departments,
such as Finance, Personnel, and Community Development, are not directly established
by City Charter but are obviously necessary to support the City's operations.
Since 2007-2008, the General Fund has experienced shortfalls which were addressed, in
part, with the elimination of approximately 250 positions citywide. Previous budgets
closed General Fund shortfalls through a combination of strategies including,
reduced/eliminated services, a variety of cost savings strategies, and new revenues.
Despite these efforts, prior reductions did not address deferred liabilities, such as other
post-employment benefits(OPEB),which are now estimated at more than $61 million.
A significant portion of the costs of providing services to the community are the salaries
and benefits paid to City employees, with nearly two-thirds of the City's General Fund
tied directly to personnel costs. This is because municipal services are generally labor-
intensive, with City employees such as police officers and firefighters providing
essential services. In an effort to maintain service levels, the City has implemented cost
control measures, including the following:
• Organization-wide hiring freeze, with exemptions based on requests critically
necessary to perform essential functions of the department;
• Expenditure controls on technology, marketing, office furniture, equipment, and
vehicle purchases;
• Two-tiered pension plans;
• Salary freeze for unrepresented employees (including executives and professionals)
and most City bargaining groups; and
• 10% reduction in the total compensation (from the baseline 2009-2010 fiscal year)
for City employees within the General Unit, Middle Management Unit, Police
Management,Fire Management,and the Management/Confidential Unit.
Persistent General Fund budget shortfalls have necessitated deep service reductions in
departments that rely on the City's General Fund, including freezing vacant positions in
Police and Fire services, the inability to open and operate new City facilities,a reduction
in the days and hours of operation of the City's library services. With escalating total
operational costs and declining revenues,the budget shortfalls in the last two years have
been the most severe. Staffing levels for the City of San Bernardino have been reduced
by 14% since 2007-2008,with the majority of the impact experienced in 2008-09, 2009-
10 and 2010-11. In recent weeks, the City has lost 60 employees due to attrition. As
staffing continues to erode at a rapid pace, the City's capacity to provide the essential
services set forth in the Charter is diminished. Staffing reductions to date have impaired
the government's ability to provide services at the level and quality that are required for
the health, safety, and welfare of the community.
With the drop in staffing levels and the magnitude of the General Fund shortfalls, no
service area has been spared from deep cuts. In 2000-2001, when retirement costs were
at their low watermark, the City had 1,174.5 full time equivalent employees. With the
position reductions proposed in the 2012-2013 Budget, San Bernardino will likely drop
staffing to levels not seen in over 20 years.
2. Service Levels will be Impaired for the Foreseeable Future
While there is much evidence to conclude that the service impairment will rise to the
level of an emergency, a critical consideration is whether economic conditions and
rising operational costs will further weaken the City's ability to provide public services
into the foreseeable future. As demonstrated later in this report that answer is,
unfortunately, a resounding "yes." As described in detail below, operating cost
increases coupled with the retirement cost increases projected in the next few years will
make dramatic service-level reductions a necessity to balance the budget.
As noted by GASB, financial insolvency is directly tied to the ability of an entity "to
continue public services and/or existing programs." By that standard, the City is already
financially insolvent. Without significant operational and financial restructuring, the
likely budget balancing scenarios over the next three years include:
Police Department
• Reduction in proactive resources such as District Resource Officers,Narcotics, Gang
Officers,Etc.
• During peak demand times, police response may be limited to high priority, violent
crimes,or crimes in progress.
• The average response time for Priority 3 and 4 calls will increase,with some of these
kinds of calls going without any response during peak times
• The Police Department may reach a point where misdemeanor and property crimes
may go uninvestigated, if the Department lacks the resources to investigate all but
the most serious crimes;
• The City will be unable to respond effectively when multiple critical events occur
concurrently;
San Bernardino is currently experiencing an increase in overall crime. The increases are
likely to continue as police resources diminish. Community based policing efforts will
also continue to decline as resources are eliminated and the Department adjusts
resources to respond to calls for service. Community frustration at low service levels
from the police department will likely increase.
Fire Department
• Response times for fires and medical emergencies will increase, and will, on a
regular basis, likely exceed current standards, leading to increased risk of loss of life
and significant property damage.
• The operational efficiency of several of our specialty programs will be negatively
impacted. Materials Response unit,Urban Search and Rescue unit, SWAT Medic
program, and Fire Investigation unit,among other program areas, will have to be re-
evaluated to see if it is feasible to continue providing these services.
• The City will consider alternative service provision models as necessary to keep
most fire stations open and operational at accepted standards for a City of our size
and call volume.
• The Department will have reduced capacity to respond to two or more sustained
structure fires that occur within the same time period, as well as reduced response to
wildland fires and other large scale incidents such as natural disasters, terrorist
incidents, civil disturbance, etc. Moreover, as the largest firefighting force in the
County, the Department cannot rely on mutual or automatic aid from neighboring
jurisdictions to provide basic levels of fire and emergency medical services. These
agencies have had to reduce responding units as well; typically, other agencies rely
on SBFD for assistance.
• The Department will need to consider whether to continue to provide advanced life
support services, as it presently does. Other models of providing this service will
have to be studied to provide our citizens the level of emergency medical care
provided by the current model. We have established response time standards that
have been adopted by the City Council and are regulated by the County. Further
degradation in our ability to meet these established standards will necessitate a
change in our service delivery method. This could result in a decrease in the level of
service and care currently provided as well as a possible increase in cost to our
citizens.
• The Department's ability to provide comprehensive fire prevention services will
continue to erode; this will result in longer delays for developers and builders
wishing to start projects in the City. We will continue to experience a decrease in
revenue generated by commercial building inspections; this could result in more
fires with an associated increase in life and property loss.
Library Services
• Three out of four currently operational branches are likely to close for the remainder
of 2012-2013;
• Library programming, including educational programming,will be eliminated;
• School-aged children visiting branch libraries after school each day, many of whom
are not accompanied by a parent or caregiver, will no longer have a safe,
constructive, and educational after-school option;and
• Property values for the homes in close proximity to the closed branch libraries may
decrease.
Parks,Recreation and Community Services
• All City recreational programs will be discontinued and the City's Community
Centers will be closed unless partner agencies are able to pay operations and facility
overhead;
• Teen programs will be eliminated;
• Gang-intervention and graffiti abatement programs will be reduced to skeletal levels;
and
• Property values for the homes in close proximity to the shuttered Community
Centers may decrease.
Impacts on Other City Services
• Traffic maintenance programs will be further reduced, impacting traffic sign
maintenance,roadway striping, and marking maintenance;
• Continued deferred maintenance of public facilities; and
• General Government departments such as Council Appointees, Finance, Human
Resources, Information Technology, and Mayor and Common Council will be
further cut, resulting in reduced staffing for oversight, management, internal
controls, and compliance.
These public services are essential to the functioning of San Bernardino. In the absence
of these essential city services, business owners and residents will perceive a disconnect
between taxes paid and services provided. The City must avoid this potential downward
spiral by working to maintain services that provide social and economic benefits to the
community.
In conclusion, San Bernardino has experienced a sharp increase in service delivery costs,
driven primarily by fast-rising operational costs, in tandem with sustained declines and
ongoing weaknesses in City revenues. In turn, in the City's effort to maintain a budget
balance,these factors have required year after year of escalating service cuts. Given the
extent of these service reductions to date, and the anticipated impact of the next round of
cuts to be required if no corrective action is taken,these unsustainable trends have now
reached the point of fiscal emergency leading to Chapter 9 Bankruptcy.
H. DECLINIIVGREVENUESASA FACTOR CONTRIBUTIIVG TO THE
STRUCTURAL DEFICIT
A. The Recession has Taken a Toll on the San Bernardino Economy
San Bernardino, along with many other cities,has been heavily affected by the current economic
downturn. The financial impact from the economic downturn has been severe and continues to
linger. However, as discussed below, the City's current crisis has been compounded by
increases in operational costs,especially pension and retiree healthcare costs.
The City faces a structural budget gap: the growth in the cost of the City's recurring
expenditures — most significantly, for employee retirement benefits — outpaces the growth in
City revenues. This unsustainable imbalance preceded the decline in City revenues and will
continue to imperil City services for years to come if no corrective action is taken. While the
City has taken extraordinary steps to address and control these costs shrinking its workforce,
decreasing total compensation by 10% across the board, and increasing fees and other revenues
the City's ability to fund its remaining services continues to deteriorate and solutions are
becoming more and more elusive. The budget pressures faced by the San Bernardino municipal
government reflect the broader economic problems faced by San Bernardino's residents. By
almost any measure, the Great Recession continues to have a devastating effect on San
Bernardino's residents and their economic resources:
• The unemployment rate for the City of San Bernardino has doubled since the onset of the
recession. As of June 2012,the unemployment was 16.9%.
• Median single family home sale prices have fallen sharply, to over 40% below the 2007
peak annual levels as of June 2012.
• As of June 2012, San Bernardino foreclosure rates are 3.5 times above the national average.
In turn, as further detailed in the analysis to follow, these economic factors have weakened the
City's tax base and revenue streams, while adding to community service demands. As in
communities around the nation, the downturn has created severe pressures on the City of San
Bernardino budget.
While the recession that began nationally in December 2007 may have ended in June 2009, the
economy has yet to generate the strong levels of growth required for full recovery. Moreover,
even"normal growth"is insufficient to achieve true recovery. Real recovery requires a return to
trend— in other words, where the economy would have been normal growth continued without
the contraction of a recession.
Of further concern, recent projections show economic growth continuing to lag below
normal levels through calendar year 2012. In the July 2012,the Federal Office of Management
and Budget Mid-Session Review,the 2012 fourth quarter forecast was reduced to 2.3%based on
data through June. National forecasters also project prolonged weakness in the labor market,
including continued high unemployment rates. In the Second Quarter Survey of Professional
Forecasters, unemployment nationally is projected to stand at an annual average rate of 8.1% in
2012 and to remain high at 7.7% in 2013, 7.2% in 2014, and 6.6% in 2015. In contrast, the
national average in 2007, before the full onset of the recession, was just 4.6%. Statewide, recent
15
forecasts estimate double-digit unemployment rates of 10.7%; the third highest in the United
States.
B. San Bernardino Revenues Have Decreased, With Only Moderate Growth
Forecast Going Forward
The City of San Bernardino's primary revenue streams are highly sensitive to the overall
economy, and have been eroded by the economic downturn. The City's two largest revenue
sources, property taxes and sales taxes alone comprise nearly half of overall General Fund
revenues, and have both experienced recession-driven declines. At the same time, multiple
other significant City revenue streams, including business taxes and many of the City's licenses
and permits,have also fallen.
1. Overall Revenue Performance and Projections
Overall, the estimated 2012-2013 General Fund revenue estimates remain 10% lower
than peak 2007-2008 General Fund revenues of$133 million. Based on the City's five-
year General Fund Forecast, which excludes one-time revenues and grants, General
Fund revenues are not expected to return to previous peaks during the five-year forecast
period.
At no point during the forecast period are General Fund revenues projected to approach
what they would have been had growth continued at 3% per year since 2007-2008.
Estimated 2012-2013 General Fund revenues are $21 million lower than hypothetical
General Fund revenues of$145 million, assuming General Fund revenues had grown by
3%per year from peak levels in 2007-2008.
2. Property Taxes
The chart below reflects the City's property tax base according to land use. Typical of a
large, older community, the City is fairly balanced with 52% of taxable value as
residential, 19% commercial and 15% industrial. Despite the diversity in property tax
value, 80% of the City's taxable parcels are residential,which points out the relative low
assessed value of the City's housing stock when compared to commercial and industrial
uses. The high ratio of residential parcels is a measure of service demand and an
indication that a sustainable and resilient revenue base is vital to support essential City
services.
16
Table 8 -Land Use by Net Taxable Value
Category NetraxableValae NamberafPartels Land Use by Net Taxable Value
Residential $5,337,905,953 41,947
Mb211aneous
Commercial $1r988r7B1,W2 2,295 1X
Industrial $1,557,715,525 721
Miscellaneous 586,979,310 346 Government
Government $5,397,890 12 a%
Institutional $56,282,161 207
Dry Farm $1,382,185 7 mrt4utiona
Recreational $25,292,404 58 "Farm
Irrigated $43,094 1 O%
Reaenianal
Vacant $356,918,079 4,524 0mE o%
Exempt $0 3,347 Vaunt irreated
Outer Parcels $7,500 5 4% 0%
SBE NOnunitary $5,219,774 54 4JWkn n
Personal(Unsec) $52,093,032 3,967 0%
OurerParrels
Unknown $24,201,315 61 ox
$10,308,2]9,224 56,526
SBE Nanurke"
Sowm:WL20]].1SMroeaYTm Bfawa _...._ 0%
Property taxes account for more than twenty percent(22.6%) of projected General Fund
revenues in 2012-2013. In San Bernardino, as in communities across California and the
nation, the collapse of the U.S. housing bubble in 2007-2008 led to sharp declines in
home values and significant increases in foreclosures. In turn,as these economic factors
have worked their way through the property assessment and taxation process, property
tax revenues have experienced decline nationally and in San Bernardino.
In addition to housing market factors, San Bernardino's ability to raise property tax
revenue to keep pace with rising expenditures is severely constrained from a structural
viewpoint by Proposition 13 and subsequent related amendments to the California
constitution. Proposition 13 limited the ad valorem tax rates to 1% of assessed value
absent approval of two-thirds of the city's voters for a higher rate. The proposition also
limited any increase in the assessed value of real property to the California Consumer
Price Index up to a maximum of 2% per year, the result of which effectively locked in
the total property taxes paid by many California residents to their 1978-1979 levels,
adjusted by a maximum increase of 2% annually. Property that changes ownership or
has major alterations may be assessed at current fair market value, and thereafter is
limited to the 2% increase in assessed value per year.
As shown in the graph below, San Bernardino's property tax revenue collections peaked
at approximately $32.8 million in 2008-2009, and then fell sharply for the next two
fiscal years to $26.7 million in 2011-2012. As the 2012-2013 Proposed Budget
forecasts no significant recovery in this large City revenue source, the projected $26.8
million would still be approximately 18% below the levels reached three years earlier.
If the growth rates assumed in the 2012-2016 Five-Year Forecast issued in June 2012
are applied to the 2012-2013 Property Tax estimate,Property Tax revenues would not be
expected to return to pre-recession levels until well after 2014-2015 under the City's
best case scenario. Further, at no point during the forecast period do projected revenues
come close to the levels that would have been reached had property taxes continued to
grow at an annual rate of 3.0% since 2008-2009, shown in the chart below as the top
dotted line. Given continued housing market weakness and the legal constraints on
17
property tax increases in place under the California constitution, property tax revenues
will remain flat for years to come.
Table 9—Property Tax Revenue 2002-2003 to 2011-2012
Property Tax Revenue
- - - _ $32.788.532.00
.. $31p29,967.00 28811780.00
$28.239,909.00.
$23,093,720.00
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PZ`' pZ` pZ` P�. P� QL� Q8 P� JcaJa JcaJa ����R
As outlined above, overall economic recovery remains weak and uncertain, and the
housing market continues to be similarly challenged. Home prices as of August 2012
were still at summer 2003 levels on a national basis — down 31.2% from five years
previously(seasonally adjusted; based on a composite of 20 metropolitan areas).
Looking at data specific to San Bernardino, median home sale prices for single-family
residences within the City paralleled the regional area trends. As noted previously, San
Bernardino median home sales prices remain roughly 40% below peak 2007 annual
levels as of June 2012.
As property values drop, so does property tax revenue. Under Proposition 8, temporary
reductions in assessments are applied when the current market value of a property is less
than the current assessed value. As a result of the housing market downturn, the number
of revaluations has increased, contributing to reduced property tax revenue for many
municipalities, including San Bernardino. San Bernardino's non-residential sector is
even weaker, with anticipated softness in commercial property values throughout the
City's 2012-2016 five-year forecast.
13
3. Sales Taxes
Sales tax revenues are another important revenue stream for San Bernardino and account
for 22% of General Fund revenues in the 2012-2013 Proposed Operating Budget. Sales
and property taxes combined account for nearly half of San Bernardino's revenues. Like
property taxes, sales tax receipts have declined significantly due to the general economic
downturn. The City estimates sales tax revenues peaked in 2005-06 at$36.7 million. In
2009-10 the City's sales tax plummeted to $20.4 million. In recent years, the City has
realized growth in sales tax receipts however revenues remain well below peak levels.
Overall, estimated 2012-2013 sales tax revenues remain roughly 29% lower than peak
2005-2006 sales tax revenues of$36.7 million.
Table 10—Sales Tax Revenue 2002-2003 to 2011-2012
Sales Tax Revenue
..534,768,847.00 34 749:00
a. 00 .
4 1.00 $29,589.971.00 $27.050„
$26,
$23,612,474.00
$20,432,101.00
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Estimated 2012-2013 sales tax receipts are projected to reach $27 million. This figure
factors out a sizeable amount of one time prior year adjustments and applies a 3%
economic growth factor. If the growth rates assumed in the 2012-2017 five-year
forecast issued in June 2012 are applied to the 2012-2013 sales tax estimate, City sales
tax revenues would not be expected to return to 2007-2008 levels until 2013-2014.
Further, much as with property tax receipts, at no point during the forecast period are
sales tax revenues projected to come close to what they would have been had growth
continued at 3.0%per year since 2005-2006.
19
Overall, the Administration anticipates moderate growth in sales tax receipts—with 3%
underlying economic growth in 2012-2013 and growth ranging from 2%to 3%annually
in the out years of the forecast period.
4. Other Revenue Sources
In the aggregate, the City's other revenue sources are projected to generate steady, but
not high, rates of overall growth across the City's 2012-2017 five-year forecast period.
Major categories for these other sources are outlined below.
Utility Tax & Franchise Fees account for approximately 18.5% of estimated General
Fund revenues in the 2012-2013. The City collects franchise fees from companies using
public property in the distribution of natural gas, and electricity. The City also collects
franchise fees from its integrated waste department and cable television providers.
Utility taxes are charged to the users of any given utility (electricity, gas, water,
telephone). Utility and franchise fees are less sensitive to the economy than sales and
property taxes, and historically have been consistent sources of revenue for San
Bernardino in general. At the same time,these revenues are not considered high growth.
Similar to other major revenues, Utility User Tax (UUT) revenues have declined
significantly since the peak of 2006-2007. This is due primarily to the City's exposure
to foreclosures, which were 3.5 times above the national average. The chart below
summarizes the City's collection of UUT revenues over the past 10 years.
Table I I —Utility Tax Revenue 2002-2003 to 2011-2012
Utility User Tax Revenue
v i.:.. .. �. .t ': •. MNA. f. '
WJ
$22,477;545M 22,690,460.00 $22,500,000 W
204,082.00
0 1 O ti ti M
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1: 0 Q y' 0 1' 00,
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Transfers and Reimbursements account for funds received by the General Fund from
other City funds through a combination of means, including operating and capital
fund overhead charges, transfers, and reimbursements for services rendered. The
revenues in this category can vary significantly each year and are influenced by the
following: changes in staffing costs, staffing levels, and the relative proportion of
services delivered to other funds; the availability of funding in other funds that are
appropriate to transfer to the General Fund; and the performance of Gas Tax
revenues, which are transferred to the General Fund to reimburse the City for
eligible expenditures.
Business Registration,Licenses and Permit Revenues are generated from payments for
the issuance of Business Licenses, Building Permits, Fire Permits, and miscellaneous
health and safety-related licenses and permits. For most licenses and permits, the
fees charged by a given department are based on full recovery of the estimated costs
for providing each service. The demand for these licenses and permits, particularly
development-related building and fire permits, are sensitive to economic downturns.
Other Agencies includes revenues from local agencies, revenues from the State of
California, and revenues from the federal government. City receives revenues from
the State of California in a number of different forms and grants to deliver services.
The federal government also provides grant funding to support a variety of programs
and services.
Other Revenues include the following categories: Fines, Forfeitures, and Penalties;
Transient Occupancy Tax; Other Revenue; and Use of Money and Property. While some
of these revenue sources are highly dependent upon market performance, such as
Transient Occupancy Tax and interest earnings, the majority of these revenues are not
driven primarily by economic conditions.
C. General Fund Expenditures
While City revenues have paralleled the weakness in the overall economy, key spending
categories have grown much more rapidly outpacing revenues. Over the past 10 years, General
Fund revenues and expenses have closely followed one another with expenses significant
outpacing revenues since 2007 (see the chart below). City retirement contributions were by far
the primary drivers of the City's personnel cost growth across this period. Such benefit cost
growth in excess of revenues has severely eroded the City s fiscal resources for maintaining
staffing,service,and wage levels, and will continue to do so unless steps are taken.
Table 12—Revenues vs.Expenditures(10 Year)
Revenues vs Expend'kxes (10 Year)
155,060J.7('Ki
S�i,CA0,000 ��
125,000,000
115,000.000
105,O�O.OR-i
4�
95,000,000
amu zaae zam•• .®e xa•'v �mr sma �m ma ms 2�•••
+6stu Funds A»IaWe - -Octu (Dedurfio FY 2.011 is una mkod and FM 2012 is me -mw pgeeted
The critical takeaway here is that for the City, the cost per employee has been increasing at an
unsustainable rate as personnel costs have continued to increase. This is most apparent when
looking at the budget information as compared to decreasing positions throughout the City.
Over the past three years, the City has eliminated 250 positions. Meanwhile, as noted the
comparative pie chart below, General Fund departmental budgets have increased by 27% from
$94.5 million in 2001-2002 to $127.2 million in 2011-2012. Because the cost of each employee
has risen,the City and its departments have been forced to reduce staff and services in an effort
to budget in balance.
Fiscal Year 2011-2012 FY 2001-2002 General
General Fund Expenditures Fund Expenditures
■Police ■Police
61,161,400 42,004,232
48% 45%
■Other ■Other
40 Departments Departments is
35,083,600 31,446,995
28% 33%
Total Public ■Fire Total Public ■Fire
Safety 72% 30,927,600 Safety 67% 21,041,818
24% 22%
The City's budget is heavily focused on public services. In turn, governmental service delivery
is labor-intensive —relying on the City workforce to patrol the streets, respond to emergencies,
provide libraries and community programs, and deliver the other direct and supporting services
of San Bernardino. Nevertheless, the City must continue to seek services delivery efficiencies
in order to continue to provide desired services within available resources. As a result, and as
noted elsewhere in this report, employee wages and benefits account for two-thirds of the 2012-
2013 Budget for the General Fund.
Summary descriptions for the major categories of General Fund expenditures are as follows:
Public Safety: This category represents 69% of the 2012-2013 Budget and reflects the services
provided by the Police and Fire Departments. The major expenditures include emergency
response to calls for service,fire suppression,emergency medical services,and Police patrol and
investigations.
Non-Departmental: The Non-Departmental category represents 8.4% of the 2012-2013
Budget and includes city-wide expenses. The largest components of city-wide expenses
include workers' compensation payments, sick leave cash outs, fleet services, and information
technology.
Community Services: This category represents 14.6% of the 2012-2013 Budget. It covers
programs such as public works, parks, libraries, recreation centers, planning and building
development services, and code enforcement.
General Government: This category represents 6.7% of the 2012-2013 Budget and reflects the
cost for all management and administrative functions of the City and independent officials,
including Human Resources, Finance, City Manager, Mayor, Common Council, City Attorney,
City Clerk,and Civil Service Commission.
Debt Service: This category represents 1.3% of the 2012-2013 Budget and reflects General
Fund costs associated with the debt obligations to the City's General Fund. This does not
include the City's 2005 issue of pension obligation bonds (public safety), as that costs is
included with public safety.
III. PERSONNEL &RETIREMENT COSTS ASA FACTOR CONTRIBUTING TO THE
STRUCTURAL DEFICIT
It is projected that over the next five years, the City's cumulative retirement contributions will
exceed $108 million in all funds with projected annual contribu«ions totaling $19 million in
2012-2013, increasing to over $22 million by 2016-2017. This is not the worst case scenario.
Staff was recently informed the Ca1PERS rate of return for its investment portfolio was 1% for
2011-12 which is 6.5% below the assumed discount rate. This will very likely increase the
City's future contributions.
This is not simply a short term issue. These costs are growing at such a rate and are of such a
magnitude that they require an ever-increasing share of the City expenditures regardless of the
program or revenue source. Retirement reform is needed for the long-term sustainability of the
retirement plans and in order to continue to provide even the most basic municipal services to
the public.
For the purpose of understanding the root causes and likely outcomes of the City's deteriorating
financial condition, it is essential to understand certain aspects of the City's pension and Other
Post-Employment Benefits(OPEB). The key points in this section are the following:
• The City's pension and OPEB costs are increasing at a rapidly accelerating rate and will
result in broad impairment of the City's services;
• The rapid increase in the cost of retirement benefits is due, in part, to improved retirement
pension plans, but also to numerous factors beyond the City's control, including very large
investment losses, the likelihood that the plans will not attain current investment return
assumptions, actuarial losses, changes in actuarial assumptions based on experience, and the
increasing number of retirees relative to active employees;
• The expected changes in GASB pension accounting rules, while not directly addressing
changes in funding, will report additional liabilities by requiring public entities to more
accurately portray their pension liabilities;
• The impact of these factors will worsen over time and contribute to a dramatic increase in
the unfunded liabilities of the plans, with a resulting rapid increase in annual retirement
costs;
• The increased retirement costs that the City will experience are unsustainable; and therefore,
• Immediate,major intervention is necessary now.
A. Overview of Pension Benefits
The City provides a pension benefit for vested employees (those with 5 or more years of PERS
service credit) based on the member's years of service and his or her single highest year's
compensation at the time of retirement. Because the City Charter does not include language
regarding retirement plans, the employee labor groups were successfully able to negotiate
enhanced pension programs through labor negotiations when the City's coffers and retirement
funds were flush. Listed below is a brief summary of the City's enhanced retirement plans.
24 —
Table 13 —Enhanced Pension Formulas for the City's Retirement Plans
Police and Fire Non-Safety
Age and Years of Age 50 with 5 years of service Age 55 with 5 years of service
Service Eligibility
3%of highest year's compensation for each year 2.7%of highest year's
Benefit Formula compensation for each year of
of service P Y
service
Maximum 90%of final compensation 900/6 of final compensation
Benefit
COLA Guaranteed 2%per year Guaranteed 2%per year
Average base pay of employee's highest 12 Average base pay of highest 12
Final consecutive month period with the City; month period with the City;
Compensation does not include overtime or
excludes overtime and expense allowances specialty pay
Date of
Implementation Fiscal Year 2001-02 Fiscal Year 2007-08
To reduce the future cost of employee pension benefits, the Mayor and Common Council,
through labor negotiations, implemented the following second-tier of pension plans for safety
and non-safety employees.
Police and Fire Department Retirement Plan
3%of final At 55 with 5 years of service 2011
compensation for
each year of service
Miscellaneous City Employees Retirement Plan
Year of 'abi
2%of final At 60 with 5 years of service
compensation for each 2011
year of service
In addition to the plans above, retirees receive an annual 2%cost of living adjustment(COLA),
regardless of the CPI or the state of the retirement funds. This guaranteed COLA was added to
the plans many years ago, increasing to the total cost of the Police and Fire Plan and the
Miscellaneous Plan.
Pensions are paid out of retirement funds administered by the California Public Employees
Retirement System (Ca1PERS). The plan is designed to prefund pension benefits, meaning
annual contributions made over the course of an employee's career (by both the City and the
employee) along with investment earnings are expected to pay for all future pension benefits.
The "normal cost" of pension benefits refers to the contribution amount allocated to an
employee's current year of service. Separate and apart from the normal cost, additional
payments may be necessary due to market losses, retroactive benefit enhancements, unmet
assumptions or other circumstances that may result in plan underfunding.
B. Overview of Other"Post-Employment Benefits
The City's retirement plans also provide for other post-employment benefits (OPEB);
specifically retiree medical and dental coverage. Generally, employees are eligible for retiree
medical insurance coverage after retirement from public service. Employees are eligible to
retire at pre-Medicare age (55 for Miscellaneous and 50 for Police and Fire),which contributes
to the significant cost of the benefit. For 339 eligible retirees the benefit covers$112 a majority
of retirees and $200 to $450 based on years of service for retired police officers to cover
monthly premium costs for healthcare insurance. A few eligible police retirees receive a similar
benefit as active general employees. This is an anomaly, since retiree healthcare benefits are
commonly less than what is provided to active employees.
The OPEB plans are funded through separate trust funds associated with the retirement plan.
The plan has an independent actuarial analysis, which establishes the contribution rates and
funding levels. Unlike pension costs, retiree medical costs are limited to fixed dollar amounts.
Currently, the City's OPEB benefits and unfunded obligations are funded on a pay-as-you-go
basis. Annually, the City pays roughly $628,000 towards OPEB obligations. Currently, the
unfunded liability for OPEB benefits is $61 million. Similar to pensions,the City's annual pay-
go OPEB costs are also steadily increasing. The Chart below provides estimated growth in pay-
go costs over the next ten years.
Table 14—Other Post-Employment Benefits Annual Pay—Go Estimates
Fiscal Year Pay-Go Total $Change From % Change From
2010-2011 2010-2011
2010-11 $628,000
2011-12 $738,000 $110,000 18%
2012-13 $855,000 $227,000 36%
2013-14 $975,000 $347000 55%
2014-15 $1,099,000 $471,000 75%
2015-16 $1,220,000 $592,000 94%
2016-17 $1,344,000
1216,000 114%
2017-18 $1470,000 $842,000 134%
2018-19 $1,603,000 1 $975,000 155%
C. The City's Retirement Contributions are Steadily Increasing
By any standard, the City's pension and OPEB costs have been increasing and are expected to
continue current trends. Because of this, over the past 10 years the City has experienced a
profound increase in the percent of payroll that it pays to the retirement plans for these benefits.
In 2011-2012,the City spent just over$20 million on retirement benefits. Absent swift action to
reduce the cost of these benefits,the City is expected to be required to contribute more than $24
million for pension and OPEB costs in 2016-2017—only four years from now.
While these estimates cover all fund sources, the impact on the City's General Fund is
significant since it carried the entire burden of public safety costs. Unfortunately, this is not
even the worst-case scenario. Future investment losses would increase the unfunded liability, as
would actuarial experience losses, and/or decreases in investment earning assumptions.
The two charts below depict the growth in annual pension costs and unfunded liability. The
City has experienced a significant impact with the implementation of the 2.7% @ 55 benefit
enhancement in 2007-08 and with the issuance of pension obligation bonds in 2006-07 for
public safety. Both of these events contributed significantly to increasing rates along with
market losses and adjustments to actuarial assumptions.
Table 15—CalPERS Actuarial Valuation Rate—Miscellaneous Plan
Fiscal Year Employer Employee Benefit Unfunded
Liability
2012-13 17.355% 8.00% 2.7% 55 $55,855,277
2011-12 17.248% 8.00% 2.7% 55 $53,627,697
2010-11 13.276% 8.00% 2.7% 55 $27,164,865
2009-10 12.544% 8.00% 2.7% 55 $19,572,835
2008-09 13.427% 8.00% 2.7%@ 55 $24,580,218
2007-08 15.266% 7.00% 2%@ 55 $23,751,661
2006-07 8.947% 7.00% 2% 55 $(312,406)
2005-06 7.555% 7.00% 2%@ 55 $(6,769,844)
2004-05 0.000% 7.00% 2% 55 $(36,697,738)
2003-04 0.000% 7.00% 2% 55 $(69,615,583)
2002-03 0.000% 7.00% 2% 55 $ 77,006,869
'7
Table 16—CaIPERS Actuarial Valuation Rate—Safety Plan
Fiscal Year Employer Employee Benefit Unfunded
Liability
2012-13 30.115% 9.00% 3% 50 $87,479,247
2011-12 28.277% 9.00% 3%@ 50 $81,636,613
2010-11 23.105% 9.00% 3%@50 $55,738,948
2009-10 23.356% 9.00% 3% 50 $51,811,181
2008-09 24.009% 9.00% 3%(a)50 $50,058,297
2007-08 18.600% 9.00% 3% 50 $83,165,714
2006-07 26.882% 9.00% 3% 50 $80,042,391
2005-06* 26.678% 9.00% 3%@ 50 $72,805,694
2004-05 27.386% 9.00% 3%@ 50 $59,128,137
2003-04 20.902% 9.00% 3%P.50 $17,457,260
2002-03 12.619% 9.00% 30%@ 50 $(6,95 487
*City issued$50.4 million in pension obligation bonds(not included in the unfunded liability)
As set forth below, in 2000-2001 City pension contribution rates are 7% of pay for
Miscellaneous and 14% for Police and Fire. For 2012-2013, however, the City's contribution
rates are expected to increase to 25% of pay for Miscellaneous and to 39% of pay for Police and
Fire.
Table 17—City Contribution Retirement Rates(as a Percent of Payroll)
2000-2001 2012-2013
Miscellaneous 7% 25%
Safety 14% 39%
D. The Primary Cause of the Dramatic Increase in Retirement Costs is a
Significant Increase in Unfunded Liabilities
It is important to recognize that the problems leading to this huge increase in retirement costs
cannot be addressed by continuing with business as usual. Absent major changes in the pension
and OPEB programs, retirement costs will overtake available resources, rendering the City
unable to provide even the most basic services to the public.
In general, the increasing costs of pension benefits are attributable to a dramatic increase in the
plans' unfunded liabilities. Because unfunded liabilities must be "amortized" over the
remaining life of a retirement plan, the amount that must be contributed to pay off that liability
must also increase.
1. The City's Unfunded Liabilities
a. Unfunded Pension Liabilities
The most current estimate of the City's total pension liability is $959.2 million. In
other words, there should be $959.2 million "in the bank" to assure sufficient
funding for pension promises already made. However, the two plans had a
,y
combined $639.7 million in assets (market value) or $319.5 million less than what
was needed. Thus, using the market value of assets, the City's unfunded
liability for both pension plans totaled approximately $319.5 million as of June
j 30,2010.
b. Unfunded OPEB Liabilities
Unlike pension benefits, which have traditionally been funded during the working
life of an employee, little money was set aside to pay for retiree health benefits —
even though, like pension benefits, an actuarial liability arose. In fact, as GASB's
adoption of Statements 43 and 45 in 2004 demonstrated,when actuarial studies were
required, many cities and counties found they had a very large liability. In San
Bernardino's case, this has resulted in an estimated $61 million in unfunded
liabilities as a result of promised OPEB benefits.
c. Funded Ratios have Significantly Declined
Adequate funding of a retirement plan is often viewed as a percentage of full
funding. As noted earlier, a plan that is fully (100%) funded has all of the assets
necessary to pay for the present value of all benefits already earned. The funded
ratios of retirement plans have fallen dramatically and are one of many significant
issues facing many municipalities throughout the State.
2. Underlying Causes of the Increase in Unfunded Liability
There are four major causes of this increase in unfunded liability:
1. Timing of increases in benefits beyond the basic plans, which were not paid for
during the working lives of employees receiving benefits;
2. Investment losses,leading to a failure to meet earnings expectations on plan assets;
3. Actuarial changes in actuarial assumptions based on experience, including increased
longevity;and
4. An increase in the number of retirees and the size of their pensions.
These factors have combined to take the pension plans from being at or above full
funding levels during the last decade to being underfunded now.
E. The Impact of Enhanced Benefits
Over the years, the City Council has increased pension benefits from the basic levels. These
changes which included increases in pension formulas (age at retirement, years of service,
multiplier, and calculation of final compensation) occurred as a result of bargaining with
employee labor groups. The impact of these changes cannot be overstated.
Importantly, in the case of virtually every pension improvement, the enhanced benefits have
been applied to an employee's full service with the City, including service which occurred
before the change. These retroactive adjustments have a direct impact on the City's unfunded
liability. As an example, consider an employee whose pension formula is enhanced after 29
29
years of service. For this employee,the City and the employee had contributed to the plan at the
lower rate for 29 years. Then, the employee's formula is converted to the higher rate
retroactively, regardless of years served under the lower benefit plan. Therefore, neither the
City nor the employee contributed to the plan for 29 years at the level necessary to fund the
higher level of benefit that this employee will now receive for all 30 years of service when the
employee retires a year later. This difference gets added directly to the unfunded liability.
1. Pension Formulas
With respect to pension formulas,the most dramatic changes have occurred in the Police
and Fire Plan. Currently, they may earn up to 90% of their final salary. In addition, the
minimum retirement age has been lowered from 55 to 50 and changed the
determination of final compensation from highest three-year average compensation
to highest 12-month average compensation for both plans.
2. COLA
The cost of living allowance(COLA) guarantees annual cost-of-living increases, even in
the fast year of members' retirement. The current system provides that all pensions
receive an automatic 2% increase, regardless of actual changes in the cost of living.
Because the COLA is effective on a date certain for each plan, a Police and Fire member
can retire on January 31st at 90% of salary and on February 1st—the COLA adjustment
effective date—receive a 2% increase, resulting in a pension of 92%of final salary.
3. Other Post-Employment Benefits
At the time Other Post-Employment Benefits (OPEB) were granted, their cost was
minimal, and it is safe to assume that no one involved fully anticipated the long-term
consequences. Over time, of course, the amount paid and the number of retirees has
increased, and the problem is compounded by lower retirement ages, meaning more
years before a retiree is covered by Medicare. As a result, as noted previously, the
City has an estimated $61 million in unfunded liabilities resulting from promised
OPEB benefits.
F. Failure to Meet Earnings Expectations
The cost of increasing pension benefits was masked, to some degree, during the decade
preceding 2008 because of rising equity markets leading to miscellaneous plan becoming fully
funded and the safety plan in a well funded status. However, with the recession beginning in
2008,the plans became underfunded rapidly and are not expected to recover any time soon.
One of the variables responsible for the increase in unfunded liabilities is the failure of the plans
to achieve the annual earning assumptions on which they have been premised. Until 2002,
Ca1PERS assumed earnings of 8.25% when it began phasing in a reduction of the earnings
assumption to 7.75%. From 2000-2002 to 2008-2009, much of the new unfunded pension
liabilities were caused by investment losses and adjustments. As this report goes to publication,
the CalPERS Board has adjusted its assumed earnings rate to 7.50%.
Even strong returns are unlikely to be able to make up for recent market losses. During 2009-
2010, each plan saw strong net investment returns 12% for both Miscellaneous and Police and
Fire. Positive returns were realized in 2010-2011. However, it would take extraordinary returns
over a sustained period to make up for the very severe losses in calendar year 2008 — and few
are predicting such returns. Indeed, even the very positive returns for 2010-2011 have
undoubtedly been eroded by declines in the equities markets since June 2011.
Nationally, the trend for earnings assumptions has been downward, reflective: (a) the lower
yields on bonds comprising 30-40% of pension portfolios, and (b) reduced expectations for
equity (stock) investments given the global overhang of sovereign and consumer debt. If the
CaIPERS Board reacts to this by reducing the actuarially assumed investment rates of return
below its current level of 7.5%,the Unfunded Actuarial Accrued Liability (UAAL)for the plans
would increase because the difference would need to be made up in contributions. On the other
hand, if the CalPERS Board were to leave the earnings assumptions unchanged, and the actual
rate of return on invested assets falls below the plans' assumptions, then the UAAL would
increase due to the disparity between actual investment results and the actuarially assumed
investment rates of return.
Either way, the amortization of those differences would increase the City's annual required
contribution beyond current projections.
G. Increase in the Number of Retirees
Another factor in the increase in pension costs — and one that will likely worsen significantly
over time — is the rising number of retirees relative to active employees. The increasing ratio
creates a risk of even higher future contribution rates. This means that the annual cost to pay
down the unfunded liability is spread across fewer active employees
In San Bernardino, as the number of active employees as a percentage of overall pension plan
membership has decreased, the payments to retirees out of the plans have exceeded
payments by active employees into the plans. The negative effect of this maturation of the
plans during a down market cannot be overstated. As a result of the confluence of events, the
impact of negative investment performance is exaggerated because the system has a negative
cash flow. With not enough new money flowing in, the system is forced to sell assets at
historically low values, when it should be "buying low" in anticipation of the eventual market
recovery. Now the cost of recovering from a recessionary market decline escalates.
H. Conclusion
Without compensation reforms, pension and OPEB contributions are expected to amount to
roughly 14% of total General Fund Expenditures by 2015-2016 totaling about $24 million
(excluding pension obligation bond debt).
In absolute dollars, San Bernardino's General Fund employee pension costs have risen from
$6.2 million in 2000-2001 to $19 million by 2012-2013,and are projected to reach$22.6 million
by 2015-2016 if no reforms are adopted—in total,a$3.6 million increase in annual spending.
-- 31
Unsustainable compensation costs are not San Bernardino's problem alone. Retirement costs
have significantly increased across the country. Concern about how to pay for retirement
benefits is a national issue. What is important to grasp from these increases is that the City has
worked very hard to absorb these increases to date.There have been severe consequences to this
as we find ourselves facing Chapter 9 Bankruptcy.
32 --
IV. EFFORTS TO ADDRESS TFIEFISCAL CRISISAND CONSIDERATION OF
ALTERNATIVES TO CHAPTER 9 BANKRUPTCY
The City has made reasonable efforts over the last several years to address its fiscal situation,
and continues to do so. Most recently, the Mayor and Common Council adopted a Fiscal
Emergency Operating Plan to address the City's budget shortfalls. Moreover, as discussed
below, the City has considered — and continues to consider - other proposed solutions for
addressing the rising personnel costs. However, it must be noted that the service-level impacts
are in fact another alternative, albeit one with potentially unacceptable consequences since the
City will be rendered unable to provide basic municipal services. That dire situation will be the
unacceptable outcome if the City does not swiftly address the fiscal emergency and reduce its
operational costs.
The City has also considered and is pursuing other ways to control costs and avoid unacceptable
service cuts. Some of these are discussed below. Ultimately, even if the City is successful in
achieving all of the ways to control costs outside of changes to retirement benefits, they are
insufficient to solve the crisis.
A. Past Budget Workshops and the City's Budgetary Analysis and
Recommendation for Budget Sustainability
Over the past decade, the City has balanced General Fund budget shortfalls through a
combination of strategies, including cost reduction strategies and revenue strategies. Given the
severity of the City's current financial condition and immediate cash flow issues, it is no longer
feasible to rely on these strategies alone to balance the budget without reducing services and
seeking Chapter 9 Bankruptcy protection.
On April 3, 2012, and July 09, 2011, the City Manager presented opportunities and options to
deal with the City's rapidly declining fiscal health to the Mayor and Common Council. It
should be noted that the Common Council has subsequently provided additional direction on
materials presented. The recommendations contained in the presentations were designed to
balance cost reduction strategies and revenue enhancements. Following is a discussion of those
strategies, some of which have already been implemented.
1. Cost Reduction Strategies
The budget workshop and Budgetary Analysis and Recommendation for Budget
Sustainability Plan identified several strategies to reduce costs, including departmental
cuts, reduced compensation for existing employees; reduced costs for sick leave
payouts, vacation buybacks and overtime pay; and cost sharing of retirement obligations
necessary to avoid further increases in retirement costs. Through bargaining, the City
achieved a 10% total compensation reduction from most employees and established a
two-tier pension plan for new employees. Although this reduction saved approximately
a net $10 million per year, it is not enough to resolve the continuing increases in
retirement and operational costs.
As part of the Budgetary Analysis and Recommendation for Budget Sustainability Plan,
the City is pursuing the elimination of sick leave payouts, reduction in overtime and
elimination of sellback programs. The City is meeting and conferring with the rest of
the bargaining units and will continue to do so through the bankruptcy process. It is the
Administration's goal to phase out sellbacks and to pursue changes to overtime
identified in the Budgetary Analysis and Recommendation for Budget Sustainability
Plan during this round of negotiations.
Although the savings above identified in the Budgetary Analysis and Recommendation
for Budgetary Sustainability Plan are significant, the most significant are cost sharing of
retirement benefits,which will require successful collective bargaining.
2. Revenue Strategies
The Budgetary Analysis and Recommendation for Budgetary Sustainability Plan
identified the following revenue measures: (1) Real Property Transfer Tax; (2) Utility
User Tax Modernization; (3) Transient Occupancy Tax; and, (4) 911 Communications
Fee. Each of these revenues measures,however,would require voter approval.
It is important to note that the City's ability to raise revenue through taxes and fees is
severely constrained by the California Constitution, as modified by several statewide
ballot measures, ranging from Proposition 13 in 1978, to Proposition 218 in 1996, to
2010's Proposition 26.
Proposition 13 limited the revenue that cities may receive from property taxes by
capping both the assessed value of property and the tax rate allowed. Proposition 13
also imposed a requirement that "special taxes" be approved by a two-thirds
supermajority of voters. In 1984, Proposition 62 extended a voter approval requirement
to "general taxes" imposed by cities. In 1996, Proposition 218 imposed further
restrictions on cities' ability to impose property-related fees, reaffirmed voter approval
requirements for all taxes, and granted voters the right to repeal or reduce taxes or fees
through the initiative process. Although Proposition 218 continues to be interpreted
through the courts, it is clear that it has created an additional significant barrier for local
governments in attempting to control financial outcomes.
Proposition 26, the most recent restriction on the City's ability to raise revenue,
extended voter approval requirements to "regulatory fees" by reclassifying such fees as
taxes. An example of a regulatory fee is a fee imposed on manufacturers of products
containing lead to fund health services and mitigation of the environmental impacts of
lead. By requiring voter approval for such fees, Proposition 26 significantly restricted
one of the few remaining options for cities to raise revenue.
A challenge facing Mayor and Common Council whenever evaluating whether or not to
place revenue measures before the voters is how to weigh the marginal support typically
seen in pre-vote surveys. In judging whether to place a measure before the voters, the
Mayor and Common Council must weigh the likelihood that marginal voters who are
3a
"leaning" in support of a measure will vote in favor of the measure, against the
knowledge that the City generally will only get one"bite at the apple" when it comes to
any particular revenue measure, and that the cost for that one "bite" is extremely high,
whether it wins or loses. According to most well regarded advisory firms, once voters
reject a measure, it is often significantly more difficult to pass in a subsequent election.
In other words, the likely chance of passage is reduced once a ballot measure has been
rejected. These combined concems have prompted the Administration to take a cautious
approach when considering recommending revenue measures to the Mayor and
Common Council.
Following is a discussion of each of the four potential tax measures included in the
Budgetary Analysis and Recommendation for Budget Sustainability Plan.
Real Property Transfer Tax
In Califomia, localities including San Bemardino have imposed a tax on the transfer of
property located within the city. The tax, known as the documentary transfer tax or real
property transfer tax, is largely based on the federal documentary stamp tax, which was
repealed in 1976. In California,counties and cities have been authorized to impose a tax
on deeds of transfer of realty located within such county or city.The amount of the tax is
based on the consideration or value of the realty transferred. The current County rate is
one dollar and ten cents ($1.10)for each one thousand dollars ($1000) of value. Of that
amount, the City receives $0.55 and the County receives the remaining $0.55. Charter
cities, however, may impose transfer taxes at a rate higher than the county rate. The
transfer tax must be paid by the person who makes signs or issues any document subject
to the tax or for whose use or benefit the document is made, signed or issued. Real
Estate Transfer Taxes, authorized as documentary transfer taxes by the California
Revenue and Taxation Code on the sale or transfer of real property are currently levied
by all counties and many cities.
Real Property Transfer Taxes may be applied only to residential sales or to other types of
real estate transactions including commercial and industrial sales. Revenue raised from
the Real Property Transfer Tax is added to the City's General Fund.
It is recommended the City Council consider implementing a rate of$5 per $1000 of
value to provide a base level of funding necessary to deliver essential services to the
community. The proposed rate would generate roughly$3 million annually.
Utility User Tax
Many cities charge a tax on utilities, ranging up to 9.5% (Huntington Park). San
Bernardino currently charges 7.75%. Each 1% increase on utilities currently taxed
(telephone, cable, electric, and gas) would yield approximately $3 million annually.
Each 1% on utilities not currently taxed (sanitary sewer service, sanitation, refuse
collection)would yield several hundred thousand dollars annually.
3s
Utility user taxes (UUT) are paid by San Bernardino residents and businesses and are
collected by the utility providers who serve them. The utility then remits the tax
payments to the City. Annual revenue in FY 2010-11 from utility user taxes (electric,
gas, cable, land line phone, and cell phone) was $22 million. The City has made annual
revenue projections considering possible tax increases at 1% and 2%. Further, sanitary
sewer service, sanitation, and refuse collection are currently not part of the utility user
tax. The City may want to consider modernizing and expanding the utility user tax to
cover utilities not currently included.
A utility user tax increase can only be voted on during a general election. A simple
majority is needed unless the City Council declares a fiscal emergency and puts the
potential tax increase to a vote during a special election. It should be noted that costs for
special elections are higher. For San Bernardino, a special election costs approximately
$200,000.
Transient Occupancy Tax
The Transient Occupancy Tax (TOT) is a tax charged on hotel stays. San Bernardino
presently has a TOT rate of 10%,which is the County average. In the San Bernardino/
Riverside County area, some cities charge as much as 12.7% (Palm Springs). For our
City, TOT generates just under $2,500,000 per year in revenues, meaning that each 1%
of the tax generates about$250,000.
Increasing the rate by 1% would put the rate at the highest level in the County and
would generate only $250,000 in revenues. There might also be some negative impact
of the higher tax rate on occupancy rates at the local hotels and spas. For these reasons,
we are not recommending an increase of the existing TOT.
911 Communications Fee
While often called a"fee," this potential revenue source is actually a tax requiring voter
approval. A 911 communications fee would yield approximately $6.7 million a year.
The tax would be charged on most personal and business telephone lines and cell phones
in the City. Some exemptions typically exist, mainly relating to customers on lifeline
service and service to non-profit organizations and government offices.
The City of San Jose has implemented this fee and estimates that approximately 90% of
the phone accounts in their community are taxed. The justification for charging a fee to
telephone subscribers is that only people who have telephones can call 911 for
emergency services. As stated in the San Jose ordinance, "Subscribers to telephone
service derive significant benefits from ongoing operation of the modernized integrated
system installed at the San Josd Emergency Communications Center" in the form of
more efficient dispatch of services to a 911 emergency request.
36
B. Best Cases Revenue Scenario Does Not Solve the Problem
Certain measures included in the City's Budgetary Analysis and Recommendation for
Budgetary Sustainability Plan have been considered by the Mayor and Common Council in
recent years. While approval of all the measures would provide substantial new revenues to the
City, placing multiple revenue measures on the same ballot is likely to reduce support for all of
them. However, it is important to note that, in the context of declaring a fiscal emergency, all of
these potential revenues together would only garner about $12 million annually, which would
only cover approximately 27%of the FY 2012-13 projected shortfall.
1. Other Revenue Alternatives Rejected
While not included in the Budgetary Analysis and Recommendation for Budgetary
Sustainability Plan, the Administration has also reviewed political and voter support for
a number of other potential revenue measures, none of which has demonstrated
sufficient support to merit serious consideration.Among these are:
• General purpose taxes requiring a simple majority to pass:
• Increase in the Sales Tax
• Parcel taxes requiring a super-majority(two-thirds)to pass:
• Parcel tax supporting"landscape and energy-efficient lighting":
• Parcel tax to support"police, fire,and other critical services":
• Parcel tax to help maintain City library services:
• Parcel tax to "protect and maintain City infrastructure services like libraries,
street and park maintenance, traffic signals and roadway markings
maintenance":
• Parcel tax to "protect and maintain public safety services like police patrols, 9-
1-1 emergency response,and fire protection":
2. Spending Down Reserves
In a time of fiscal crisis, the use of reserves is one of the options to consider as a short-
term approach to bridge funding gaps in order to continue providing essential municipal
services. The City has drawn down its reserve levels over the last several years, and this
practice has proven unsustainable. Effectively, San Bernardino's actions have been
equivalent to those of a homeowner drawing down from their savings account to pay for
monthly mortgage and grocery bills that exceed their regular paycheck. So long as the
savings last, such a practice can buy time to either find a better paying job, and/or to cut
down on monthly expenses. Because insufficient changes were not made with such
recurring income and spending,the City's reserves have been depleted.
The Administration strongly believes the City needs to implement strategies to restore
reserves to address any unforeseen circumstances as it serves as the City's safety net.
Without these funds, the City would not be equipped to address significant unforeseen
expenditure needs or to offset large drops in revenues in the future. It is imperative that
the City be in a position to meet its financial obligations each year and must prudently
plan to do so.
There are strong budgetary and strategic reasons for the City to maintain adequate
reserve levels and to avoid using one-time funds to balance the budget. More
importantly,because this deficit is structural in nature and because reserves by definition
are one-time monies,the City would simply be shifting the budget problem out one year.
Then, the City would be worse off the following year as it would have to not only
resolve the added gap, but it would also have no reserves or one-time monies to balance
the budget or to address unforeseen circumstances.
C. CONCLUSION
The City of San Bernardino faces a fiscal crisis of staggering proportions. The City has
attempted to close budget shortfalls every year for the past decade, largely through reductions in
staffing and one-time revenues. Citywide staffing levels have dropped by almost 20% in recent
years,reserves have been fully depleted and General Fund cash is negative$18 million.
Despite these reductions,the City's cost of providing services has continued to rise. Personnel
costs are the major factor driving the increased cost of providing services. Expressed as a
percent of payroll, retirement contribution rates have increased from 7% of pay for the
Miscellaneous Retirement Plan and 14% for the Police and Fire Retirement Plan to a projected
25% of pay for Miscellaneous and more than 39% of pay for Police and Fire. In other words,
for every $100 paid for police and fire payroll,the City will be required to pay an additional $25
to$39 into the retirement system.
As a result of these increasing costs, the City projects budget shortfalls for the foreseeable
future. Those shortfalls are anticipated to grow on a cumulative basis, if no corrective action is
taken, from $40 million in FY 2012-13 to over $45 million by FY 2015-16. Absent a dramatic
change to the accelerating cost of employment,the City will have to close these budget gaps by
cutting and potentially eliminating already reduced services below acceptable levels.
For all of the foregoing reasons, the Administration recommended the Mayor and Common
Council adopt a resolution of fiscal emergency and seek Chapter 9 Bankruptcy protection based
upon the need to find and implement solutions that may require the assistance from the
Bankruptcy Court.
38 __.
Y. BUDGET& OPERATIONAL RESTRUCTINGPLAN
A. Preliminary Fiscal Year 2012-13 General Fund Budget
The Preliminary FY 2012-13 General Fund budget of $166.2 million represented a baseline
budget, which is a continuation of the status quo with projected increases in pension costs and
other post-employment benefits, one time equipment purchases, as well as other services and
supplies that must be purchased by the City to maintain the current level of service. The
estimates in the Proposed Budget assume the restoration of the employee concessions, many of
which have expired, and do not include Cost of Living Adjustments (COLA) or other
compensation increases such as step increases.
Appendix A is the Proposed FY2012-13 General Fund Budget, which reflects $121.9 million in
revenues,not including transfers, and $143.9 million in department proposed expenditures. The
budget includes the Summary of Revenues, Expenditures, and Changes in Fund Balance,
Requested Budget by Department including Line Item Detail, Salary and Benefit Schedules by
Department, and Department Organization Charts.
Key expenditure assumptions for FY 2012-13 include:
• Significant restructuring is proposed in each department (detailed below). Overall, the
Administration is seeking a 30% reduction in expenses to balance General Fund expenses
with estimated resources in this fiscal year.
• CaIPERS costs are driven by the State's actuarial report that includes a 0.5% lower Ca1PERS
discount rate for investment earnings which contributes to a 14.4% increase in costs for FY
2012-13 and a 4.6% increase from FY 2012-13 to FY 2013-14. Lower City payroll will
drive up part of the CalPERS liability rate that pays off the unfunded liability. The major
risk is additional reductions in the discount rate and/or CaIPERS investment performance,
which would drive employer rates up finther. Future labor negotiations or court rulings
could result in changes to the City's costs related to retirement benefits.
• Increases in salaries in FY 2012-13 is the result of absorbing the costs related to safety
personnel that had been paid by grants in the past. Changes in safety grant funding have
occurred since the preparation of budget documents. The impact of these changes will be
addressed later in this report.
• Employee health care costs are estimated to grow by 5%. There is the risk that future labor
negotiations or court rulings could result in higher City costs.
• Other Post Employment Benefit costs continue to increase. The June 30, 2009, actuarial
report assumes annual growth averaging 8 to 9% over the next 5 years.
• Net debt and equipment lease costs are projected at$5,185,548.
Key revenue assumptions for FY 2012-13 include:
• Pursuant to the revenues budget, property tax will increase in FY 2012-13 by 4%. The FY
2012-13 estimates was provided by HdL, the City's property tax auditor. Looking forward,
Proposition 13 will hold down property tax growth as the annual assessed value adjustments
of properties, which are already selling at deflated levels, are limited to the lesser of the
change in the California Consumer Price Index (CPI) or two percent, unless sold. Sale
prices will depend on the rate at which the market recovers and whether trends shift to
renting closer to work, rather than owning property farther away from work. The long-term
trend is a straight line,although it is anticipated there will be short term fluctuations.
• Sales tax is based on HdL estimates through FY 2015-16, and assumes 3% annual growth
per year. Long-term CPI growth is projected at 2.5%. The shift toward non-taxable services
and non-taxed intemet sales will hold down growth over time.
• There is no growth projected for the Utility User Tax as increased utility costs,which would
generate more revenue are negated by increased user conservation, vacant properties as a
result of foreclosures and cost savings measures.
• Business Registration Fees are projected to grow 4% in FY 2012-13 due primarily to
increases in sales and business to business activity.
• The Franchise Tax is subject to similar user conservation and technology trends, and
therefore,is anticipated to be flat when compared to previous year revenues.
• New revenues which may be considered and approved by the Mayor and Common Council
in the future aren't included because no new revenue sources have been approved, and even
if approved, new revenues would not be realized until some future date, or would not be
immediately available.
B. Fiscal Year 2012-13 General Fund Reduction Methodology
Given the limited resources to the City, the recommendations that follow include profound
budget cuts that in many cases will have significant impacts on service delivery and City's
employees. Given the significant cash flow problems facing the City and immediacy of the
problem, the Administration was unable to engage the community in the process of prioritizing
programs and services prior to making recommendations for service cuts. Despite the inability
to engage the community, the Administration has worked to minimize the impact and preserve
basic services to the community.
The following core concepts have guided the development of the Proposed FY 2012-13 Budget:
• Priority was placed on front-line public safety services;
• Basic levels of infrastructure and public property maintenance were preserved;
• As many basic programs and services as possible were retained;
• Minimum levels of leadership and administrative support were maintained to the extent
practical; and
• Opportunities to build operating reserves, begin to fund unfunded liabilities, and to address
the cash deficit will require additional cuts, and therefore, the Administration will seek
further policy direction from the Mayor and Common Council in the near future.
The Proposed FY 2012-13 Budget is a balanced approach which reduces overall General Fund
expenditures from the preliminary budget of$166 million to $143.9 million. Recognizing that,
the Proposed Budget focused on the elimination of specific non-essential programs and services
and related personnel costs.
Key elements of the Proposed FY 2012-13 Budget include:
• Elimination of mid-management positions in the City Manager's Office and reassignment of
the Grants Coordinator position to the Parks, Recreation and Community Services
Department.
• Existing personnel in the City Manager's Office would assume responsibility for the
Economic Development programs as a result of the State dissolution of Redevelopment
Agencies.
• Consolidation of the Finance, Information Technology, and Human Resources Departments
into an Administrative Services Department resulting in the elimination of two Department
Director positions.
• Administrative positions in the Mayor's Office, which were responsible for neighborhood
services and environmental programs and projects would be eliminated and the duties
absorbed by the remaining personnel in the City Manager's Office. The two Operation
Phoenix sites would be eliminated.
• The Code Enforcement function, which is currently in the Community Development
Department, would be moved to the Police Department to provide greater efficiency and
coordination of the various enforcement functions.
• Disaster Preparedness, which is currently in the Fire Department, would be moved to the
Police Department to provide greater organizational awareness and preparedness.
• The Community Development Department would assume responsibility for the Housing
functions previously handled by the Economic Development Agency that was recently
dissolved by the State.
• Responsibility for the maintenance of the City's Landscape Maintenance Districts, park
maintenance, and street tree maintenance could be moved from the Parks, Recreation, and
Community Services Department to the Public Works Department and the work would be
contracted with private vendors.
• Custodial services throughout the City would be contracted with a private vendor.
• Workers' Compensation and Risk Management functions would be contracted to a third
party administrator to reduce costs and enhance efficiencies.
• Essential services such as front-line police and fire personnel are preserved; however, cuts to
proactive policing and fire prevention programs, parks, community development, libraries,
and public works programs are substantial.
• Personnel reductions and organizational restructuring are estimated to reduce salary and
benefit costs by$15.66 million annually.
C. Preserving Essential Safety Services
1. Fire Department
Continued cuts to the Fire Department will have a negative impact to internal operations
and will affect the residents of San Bernardino. However, the Administration and Fire
Department Management, have the responsibility of taking the necessary actions to
insure the City will continue to provide essential services to the public for the long term.
Nevertheless, cuts to public safety can't be ignored during a bankruptcy. In fact,
necessary but prudent cuts will have to be made.
Fire Department Comparisons
To put the proposed cuts in context, Fire Management staff researched two cities that
have filed bankruptcy in California. The comparison is based on how the cities of
Vallejo and Stockton managed their fire departments prior to and after bankruptcy.
VALLEJO -Upon entering bankruptcy, four of Vallejo's eight fire stations were closed.
These closures caused daily fire suppression staffing to be reduced from 28 to 15 on-
duty personnel. Vallejo has since re-opened one fire station after obtaining a SAFER
grant. (Information obtained through personal contact with Vallejo Finance
Administration Staff and a National Public Radio On-line Report 9-27-10)
STOCKTON—Stockton had a fire department that was similar in size to San Bernardino
and a population that is larger by approximately 100,000 people, with similar
demographics. Two years ago, Stockton began by eliminating a five-person truck
company and followed that by closing a four-person engine company. The City of
Stockton continued budget cuts by reducing the 13 remaining engines to three-person
staffing and three truck companies to four-person staffing. This resulted in 36
firefighters being laid off. (Information obtained through personal contact with Dave
Rudat, Interim Fire Chief,on July 13,2012)
In addition to the above, Vallejo and Stockton Fire Department employees gave up
significant salary and/or benefits,either prior to the bankruptcy filing or as a result of the
filing.
Several of the City's neighboring fire departments have reduced fire suppression staffing
the last several years:
• Colton Fire Department has eliminated an Engine Company,paramedic squad, and a
Chief Officer position
• Rialto Fire Department eliminated an Engine Company, 2 Chief Officers, and the
Fire Marshal position
• Redlands Fire Department has eliminated 3 Chief Officers positions
• Loma Linda Fire Department eliminated a Chief Officer position and is sharing
administrative duties with the Colton Fire Department
Prior Budget Reduction Actions
Like other City departments,the Fire Department's cuts began in 2008 with concessions
from the fire management group and then continued with various concessions from all
the employee groups within the Fire Department over the following years. Personnel
cuts have also been made during this time period and have resulted in some unavoidable
negative impacts.
32 -
Fire & EMS Program - Eighteen firefighter positions have been eliminated, this
resulted in six engine companies being reduced from four-person staffing to three-person
staffing. Currently, only two truck companies and one single engine company has four-
person staffing. This equates to an 11% reduction in fire suppression personnel
compared to 2008 levels.
This has caused firefighting companies to lose efficiency on the fireground, as well as
other emergency incidents they respond to. Staff members have been asked to "do more
with less" and have done a terrific job. The recommended standard as set by the
National Fire Protection Association(NFPA) is for engine companies to be staffed with
four people. The City's goal was to work toward that recommendation prior to the
downturn in the economy. The Administration and Fire Management recommend the
City continue to seek the NFPA recommended level of four personnel per company
when financially possible.
Chief Officers- A total of three chief officer positions(Deputy Chief, Fire Marshal and
Training Division Chief)have been vacated. These vacancies became effective with the
action the City Council on July 2, 2012. This has resulted in a daily staffing level of one
Fire Chief during the day and two Battalion Chiefs working a 24-hour shift schedule.
Prior to this cut, there had already been a reduction of one Chief Officer Position and a
management re-organization to handle the responsibilities in a safe and effective
manner. The current management structure of the Fire Department is unsustainable for
any length of time. The Deputy Chief and Fire Marshal positions need to be filled
within this fiscal year.
The current staffing equates to a 30% reduction of Chief Officers as compared to 2008
levels.
Community Risk Reduction Program — To date, a total of 6 of the 15 positions have
been eliminated: Senior Administrative Assistant, Fire Plans Examiner, Fire Prevention
Officer, Fire Prevention Technician, Code Enforcement Officer II, and Public Education
Officer. In addition, a Fire Prevention Officer (FPO) retired effective August 1, 2012,
and the position will be left vacant. Any further vacancies in the Community Risk
Reduction Program can be held vacant,thereby achieving further cost savings.
The continued reduction in staff will result in a loss of revenue, delays of fire plan
checks, reviews/inspections, inspections of permitted occupancies (i.e. restaurants, day
cares, churches, commercial buildings, etc.), and delays of multi-family housing
inspections, as well as a decrease in service to developers interested in beginning
projects in San Bernardino. At this time, it is not possible to calculate the loss of
revenue. The department will no longer have a proactive Public Education program,and
the City will be limited in their participation in community events.
During the remaining portion of this fiscal year, the Administration and Fire
Management anticipate the need to either out-source or hire part time personnel to assist
with fire plan check reviews. Primary reasons are due to the complexity of the plans and
lack of staff available to review them in a timely manner.
The Community Risk Reduction Program is self-sustaining and provides an essential
service. After reviewing the structure and complexity of the program, Administration
and Fire Management do not feel that the same job can be "handed off'to someone else
to provide the service without a significant loss of revenue and service to the citizens.
There would be no viable cost savings associated with any further re-organization of the
Fire Prevention Bureau.
The current staffing equates to a 30% reduction of the Community Risk Reduction
Program compared to 2008 levels.
Administration and Fleet & Equipment Program — The Administration and Fleet &
Equipment Program has sustained a total loss of three positions: Training Captain,
Administrative Assistant Training, and an Equipment Mechanic R. This has left only
four personnel in the Fire Shop and seven personnel in Administration.
The Fire Department is no longer able to offer training classes, which did provide a
source of revenue,to the department members and to those outside the department. The
ability to maintain the fire apparatus is becoming increasingly challenging due to limited
manpower and lack of funding for replacement parts and/or apparatus. Further cuts to
shop personnel would greatly jeopardize response capabilities and the safety of
personnel.
Administration and Fire Management recommend no further cuts be imposed in the
Administration and Fleet&Equipment Program area. In the event of future retirements,
some of the positions may be held temporarily vacant requiring staff to come in on
overtime to continue essential operations based on the need of the department. The
exceptions would be that if either the Emergency Medical Services Coordinator or the
Administrative Analyst I1 positions become vacant, these positions would need to be
filled immediately.
The current staffing equates to a 40%cut of personnel as compared to 2008 levels.
Disaster Preparedness Program — The Emergency Services Manager assigned to this
program was also identified in the City Council action of July 2, 2012, to be held vacant
through attrition. Administration and Fire Management anticipate this to occur prior to
the end of 2012 calendar year. Approximately 60% of this position is funded by grant
monies. At this time, Administration and Fire Management cannot estimate the savings
associated with this position. The loss of this position will require the duties and
responsibilities be reassigned to another City department as they are vitally important.
The loss of this position will severely limit our ability to prepare and respond to both
man-made and natural disasters, our ability to recoup our costs associated with providing
service during these incidents, leaving the City liable for the cost, and our ability to
apply for and manage grants that we currently rely on for equipment and training.
-- -- ------
44 —.
Emergency Communications–There are eleven personnel assigned to the Fire Dispatch
Center, including a Fire Communication Manager and ten Dispatcher II positions. The
Fire Department's Emergency Communications Center is located at the Police
Department Dispatch Center. This is the minimum number of staff needed to provide
for two dedicated fire dispatchers on duty 24 hours a day and supervision.
Over the past several years, out-sourcing fire dispatch services has been explored with
the dispatch center run by San Bernardino County, known as Comm Center. The result
has consistently been that out-sourcing will not provide a monetary savings to the City
nor increase efficiency of dispatch operations. This can be explored again as an option.
Fire Management has made some preliminary inquiries but would need to receive
further direction to pursue an official proposal
There are several factors that could complicate this potential move. The City has a
contractual obligation to provide dispatch services for the San Manuel Band of Mission
Indians(SMBMI)Fire Department. The contract will expire in July 2017. This contract
has been paid in full by SMBMI and would have to be re-negotiated. Also,the City has
a contract with American Medical Response (AMR) which generates approximately
$320,000 annually in revenue to the City. This is accomplished through an agreement
with the Inland Counties Emergency Medical Agency (ICEMA) and AMR, enabling
AMR to reduce staffing based on our ability to arrive on scene and provide Advanced
Life Support (ALS) services. A percentage of their savings are passed on to the City,
based on the response times. These agreements would have to be re-evaluated to
determine what, if any, impact there may be if a change were made.
The City's Dispatch Center also utilizes Emergency Medical Dispatching(EMD),which
is now becoming the industry standard. EMD allows the City to prioritize medical
emergency calls and send only an ambulance if appropriate. Comm Center is adopting
this program and this too will have to be evaluated to determine the impact to our
contracts and agreements.
Administration and Fire Management believe it would take several months, if not
longer,to evaluate and implement out-sourcing of our fire dispatch services, if it proved
to offer tangible benefits. At this time,there are no changes proposed to the Emergency
Communications Program for this fiscal year, however, it may be prudent to consider
out-sourcing in the foreseeable future.
The net result of the cuts currently in place is a total of 25 positions either vacated or
eliminated department wide. This includes the retirement of the FPO position on August
1, 2012, which will be held vacant. This is an approximate cut of 15%, department
wide,as compared to 2008 staffing levels.
Proposed Restructurinv in the 2012-2013 Budret
As referenced above, on July 2, 2012, the City adopted the proposal for the Fire
Department Staffing Efficiencies presented by the City Council. The proposal identified
45 —
reductions to areas of the Fire Department that were considered non-critical. The
implementation of this proposal was projected to provide$950,000 of cost savings in the
Fire Department for FY 2012-13.
In addition to this proposal, the Fire Department has reviewed the FY 2012-13
discretionary funds and submitted to the Director of Finance additional proposed
savings. The potential savings is $82,200 annually and is attributed to the reduction of
non-critical staffing and associated program areas. The combined total is an estimated
savings of$1,032,200 for FY 2012-13.
To achieve additional budget efficiencies, several measures are recommended.
Measure I - Eliminate seven vacant firefighter positions which are currently backfilled.
This will result in both truck companies and one single engine company being staffed as
three-person companies. This will affect both Truck 224 and Truck 221 on all shifts and
ME231-A Shift. These ladder trucks are housed in the north and south battalions
respectively and ME231 is located in the south end of the City on Vanderbilt Way.
These positions are currently vacant and there will be no lay-offs of personnel or backfill
required due to constant staffing following elimination. This will achieve an
approximate savings of$946,879 annually in salary and benefits.
Measure 2 -Unstaff one Engine Company. This will reduce the total number of engine
companies in the City from 12 to 11 and result in a loss of three Fire Captains,three Fire
Engineers, and three Paramedic/Firefighter positions. Unfortunately,there will be a total
of nine demotions as a result of this cut. Each of the individuals demoted will maintain
reinstatement rights for two years. With projected retirements, all but a few will be
reinstated by the end of this calendar year, and the remainder will be reinstated next
year.
There will not be any lay-offs as a result of this proposed cut. The demotions will be
absorbed by positions that are currently vacant and are backfilled each day. This cut
will achieve an approximate savings of$1,409,499 annually in salary and benefits.
There are alternative methods that can be used to facilitate the loss of the Engine
Company,none of which are desirable.
• Rotate the closure among several stations throughout the City(Brown Out)
• Close one single station in the City
46
Each method has its advantages and disadvantages. After consulting with fire
department staff and surrounding fire departments that have had to implement similar
cuts, the Administration and Fire Management recommend the brown out option for
several reasons. This would allow the City to maintain optimal coverage in the core of
the City where the bulk of the call load occurs. It would have the least impact on overall
response times and provide reasonable coverage to all areas of the City. It would also
provide for the best station security and logistical management of staffing. Based on
these desired results,Fire Management proposes browning out the following stations:
• Station 225 —located near Kendall and University(5th Ward)
• Station 228—located at Highland and Orange(4th Ward)
• Station 229—located at 2nd and Meridian (3rd and 6th Ward)
Each fire station would be closed for 48 consecutive hours approximately once a week
for a total of ten days per month on average. The rotation would follow the shift
schedule, allowing for staff and fire personnel to adjust workloads, plan for staffing and
maintain station security. Coverage can be adjusted based on weather events, planned
events within the response district or any other issue that may arise.
Each of the stations selected averages four calls per 24-hour period; this would impact
the least number of calls per day and still maintain reasonable coverage to the City.
Station 232,located on Palm and Kendall,does average two calls per 24-hour period but
due to an extended response time into the district from surrounding fire stations and
other factors,this fire station was removed from the proposed brown out.
Fire Management remains concerned about the effects of these cuts and the impact they
will have on the following:
• An increased risk to public and firefighter safety due to the inability to provide
sufficient management of incidents.
• A possible increase in response times to both fires and medical emergencies. These
factors could result in an increased loss of life and property.
• Potential loss of revenue from our AMR contract.
Fire Management has expressed deep concern about the cuts to staffing and the possible
effects these reductions could have on the department's operation. However, given the
financial health of the City, severe cuts from all departments,including public safety,are
necessary to solve this problem. The cost saving of Measures 1 and 2 outlined above
will reduce staffing on a daily basis from 48 on-duty suppression personnel to 43,
including Chief Officers. This will still allow for a reasonable fire safety response to the
citizens of San Bernardino and achieve the necessary savings.
47
Fire Department Budget Reductions Summary
On June 27,2012,the Fire Department accepted the 2011 SAFER grant in the amount of
$3,363,972. This will allow the City to retain 12 fire safety positions commencing FY
2012-13. The funding awarded is for a two-year performance period and is for the
retention of fire personnel and not intended for hiring. With the acceptance of the 2011
SAFER grant, the Finance Department is making the necessary adjustments to the Fire
Department's proposed budget for FY 2012-13. The net result, of the proposal the
Administration and Fire Management have presented would be an overall reduction of
23% of personnel from the Fire Department from 2008 staffing levels. Personnel cuts
and program savings will have been achieved from each division of the department
excluding the Emergency Communications Program.
Table 18—Proposed Fire Department Staffing Reductions
Hit Savings
Staffing Efficiencies 3 $950,000
(deleted Public Education Officer, reassign
Battalion Chiefs to 24 hour shifts, vacant
Deputy Chief&Fire Marshal)
Reduction of Discretionary Funds N/A $82,200
Vacant-Fire Prevention Officer 1 $83,600
Option 1: Vacate Firefighter positions 7 $946,879
(reduce 2 truck companies to 3 person staffing)
Option 2:Vacate Engine Company 9 $1,409,499
(3 Captains, 3 Engineers,3 Paramedic/
Firefighters)
Total Reduction 20 $3,472,178
Please note the projected savings amount will be reduced the later these cuts are adopted
in the fiscal year.
48
2. Police Department
I
At the peak of staffing levels, the Police Department had an authorized sworn staffing
level of 356 officers and a civilian contingency of 180. Current `actual' staffing levels
are 289 sworn and 173 civilian. The current deployment model is based on staffing
levels of around 299 sworn and 180 civilian. Any staffing reductions beyond current
levels require reorganization and careful analysis of services provided and how those
services are administered.
The Police Department has been through several rounds of budget reductions in previous
years. Reductions of personnel have been accomplished almost entirely through
attrition. The remaining employees have had their compensation reduced through labor
agreements for the last three years. The Department currently operates "essential" or
"first responder staff' on a 24/7 schedule; a significant portion of civilian personnel
work a reduced workweek.
The Police Department's budget contains very few discretionary items outside of
personnel-related expenses. Over 80% of the budget is allocated to direct costs for
salary and benefits. The majority of the remaining budget includes items such as
building,fleet,technology and operating expenses.
Proposed cuts can be categorized into those achieved through non-personnel reductions,
personnel reductions through attrition, and personnel cuts through layoffs. The
categories also mirror the order in which the Administration and Police Management
went about determining proposed cuts. First, the Department went through the budget
line-by-line and reduced or eliminated costs within each category wherever possible.
Next, Police Management carefully analyzed retirement-eligible population of staff and
conservatively estimated which personnel will leave and when they will leave in order to
calculate anticipated savings through attrition. Based on those estimated savings, Police
Management looked, as a last resort, at what layoffs would have to be made to reach a
10%reduction goal.
Non-Personnel Reductions: Due to the spending cutbacks already made, there is little
room for further non-personnel reductions. The Police Department has, however,
identified another$265,000 in cuts. This includes severe limitations on overtime as well
as cuts to training, equipment, ammunition, supplies,and other expenses. Some of these
categories will be cut by 60%. Additional details are provided in the impacts section
later in this report.
It will be necessary to restore many of these cuts in future years. Some of the cuts, such
as ammunition, were made based on current inventories and minor changes to regular
training and operations. However, the cuts can only be temporary in nature and would
need to be restored later to meet long term needs.
49
Personnel Cuts through Attrition- Some of the attrition projections are based on
commitments to retire while others are reasonable estimations based on employee
statements that are not binding. The table below is a summary of the reductions.
`Fable 19—Proposed Sworn Staffing Reductions
Captain 1 $238,094
Lieutenant 1 $200,371
Sergeant 5 $840,485
Police Officer 11 $1,459,193
Totals 18 $2,738,143*
* Projected savings through sworn attrition$2,738,143
The captain position reduction is based on a tentative agreement for funding from the
Water Department. The funding would be for one year, after which the position would
be held vacant through anticipated attrition. An agreement is pending for the Water
Department to fund the position in exchange for work to be performed on Water
Department projects.
It is recommended that any positions vacated through attrition be frozen rather than
eliminated so it may be filled at a later time when the City's economic situation
improves.
Personnel Cuts through Reduction in Force-At the start of the current fiscal crisis,the
Department accepted a Federal COPS grant which funded the hiring of thirteen police
officers. This grant expires at various times throughout Fiscal Year 2012-2013, based on
the hire dates of the officers. Elimination of these positions would not create any
General Fund savings and would create a liability to repay the grant of approximately
$3.9 million in part or in its entirety. The Department's civilian staff members are
tremendously valuable to the organization and the services they provide. However,
based on the COPS grant commitment, attrition rates, and essential service needs, the
necessary reduction of filled positions will center on civilian staff.
Civilian staff provides direct services to the public and support services to allow the
department to operate more efficiently. The range of these classifications is from cadet
(part time entry level positions) to division manager. The part time positions are
discussed in detail below by category. The full time position cuts are summarized below
and detailed in the table. The Administration and Police Management have carefully
evaluated every position in the organization for potential elimination. The positions
proposed were identified based on specific function and expense. The vast number of
positions proposed for elimination will require significant structural changes, some of
which are outlined later in this report.
Part Time Filled Positions - The Department currently has seven stenographers who
produce reports from recordings made by officers and detectives. Three of the seven are
part time employees. The three part time positions,are proposed for elimination. Under
this proposal,the backlog of reports would grow and officers and detectives would now
have to type more of their own reports instead of dictating them. The overall impact in
the short run would be more officer time spent on report writing. Long term impacts can
be mitigated with the implementation of new technology and training options to make it
more efficient for officers to type their own reports. The estimated annual savings is
$82,000.
The Department currently provides crossing guard services to several local school
districts within the City through various agreements. The cost for these part time
employees is typically shared with each school district. It is proposed the Department
terminate the crossing guard program. The contracts would have to be strategically
terminated depending upon the individual contract language. The impact is uncertain
because it is unknown if the districts would fund the program themselves. Although the
function of crossing guards is an essential service, continuing to have it provided by the
police department will have negative impacts in other areas of direct police services.
Assuming a quick decision and implementation,the annual net savings is $227,600.
The Department currently has an employee in the academy training to become a police
officer. The position is classified as part time for the purposes of payroll and budget. It
is recommended the position be eliminated. This person was previously a Community
Services Officer(CSO). If adopted, staff will work with the employee in an effort to get
him employed with another local agency upon graduation. A budget savings is not
anticipated as the position is funded through salary savings already.
The Cadet program currently has thirteen cadets and is grant-funded through February
2013. Barring identification of an unexpected funding source, it is recommended the
program be discontinued at the end of the funding cycle with all remaining cadets being
let go. Elimination of the program is a cost neutral measure. However, the Cadet
program provides valuable support services in many areas as well as a valuable
recruiting and development tool to attract and develop young local residents into full
time police employees. Future funding of the program is recommended when economic
conditions improve.
Full Time Filled Positions-The remaining reductions in force are from full time filled
positions. They are listed in the table below.
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Table 20—Proposed Non-Sworn Staffing Reductions
RT
Current Positions Proposed Re'dWAW
Supervisor
$73,055
Kennel Supervisor 0 1
Executive cuti Assistant xecutive Assistant 3 2 1 $70,857
Evidence Technician 3 2 1 $74,103
Forensic Technician 12 8 4 $324,456
Dispatch Manager 1 0 1 $104,220
Admin Analyst I 1 0 1 $45,343
CSO Supervisor 2 0 2 $182,106
CSO 11 17 13 4 $259,288
CSO 1 28 11 17 $966,529
Records Tech 1/11 26 23 3 $163,287
Parking Officer 5 3 2 $113,674
P&T Manager 1 0 1 $99,603
P&T Coordinator 1 0 1 $74,103
P&T Technician 2 1 1 $70,857
Records Manager 1 0 1 $95,229
Totals 104 63 41 $2,326,078
Organizational Impact
The enormity of the cuts outlined above will undoubtedly diminish the quantity and
quality of services the Police Department is able to provide. The identified positions
have been carefully selected in an effort to minimize the impact to core services such as
patrol response. However, in order to implement these types of cuts, there will be a
significant reorganization and reprioritization of services provided.
A sizeable portion of the cuts will ultimately impact wait times for lower priority
services and availability of proactive resources (District Resource Officers, Gangs,
Narcotics, and others). Our priority during this difficult time will be to focus on staffing
at levels necessary to safely respond to emergency calls for service. Other priorities will
52
follow and remaining resources will be allocated accordingly. The City recently entered
into an agreement with the Police Executive Research Forum (PERF) to evaluate the
Department. Part of the analysis will include prioritization and allocation of resources.
Although the Department will focus on priority related call response times, the time
spent waiting for reports to be taken or for officers to respond to more minor matters
will undoubtedly increase. We will work toward changing the way these services are
delivered and make every effort to become more efficient and to utilize technology
wherever possible.
The non-personnel related cuts will also impact operations. Due to previous budget
reductions, the margin to cut from is very thin. The Department's aging technology
infrastructure is a major concern. Replacement equipment dollars have been reassigned
or cut completely in the last several budget years. Large-scale technology improvement
funding initiatives will be necessary in the near future.
The reductions will also take us backward in many respects to supervision, leadership
and accountability. The cuts significantly reduce the management and supervision ranks
of the organization. In comparison with other agencies for example, we already are low
on the number of lieutenants before the cuts. The long-term consequences of reducing
our supervisory and leadership positions could be significant.
The implications outlined above are the significant known impacts. There are other
areas that will be impacted not outlined herein; some are known and others are unknown
at this point.
Police Department Budget Reductions Summary
The net result, of the proposal the Administration and Police Management have
presented would be an overall reduction of 59 personnel from the Police Department.
Personnel cuts and program savings will have been achieved from each division of the
department excluding the Emergency Communications Program.
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Total estimated savings are listed in the table below:
Table 21 —Total Estimated Savings
E
F on-sworn savings via attrition $390,635
worn savings via attrition $2,738,143
educ tion in filled full time positions $2,326,078
Reduction in filled part time positions $309,600
Non-personnel related reductions $265,000
Total $6,029,456
D. Maintaining the City's Investment in Infrastructure Through Service Delivery
Changes in Community Development, Public Works, and Parks, Recreations &
Community Services
1. Community Development
Over the past several years, the Community Development Department staffing has been
reduced significantly. However, the workload of the department has been impacted by
the recession. The number of permits and plan checks significantly declined as
investment in the City has dropped with the burst of the housing bubble. The City is
beginning to see an increase in development activity for industrial activity.
Additionally, the Successor Agency will soon begin the process of selling the EDA
properties, which could lead to substantial development activity and investment in the
City. Because of new growth opportunities, it is recommended that reductions be
balanced against the need to ensure staffing and resources are available to meet the
demands of developers and others interested in investing in San Bernardino.
Proposed Restructuring
Despite previous reductions in workforce,the Community Development Department has
options available to maintain basic and essential services while reducing costs. This is
possible through adjustments in services delivery; specifically, contracting out and
consolidation of duties.
It is recommended the City eliminate one Building Inspector Supervisor, one Building
Inspector, one Technician one Engineering Associate, one NPDES inspector, one
NPDES Coordinator, one Department Accounting Technician, one Administrative
Assistant, and one Customer Service Representative (admin). Most of these duties will
be handled by contractors. The Building Official would assume responsibility for
supervising the field personnel, which will impact the amount of time available for his
other duties. With the elimination of the Building Inspector III position, the City will
return the responsibility for the mobile home park inspections to the State. The loss of
the Technician position,which currently provides customer service at the front counter,
will require moving the Assistant Planner to the front counter to assist customers, which
will have some impact on the Planner's ability to write staff reports, prepare zoning
verification letters and complete other assignments. As direct customer service will
consume much of the time, some of the duties handled by the Planner will be reassigned
to the other Planner and the Manager.
Despite the reduction, it is anticipated that sufficient staff will remain in order to provide
proper oversight to contractor's work.
2. Code Enforcement
There is no question that proactive enforcement of the City's codes is needed throughout
the City. The City is dealing with significant number of foreclosures and a recessionary
economy which is making general maintenance of some properties less than desirable.
There are currently 3,083 open code enforcement cases within the CRM system as of
August 14, 2012. Moving forward, staff needs concentrate on clearing existing cases
and dealing effectively with repeat offenders.
As part of the restructuring, it is recommended that Code Enforcement be moved to the
Police Department. Despite the importance of code enforcement efforts and the impact
of the maintenance of the community on investment decisions, given the City's financial
condition,reductions in code enforcement are necessary.
Proposed Restructuring
The code enforcement division currently consists of one Code Enforcement Manager,
three Supervising Code Enforcement Officers, two Senior Code Enforcement Officers,
23 Code Enforcement II positions, one Code Enforcement Officer I position, and one
Weed Abatement Coordinator. It is recommended the following positions be eliminated:
• Five Code Enforcement II positions
• One Supervising Code Enforcement Officer
• Two Senior Code Enforcement Officers
• One Weed Abatement Coordinator
• One Code Enforcement Officer I
• One Customer Service Representative
The annual savings related to these cuts is $937,194. Overall, it is anticipated there will
be a reduction in service and an increase in response times based on the proposed cuts.
Despite the cuts, 18 Code Enforcement Officer II positions, two Supervisors, and one
Code Enforcement Manager position would remain.
3. Public Works
The Public Works Department staffing will be reduced by 45 positions. Of these, 34
positions are, full time and I I are part time. The percent deleted is 13% totaling $1.9
million for all funds. The total frozen is $608,000. These represent across the board
cuts as follows:
Administration
• Administrative Division Manager — These duties would be reassigned to the
Department Director;Annual savings—$134,000
• Environmental Projects Assistant — There is insufficient projects to justify this
expense. All environmental projects will be assigned to one existing environmental
projects position; Annual savings—$63,400
• Executive Assistant — There has been a reorganization of the division under the
director; Annual savings—$72,000
• Senior Office Assistant — There has been a reorganization of the division under the
director. Elimination of this position will require the Administrative Services
Supervisor cover assigned duties;Annual savings—$50,039
• Departmental Accounting Technician —Payment and processing of invoices for the
division will be assigned to the Senior Office Assistant. The total cost of this
position is$54,700.
Integrated Waste
• Integrated Waste Operations Supervisor —The total cost of this position is $84,500.
Reductions in revenue and increased operating expenditures require the department
eliminate a supervisor resulting in a savings of$84,500.
• Senior Integrated Waste Operator —The total cost of these 3 positions is $190,200.
Trucks will be rerouted and less vehicles will be used for trash pick-up. The cost of
3 leases for trucks is estimated at$150,000 resulting in a total savings of$340,200.
• Integrated Waste Operator — The total cost of three positions is $157,200. Trucks
will be rerouted and less vehicles will be used in the operation. The cost of
equipment is estimated at$150,000 resulting in a total savings of$307,200.
• Integrated Waste Operations Manager —The total cost of this position is listed as
,vacant/unfunded'. The division manager will address job duties.
Fleet Operations
• Fleet Parts Technician — The parts duties will be assigned to the Manager and
Supervisor resulting in a savings of$69,478.
• Fleet Parts Storekeeper—The total cost of this position is $57,996. The parts duties
will be assigned to the Manager and Supervisor resulting in a savings of$57,996.
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• Fabricating Welder—Welding will be contracted out. The total cost of this position
is $72,837. The cost of welding is estimated at $40,000 resulting in a savings of
$32,837.
Custodial Services
• Custodial Maintenance Supervisor —The total cost of this position is $61,600. Due
to lack of general funding available for custodial work, the supervision is eliminated
and lead personnel will be assigned job duties by the manager.
• Supervising Custodian—The total cost of this position is$63,600. Due to the lack of
general funding available for custodial work, the supervisor position is
recommended for elimination.
• Custodian —The total cost of 6 part time positions is $67,500. Assignments will be
made in common areas monthly.
Maintenance
• Extra Relief Heavy Laborer —The total cost of this part time position is $11,250.
The work will be completed by other laborers as assigned.
• Maintenance Worker II — The cost of the position is $57,200. Right of way and
graffiti response time will be reduced 30 percent.
• Maintenance Worker II(Signs)—The cost of this position is $60,600. There will be
a reduction in staffing of 33 percent in sign replacement. Savings: $60,600.
• Heavy Equipment Operator—The cost of this position is $72,800. There will be a
reduction in staffing of 33 percent in operating heavy equipment city wide.
• Sewer Maintenance Worker —Eliminate 2 positions. The cost of these positions is
$132,600. There will be a staff reduction of 20 percent in sewer ops.
• Electrician I—The cost of this position is $72,300. Street lighting operations will be
staffed less by 33 percent.
• Extra Relief Heavy Labor — Eliminate 2 positions. The cost of these two part time
positions is $22,500. The response time for right of way and maintenance in public
areas will be impacted and requests added to the City CRM system.
• Traffic Signal Technician III—The cost of this position is $86,300. The work will be
contracted out. The cost for contract work is estimated at $50,000 resulting in a
savings of$36,300.
Public Works
• Construction Inspector IT — The total cost of the two positions is $174,956. The
work will be contracted out. The cost of contracted work is estimated at $70,000
resulting in a savings of$104,956.
• Engineering Assistant III —The total cost of this part time position is $30,650. New
capital projects have been deferred resulting in a savings of$30,650.
57
• Engineering Assistant II—New capital projects have been deferred. The total cost of
this part time position is$27,970.
Positions that would be held vacant include:
• Director of Public Works —The total cost of the position is $245,368. It is
temporarily contracted out at a cost of $16,000 per month resulting in an annual
savings of$53,368.
• Administrative Analyst II position (1) — This position would be held vacant until
development activity improves. The total cost of this position is$97,500.
• Traffic Operations Systems Analyst —The total cost of this position is $106,800.
Traffic engineering has been contracted out to private firms. Estimated cost for
contract work is$75,000 resulting in a savings of$ 31,800.
• Real Property Manager —The total cost of this position is $104,200. The real
property work is being performed part time by a retired individual. Substantial
development or divesture of EDA properties will require adjustments to meet service
delivery. The estimated cost for contract work is $50,000 resulting in an annual
savings of$54,200.
• Fleet Services Manager—The total cost of this position is $137,700. The equipment
manager is currently handling the job duties of this position. The City is reviewing
proposals to outsource trash hauling that could affect fleet operations. Based on this,
it is recommended the position be held vacant at an annual savings of$137,700.
• Senior Civil Engineer—The total cost of this position is$138,807. The work can be
contracted out as capital project funding is identified. The Principal Engineer will
supervise capital plan development in house. Savings: $138,807.
• Facilities Maintenance Supervisor —The total cost of this position is $93,500. The
manager will oversee all work orders for all city buildings and facilities. Savings:
$93,500.
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Table 22—Proposed Public Works Staffing Reductions
Administrative Division Manager Eliminate $134,000
Environmental Projects Assistant Eliminate $63,400
Executive Assistant Eliminate $72,000
Senior Office Assistant Eliminate $50,039
Integrated Waste Operations Supervisor Eliminate $84,500
Construction Inspector II(2) Eliminate $104,956
Engineering Assistant III(PT) Eliminate $30,650
Engineering Assistant II(PT) Eliminate $27,970
Fleet Parts Technician Eliminate $69,478
Fleet Parts Storekeeper Eliminate $57,996
Fabricating Welder Eliminate $72,837
Accounting Technician Eliminate $54,700
Sr. Integrated Waste Operator(3) Eliminate $190,200
Integrated Waste Operator(3) Eliminate $157,200
Extra Relief Heavy Laborer(PT) Eliminate $11,250
Custodial Maintenance Supervisor Eliminate $61,600
Supervising Custodian Eliminate $63,600
Custodian(6 PT) Eliminate $67,500
Maintenance Worker II Eliminate $57,200
Maintenance Worker II(Signs) Eliminate $60,600
Sewer Maintenance Worker(2) Eliminate $132,600
Electrician I Eliminate $72,300
Extra Relief Heavy Labor(2) Eliminate $22,500
Traffic Signal Technician III Eliminate $36,300
Heavy Equipment Operator Eliminate $72,800
Technician Eliminate $69,478
Total Savings $1,897,645
The net result of the proposal the Public Works has presented would be an overall
reduction of 45 personnel from the Department. Personnel cuts and program savings
will have been achieved from each division of the department.
Total estimated savings are:
Savings via Reduction in Workforce $1,897,645
Savings via Vacancies $606,875
Total $2,504,529
4. Parks Recreation & Community Services
Since July 2008, the Parks, Recreation & Community Services Department has
experienced a 32%reduction in staffing and a significant decrease in resources available
for maintenance and operations. Given the limited areas in which to further reduce costs
and demand for service, the Administration and management have focused on
eliminating programs that had grant funding and identifying more cost efficient ways to
provide service.
Closure of the Operation Phoenix West and Operation Phoenix East Centers
The Operation Phoenix Program operates two centers including Operation Phoenix West
located at Anne Shirrells Park (Ward 6) and Operation Phoenix East at Speicher Park
(Ward 7). These centers are currently being funded by a Department of Justice (DOJ)
grant that was scheduled to run through FY 2012/2013. It is now anticipated that the
earmark will expire in September 2012. Given the fact that continued operation of the
two centers would require a General Fund commitment due to the expiration of the DOJ
funding, the Administration recommends closing both of the centers at an estimated
savings of $145,000, which represents the anticipated funding from July 1, 2012,
through September 1,2012.
Impact: The Operation Phoenix West community center is dilapidated and requires
replacement as addressed during a recent site visit by the California State Parks
Department. With respect to the Operation Phoenix East,the recent partnership with the
Disabled Veterans Group/exploratory garden provides the framework for a continued
presence as the facility is a major hub for social,recreation and educational activity.
LMD. Parks and Tree Maintenance Programs
Contracting out for the maintenance of the City's Landscape Maintenance Districts
(LMDs), parks maintenance and tree maintenance and reassignment of these
responsibilities to the City's Public Works Department is recommended in an effort to
address park and landscape maintenance issues within the available resources. LMD
maintenance is addressed under separate cover.
60
Impact: This action would result in the elimination of 31 positions. Five positions
including three landscape inspectors, one park maintenance supervisor and an arborist
would be retained to provide oversight of the contract services. Further, this would
eliminate the equipment challenges and increase service delivery while providing a more
consistent response in the event of emergency call outs. The estimated annual savings of
contracting the LMD,park and tree maintenance is$800,000.
Department Administration
Elimination of the Deputy Director position and downgrading of the Administrative
Services Manager position to a Management Analyst is recommended.
Impact: In FY 2009, the Department eliminated 2 administrative support positions as
part of the 32%personnel reductions. The office maintains one bi-lingual Administrative
Assistant and one Administrative Assistant assigned to the Main Office and the
Cemetery operations. Currently, staff work and departmental budgeting and analysis is
provided by the department head. The elimination of the Deputy Director position and
change in the Administrative Services Manager position to a Management Analyst will
impact the Department's ability to respond to requests for services. The change will
result in an annual savings of$230,000.
E. Implementing Service Efficiencies and Consolidation of Administrative Services
Functions
1. City Clerk
Over the past several budget cycles, the City Clerk's Office has largely avoided
personnel cuts by eliminating training, and cutting supplies and other less critical
budgets. With those already cut to the bare minimum, it is clear that in order to
adequately respond to the city's current financial crisis and be a meaningful part of the
budget solution, the City Clerk's office must make draconian cuts, and these cuts must
include personnel.
This situation is not ideal. The Clerk's office can ill afford to lose staff in what is an
extremely busy and visible office. Nevertheless, we can continue to provide responsive
service to internal and external customers through this difficult time with a combination
of lay-offs, back-filling and temporary help for special projects. This is true for both the
Administrative Division and the Business Registration Division.
Specifically, the Clerk's office proposes a 20 percent cut in its budget, or approximately
$432,000, to include $386,175 in staffing and $46,000 in operating costs. The decreased
staffing will be addressed with a reorganization of the office, cross training and
increased duties on the remaining staff, greater use of technological and online
resources, procedural changes in the agenda creation process and project-specific
temporary part-time hires.
To address the increased workload issues in the City Clerk's Office as well as the City
Attorney's office caused by the recent bankruptcy filing, the agenda review timeline will
be moved forward, so that documents to be placed on the agenda will be due to the City
Attorney's office on the Thursday 12 days prior the scheduled meeting, rather than the
Monday seven days prior. This allows the City Attorney's staff and the City Clerk staff
extra time for review of the documents being provided in the agenda back-up.
Deeper cuts than those proposed herein would lead to unacceptable consequences,
including being unable to adequately respond to the plethora of public records requests,
business registration calls, and claims filed specifically in response to news of the city's
financial crisis and pending bankruptcy.
Table 23 —Proposed City Clerk Staffing Reductions
Customer Service Rep(2) Eliminate $121,114
Accounting Technician Eliminate $52,647
Business Registration Inspector Under Fill $42,407
Assistant City Clerk position Eliminate $105,626
Executive Assistant to the Director Freeze $64,381
Total Savings $386,175
2. Information Technology
The IT Department proposes staffing reductions of $668,900 from the department's
various funds. These reductions will result in an understaffed IT department that can
support only the most basic Information Technology systems and infrastructure.
This proposal completely eliminates the Telephone Support program. It also
recommends a reduction in IT Department supplies, outside training, computer
replacement funds, contractual services, and the elimination of seven positions, resulting
in a 30%cut in staffing.
The elimination of the Telephone fund will result in the less-critical Telephone
Coordinator duties being discontinued and others, such as telephone bill payment and
cell phone support, being absorbed by IT positions such as the Departmental Accounting
Technician and the Business Systems IT Analyst II position, respectively. Telephone
contract negotiations and vendor management will be absorbed by the Director of
Administrative Services. Telephone vendor costs will be moved to the IT Department's
operating budget and charged back via the department's current allocation system. City-
02 ---
provided cell phones will be restricted to public safety, code compliance, and various
facilities maintenance staff, resulting in a savings of approximately$60,000 per year.
Even with the proposed draconian reduction in staffing, support will continue for
network infrastructure, servers, and telephone equipment. Enterprise software system
support will also continue, including maintenance of the financial, payroll, email,
backup, GIS mapping, agenda management, fleet, fuel, public safety document
management, dispatch, content management, water billing, and customer relationship
(CRM) systems.
However, the proposed cuts will result in an overall service level reduction. Desktop
support turnaround times will be increased due to the loss of two desktop support
technicians. Web posting will have to be performed by City departments, due to the loss
of the Webmaster position. Network outages may take longer to resolve. Telephone
support turnaround times will increase. Project-related tasks, such as system upgrades,
will take longer to complete.
Any further staff or operating cuts would impact the IT Department's ability to continue
to offer core systems and infrastructure support. For example, further operating budget
cuts will result in the elimination of outside support agreements for critical systems,
resulting in systems going down and not being brought back up, software issues arising
without staff being able to get help from software vendors, or state and federally
mandated reporting requirements not being fulfilled due to lack of financial software
support. Mission-critical systems would eventually fail, and the IT Department would
not have the support contracts or staffing in place to recover from such failures. This
could result in an inability to pay employees, provide dispatch services for public safety,
provide mandated financial reporting, send and receive email, protect the City's data
through backups, and more.
Table 24—Proposed Information Technology Staffing Reductions
IT Director Eliminate $214,200
Senior Network Specialist Eliminate $85,300
Telecommunications Coordinator Eliminate $72,000
IT Technician Eliminate $65,100
Senior IT Analyst(webmaster) Eliminate $126,500
IT Operations Supervisor Eliminate $105,800
Total Savings $668,900
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3. Human Resources
The Human Resources Department has three programs that impact the general Fund,
Administration,Employee Services and Workforce Planning and Retention, and two that
impact the internal service fund; Workers' Compensation and Liability & Risk
Management. In the Budgetary Analysis and Recommendation for Budget
Sustainability Plan, it was proposed that the Human Resources Department merge with
the Finance Department eliminating the need for a Human Resources director resulting
in salary savings. However, additional staffing cuts would need to be made to comply
with the 30%requested deduction.
The following proposals are recommended with the least amount of impact for the
effective customer service and compliance with legal requirement (EEO, Workers'
Compensation,FMLA, etc).
Elimination of the Human Resources Director Position -The Director position impacts
all five Human Resources programs and with the recommendation of the merger with
Finance,this will produce a salary savings of$198,397.
Elimination of the Executive Assistant Position - With the elimination of the Director
position,the need for the Executive Assistant position in unjustified. It is recommended
that this position be reclassified to a Human Resources Technician. Assuming the
reclassification is implemented,this recommendation will produce a savings of$17,680.
Elimination of the Human Resources Analyst - The duties of this position will fall to
the reclassified Human Resources Technician position recommended above. The
savings from this recommendation is$39,225.
Defer Filling the Workers' Compensation Adjuster - The employee currently holding
this position has advised the City of his resignation effective August 31, 2012. Given
the opportunity to review the duties of this position, as well as the City's legal
requirements under Workers Compensation, staff will evaluate the need to fill the
position or to seek outside contract assistance in an effort to reduce operational costs.
Over all, the recommendations above provide savings of approximately $412,683
annually. The table below provides details of the savings.
v4
Table 25—Proposed Human Resources Staffing Reductions
Human Resources Director Eliminate $198,397
Executive Assistant Eliminate $78,887
Human Resource Analyst Eliminate $100,432
Workers' Compensation Adjuster Defer $96,174
Human Resources Technician Add $(61,207)
Total Savings $412,683
4. Finance
The Finance Department responsibilities have been expanded to include the oversight of
the Human Resources and Information Technology Departments. Essentially, the
oversight of the Departments will be consolidated under the Director of Finance,
eliminating the need for two Department Heads.
Additional cost saving measures includes the elimination of three Finance Department
positions: (1) Purchasing Manager, (2) Deputy Finance Director and (3) a Financial
Analyst. Designed to improve cost containment and fiscal accountability citywide, two
positions have been added to the Finance Department,Budget Officer and Fiscal Officer.
With the elimination of the three aforementioned positions and the additional
responsibilities of Human Resources Department oversight, the Budget Officer and
Fiscal Officer will provide the City with capacity and structure to improve fiscal
management and sustain basic finance-based services during this very challenging time.
Precisely, the Budget Officer will primarily focus on the implementation of new budget
policies and practices, annual operating budget, capital improvement budgets and
provide support on grant programs. The Fiscal Officer will provide the needed oversight
for debt management,revenue development and procurement of goods and services.
S. City Manager
The City Manager's Office is responsible for implementing the policies of the Mayor
and Common Council as directed by the Mayor and implementing the Mayor's policy
directives and insuring those directives are acted upon by all supervisors and employees
in the Manager-directed departments. The City Manager is also responsible for
administering the Manager-directed departments of the City; attending all meetings of
the Mayor and Common Council and council committee meetings and participating in
discussions without vote; ensuring all laws, ordinances, orders, resolutions, contracts,
and franchises are enforced and executed; preparing and submitting the annual budget
F;
and keeping the Mayor and Common Council apprised of the City's financial condition;
and conferring with elected officials to obtain and consider advice and counsel.
A total of eleven executive, management, mid-management and clerical positions, five
call taker positions and one part-time position including the City Manager, Assistant
City Manager, Manager of Communications, Assistant to the City Manager, two
Management Analysts, Neighborhood Services Coordinator/Assistant to the City
Manager, Community Relations Supervisor/Assistant to the City Manager, Project
Manager/Assistant to the City Manager (CDBG), Executive Assistant to the City
Manager, Administrative Assistant to the City Manager, five call takers (including one
senior call taker), and one part-time Administrative Analyst that provide administrative
support to the entire department are assigned to the City Manager's Office. While
reductions will impact the ability to continue efforts to improve organizational efficiency
and effectiveness; improve communication, both internally and externally; improve
customer service; and promote private and public investment in the community, drastic
cuts are needed for the long-term financial health, viability, and sustainability of the
City.
Proposed Restructuring in the 2012-13 Budget
A critical analysis of the City Manager's Office resulted in the identification of non-
critical program areas and related staffing, which are recommended for elimination.
Specifically, the Beautification Partnership, Citizens' Academy, and public information
and community education programs would be eliminated.
Through this restructuring, three positions and funding for one position in the City
Manager's Office would be eliminated including the Neighborhood Services
Coordinator/Assistant to the City Manager, Manager of Communications, and one
Management Analyst. The Assistant City Manager position would remain in the budget,
however, funding would not be allocated at this time. It is further proposed that the
Project Manager(CDBG)position be reassigned to the Parks, Recreation &Community
Services Department to position the Department to pursue other funding opportunities
and partnerships and reduce the reliance on the City's General Fund.
Despite the reduction in personnel assigned to the City Manager's Office, through the
restructuring,the City Manager's Office would assume responsibility for redevelopment
and economic development duties, which were previously handled by the City's
Economic Development Agency. Remaining personnel would also assume
responsibility for administrative responsibilities related to neighborhood services and
environmental programs and projects that were previously handled by the Mayor's
Office.
Continuing to improve communication and building trust with residents and business
leaders in the City would continue to be a high priority. Despite the staff reduction in
the City Manager's Office, funding is included for the Call Center as an internal service
charge. Until the implementation of the Call Center in 2010, the community did not
66
have a single point of contact into the City to obtain information, to report issues or
concerns, or to request service. Callers were expected to know which department
handled the specific issue. Departments had varying policies and procedures on
answering the telephone, and in many cases, calls are not answered by a human being,
which resulted in callers not receiving timely service or simply giving up. This system
provided little to no accountability to the public to ensure complaints were resolved. In
fact, because of the lack of follow through prior to the implementation of the Call
Center, Call Center staff members are in the process of reviewing service requests from
the last three years to ensure service was provided or accurate information is provided to
the reporting party as to the status of the complaint. This formalized system for handling
customer complaints holds Department Directors and staff accountable and makes
expectations related to customer service clear.
6. Library
Article XII of the City Charter establishes the free public library system, which is
governed by a Board of Trustees appointed by the Mayor subject to the approval of the
Common Council. The Board of Trustees is responsible for making rules related to the
administration of the library; prescribe the duties of the officers; determine the number
of subordinate employees; fix salaries; purchase books,journals, publications, and other
personal property; and do all that is necessary to carry into effect the provisions of the
Charter related to the library. The Charter also provides that, at the request of the Board
of Trustees, the Council may levy a tax for the maintenance of the library and for the
purchase of books,journals, and periodicals. The City does not currently levy a library
tax.
Based on the City's financial condition and after consulting with the Board President and
Library Director, the Administration recommends the annual funding allocated to the
Library be reduced from $2.2 million to $1.6 million. While the Board of Trustees will
determine the manner in which the funds provided by the City would be allocated and
the specific impact on programs and services, it is anticipated the reduction in funding
will result in the closure of the three branch libraries. As a result of the closures,
extended hours and some additional services may be made available at the Feldhym
Library.
7. Office of the Mayor
In March 2006, the budget for the Mayor's Office was $1,049,400 with ten full-time
positions. Given the fiscal crisis facing the City, the Mayor eliminated four positions
and reduced maintenance and operations costs. Some additional contract services will
be used to reduce the impact of the cuts at a cost of$90,000, resulting in a net savings in
FY 2012-13 of$331,901. The cuts will mean the Mayor's Office will have only two
paid positions other than the Mayor including one clerical position and one analyst
position, which is a drastic reduction from the ten full-time positions that existed in
2006.
(7
F. Summary of Proposed Staffing Reductions
As addressed above, the Preliminary FY 2012-13 General Fund budget reflects $121.9 million
in revenues and $166.2 million in department proposed expenditures. The Preliminary FY
2012-13 General Fund budget represents a baseline budget,which is a continuation of the status
quo with projected increases in pension costs and other post-employment benefits, one time
equipment purchases, services and supplies needed to maintain the current level of service, as
well as the restoration of the employee concessions, many of which have expired, and does not
include Cost of Living Adjustments(COLA)or other compensation increases. As proposed,the
budget reflects a structural deficit of$45.8 million.
Through the development of the Pre-Pendency Plan, all non-essential programs and services
were evaluated. The Administration, working with the City departments, has attempted to
propose reductions in workforce or programs that have the lowest possible impact on basic
government services while beginning to take the steps needed to achieve financial solvency.
More than one hundred positions are recommended for elimination resulting in a savings of
$15.7 million. An additional savings of $6.7 million in operational savings have been
identified. While the cuts are significant, the cuts do not close the $45.8 million gap for this
fiscal year. Further, the cuts do not address the $18 million cash deficit in the last fiscal year
nor do the cuts position the City to build reserves or begin to fund the more than $300 million
in unfunded liabilities. Additional budget balancing and revenue enhancement strategies are
needed.
If the Council approves the $22.4 in measures proposed in the Pre-Pendency Plan, the deficit
for this fiscal year is projected at $16.4 million. To further close the gap, the Administration
recommends discussions with the City's various bargaining groups continue in the interim and
though the Bankruptcy. Several of the City's bargaining groups have agreed to continue the
10% concessions resulting in a cost savings of$1.5 million. The Administration recommends
seeking, or imposing if necessary, similar concessions from the bargaining groups that have not
voluntarily agreed to concessions as an interim measure, which would result in a cost savings
of$6.1 million. Further labor negotiations would occur through the Bankruptcy process. It is
also recommended elected offices, with the exception of the Mayor's Office and the City
Clerk's Office that are included in the reductions noted above, reduce the proposed budgets by
30%. This would result in a savings of$1.7 million. Given the need for increased internal
controls to protect City receipts, a reduction in the City Treasurer's Office is not recommended
at this time. Overall, approval of the additional measures would result in a savings of $9.4
million and a Fiscal Year 2012-13 General Fund deficit of$7.1 million. Exhibit B summarizes
the impact of the various budget balancing measures.
Implementation
If the Pre-Pendency Plan is approved by the Mayor and Common Council, the reduction in
force process pursuant to Civil Service Rule 511 would be immediately initiated. Layoff
notices giving at least 30 calendar days notice of separation would be issued to the affected
employees. Employees laid-off, transferred to an equivalent classification, or demoted to a
lower classification have the right pursuant to the Civil Service Rules to be reinstated to his or
her former classification upon the first vacancy in his or her department for two years.
Bumping and reinstatement rights are available only within the department.
An employee who is laid off may demote into any classification if he or she meets the
requirements outlined in the current job description, whether or not he or she has ever held a
position in the classification. An employee may laterally bump into a classification of equal
compensation if he or she has more total seniority in class than the employee currently
occupying the lateral position, provided he or she meets the requirements outlined in the
current job descriptign. An employee may demote into a lower classification even if he or she
has less seniority than the employee occupying the lower position. However, an employee
demoting into the lowest classification in the department must have more total City seniority as
a regular employee to displace an employee occupying a position in the lowest class.
While the intent is to process the lay-offs as quickly as possible due to the City's dire cash flow
issues, the lay-offs proposed as a result of contracting out services such as LMD maintenance,
tree trimming, park maintenance and custodial service would occur as soon as a contract for the
service is in place to ensure there is no disruption in service to the community.
Future Actions
While the Administration has attempted to close this year's projected $45.8 million structural
deficit, the proposed cuts are not deep enough to achieve a balanced budget for FY 2012-13,
and additional measures are required. The following are additional budget reduction and
efficiency measures:
• Contract with one or more private companies for plan check, engineering, collections, and
information technology services. The cost savings of contracting these services is currently
being evaluated and recommendations will be presented to the Mayor and Common Council.
• Initiate a Request for Proposal process for the outsourcing the City's Refuse Program. It is
proposed that a consultant be engaged to assist in valuing the City's operation, identifying
expectations, developing a comprehensive request for proposal, evaluating the responses,
negotiating a franchise agreement, and implementing the Council's direction, It is
anticipated this process could be completed in early 2013. Alternatively, an agreement for
the sale of the City's waste stream to a private company for recycling rather than disposing
of the trash at the County landfill could result in a source of revenue. This process could be
completed within two months.
• Explore the opportunities to contract with a private company or another public agency for
the operation of the City's public library system..
fig
• Evaluate the closure of the three community centers—Lytle Creek(Ward 3)Ruben Campos
(Ward 1), and Hernandez (Ward 1). The annual cost per center is approximately$132,850.
Each of the centers is heavily supported by volunteers. The Hernandez Center recently
reopened following the completion of a major construction project, and Ruben Campos is
scheduled for improvements funded by State and local grants in early 2013. The closure of
the Hernandez Center would result in the closure of the only in-door gymnasium located in a
City park as well as the aquatics program. With the proposed closure of the Ruben Campos
Center, State grant funds awarded for the construction of Pavilion, will be at risk. The
proposed closure of Lytle Creek would eliminate a center that provides significant support to
the surrounding community.
• Evaluate the termination of the agreement with the Boys and Girls Club,which would result
in a cost savings of$85,000 per year, for the programming of the Delmann Heights Center.
Unlike the community centers that are solely operated by recreation staff, Delmann Heights
is open Monday through Friday. At its peak attendance, Delmann Heights averaged
approximately 1,400 participants per month. More recently, the Center averages
approximately 200 participants per month. The termination of the agreement and the
resulting closure of the City portion of the center may create safety and blight issues that
may also impact the County Head start program directly adjacent to the center. Further
partnership opportunities may exist that would allow for the continuation of operations at the
site, with revenue potential ranging from $35,000 to$70,000 annually. If that were to occur,
it is recommended that the Boys and Girls Club consolidate their operations at the 9th Street
location as they remain a viable community partner.
• Evaluate the closure of the Verdemont Center (Ward 5). Like other centers, this center
provides significant support to the surrounding neighborhood.
• Evaluate the closure of the Senior Centers—5th Street Senior Center(Ward 1)and the Perris
Hill Senior Center(Ward 2)-which provide congregate meals, the Retired Senior Volunteer
Program, Senior Companion Programs, and others. About $588,378 in grant revenue is
received by the City for these programs. There is also a General Fund obligation of
$251,400. Closure of the senior centers would result in the eliminate one Recreation
Coordinator position, one Recreation Program Supervisor, one Program Manager and
several part-time employees resulting an annual cost savings of $251,400. The closure
would have a significant impact to the seniors and may result in a loss of future grant
funding and a degradation of senior services,programs and activities.
• Evaluate the closure of Pioneer Cemetery as the cemetery is reaching capacity and the
Cemetery fund faces declining revenues and an increasing General fund subsidy. Two
positions are funded by the Cemetery fund and any closure would result in the elimination of
the funding, resulting in a funding shift or elimination of the positions. Perpetual care is still
required of this facility, which will be linked to park maintenance. Total savings to the
Cemetery Fund as a result of the elimination of the two positions is $116,000 per year.
According to the Historical Society, the Pioneer Cemetery has never been maintained at a
higher level; however, without the ability to expand the current site, opportunities to sell the
site to a private operator are limited and confined to"caretaking/servicing of pre-needs".
It is also recommended the Mayor and Common Council review and consider the various
revenue enhancement strategies, which have been presented previously, and identify strategies
70
for further consideration. While the implementation of new measures would not have an
immediate impact on the City's financial condition, new sources of revenue are needed for the
City's long-term fiscal health.
71
APPENDIX A — SUMMARY OF REVENUES, EXPENDrrURES AND
CHANGES IN FUND BALANCE (General Fund)
CITY OF SAN BERNARDINO,CALIFORNIA
Summary of Revenues, Expenditures,and Changes in Fund Balance
General Fund
PROPOSED
2010-11 E-PENDENCY
Unaudited PLAN BUDGET %
Actueh FY 2012-13 $Inc/(Dec) Inc/(Dec)
Revenues:
Property Taxes 26,373,217 26,096,688 26,867,362 26,867,362 - 0.00%
Other Taxes 58,462,657 60,737,290 62,908,081 62,908,081 - 0.00%
Ucenses&Permits 7,910,202 9,172,900 9,441,900 9,441,900 - 0.00%
Fines and Penalties 2,283,426 1,811,800 2,104,300 2,104,300 - 0.00%
Use of Money&Property 3,156,270 733,000 733,000 733,000 - 0.00%
Intergovernmental 13,481,247 10,583,888 7,297,722 8,797,722 1,500,000 20.55%
Charges for Services 7,319,098 6,854,823 6,898,400 6,898,400 - 0.00%
Miscellaneous 4,627,935 4,101,750 4,173,400 4,173,400 O.DD%
Total Revenues 123,614,051 120,092,139 120,424,165 121,924,165 1,500,000 1.2s%
Expenditures:
Mayor 644,437 819,900 931,715 599,815 (331,901) -35.62%
Common Council 459,440 681,700 705,650 705,650 0 0.00%
City Clerk 1,507,051 2,497,815 1,720,468 1,135,333 (585,135) -34.01%
City Treasurer 202,524 210,400 226,066 224,866 (1,200) -0.53%
City Attorney 4,095,525 4,441,850 4,959,606 4,959,606 0 0.00%
General Government 2,265,929 4,904,500 21,355,965 16,620,585 (4,735,380) -22.17%
City Manager 1,179,586 1,282,000 1,485,318 1,112,593 (372,725) -25.09%
Civil Service 286,522 356,400 411,275 406,275 (5,000) -1.22%
Human Resources 508,371 614,300 778,433 521,524 (256,909) -33.00%
Finance 1,902,878 1,895,185 1,801,097 1,682,756 (118,341) -6.57%
Community Development 6,275,707 5,474,300 7,951,225 5,951,626 (1,999,599) -25.15%
Fire 33,506,873 36,339,485 39,123,792 33,253,038 (5,870,754) -15.01%
Police 63,573,080 65,106,500 67,63%580 62,166,248 (5,464,332) -8.08%
Parks,Rec.&Com.Svc. 5,067,528 4,894,000 5,425,725 4,649,973 (775,752) -14.30%
Debt Service 4,102,847 1,758,500 1,758,500 1,758,500 - 0.00%
Public Works 8,005,331 8,489,900 9,971,142 8,118,371 (1,852,771) -18.58%
Total Expenditures 133,583,628 139,766,735 166,236,557 143,866,758 (22,369,799) -13.46%
Excess of Revenues Over
(Under)Expenditures 19,969,577) (19,674,596) (45,812,392) (21,942,593) 23,869,799
Operating Transfers In:
Gas Tax Fund 3,620,000 3,620,000 3,620,000 -
Traffic Safety - 11200,000 1,400,000 1,400,000 -
1/2 Cent Sales/Road Tax 1,200,000 1,200,000 1,200,000 -
Cultural Development Fund 357,000 357,000 357,000 -
Storm Drain Fund 132,700 - - -
Refuse Fund 3,721,800 - - -
General Liability Fund 2,000,000 - -
Sewer Line Maim.&Constr.Fund 1,735,900 700,000 700,000 -
CFD1033-Fire Station Fund 585,600 585,600 585,600
Air Quality Fund-AB2766 70,000 70,000 70,000 -
Total Op Trans In 13,023,914 14,961,100 7,932,600 7,932,600
Operating Transfers(Out):
Animal Control Fund (383,300) (816,000) (745,900) 70,100
Library Fund (2,131,800) (2,221,958) (1,600,000) 621,958
LMD's (200,000) - - -
Refuse Fund-Street Sweeping (65,000) (65,000) (65,000)
Total Op Trans Out (4,646,233) (2,780,100) (3,102,958) (2,410,900) 692,058
Total Net Operating Transfers
In/(Out) 8,377,681 12,181,000 4,829,642 5,521,700 692,058
Excess of Revenues Over
(Under)Expenditures and
Operating Transfers In/Out (1,591,896) (7,493,5%) (40,982,750) (16,420,893) 24,561,857
8/23/2012
1 OF 1
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND - 001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Prnjecled OPERATING PROPOSED PRE- %Inc/
Account Number Description Amount Ending Budget BUDGET PENDENCY PLAN j Inc/(Dec) (Dec)
Department: MAYOR
salaries
5011 Salaries PerMfullOme 353,241 424,500 514,400 225,861 (288,54D) 56.1%
5013 Automobile allmance 1,650 6,900 6,900 6,900
5014 Salaries terry/w t me 29,750 - - -
5015 0l me 665 - - -
Tob1:5alaries 385306 431.400 521.300 232-761 (288.5401 -66.9%
BtlraOta
5026 PERS retirement 76,244 102,300 123,834 51,398 (72,436) -58.5%
5027 Hwb and Me inwrance 58,700 73,300 76,300 31,800 (44,500) -58.3%
5028 Unemploymentinwrance 910 1,400 1,500 600 (900) -60.0%
5029 Medicare 5,717 6,400 7,500 3,400 (4,100) -54.7%
Total:Benefits 141.632 183.400 209.134 67.198 (12,9361 -66.5%
Total:Salaries 6 benefits 526.938 614.800 73DA34 319.959 (410,476) -66.8%
Mainterance and Operations
5031 MOU Concession -
5111 Material and supplies 11,018 15,000 15,000 13,000 (2,000) -13.3%
5122 Dues and subscriptions 1,507 2,000 2,000 2,000
5131 Mileage 73 500 500 500
5132 Meetings and conferences 17,827 25,000 25,000 18,000 (7,000) -28.0%
5133 Education and training 728 3,000 3,000 2,000 (11000) -33.3%
5172 Equipment maintenance - 1,000 1,000 1,000
5174 Printing charges 21820 4,000 4,000 4,000
5175 Postage 6,164 5,000 5,000 5,000
5176 Cagy m chin,charges 6,682 11,500 11,500 10,500 (11000) 41.7%
5185 avic and prom000nal 1,468 10,000 10,000 9,575 (425) 4.3%
5193 Gram match (SO) 4,500 4,500 4,500
Total:Maintenance and Operations 48,237 air= 81,500 70,075 (I17i25) -14.0%
Contract Services
5502 ProfessionaVcontractual services 33,345 13,700 - 90,000 90,000 #Dly/01
5505 Ode,professmnal services 117
Total:Contractual Services 33,462 14700 90,000 90,000 #DN/01
Internal Service Charges
5601 Garage charges 2,000 1,300 200 200
5602 Worlren compensation 6,500 4,600 7,225 7,225
5603 Liability 4,900 4,000 4,000 4,000
5604 IT charges in-house 16,900 6500 73,062 73,062
5605 Tekdl support 4,700 11,400 13,194 13,194
5606 Electric - 22,ODO 22,000 22,000
5612 Fleet charges-fuel 800 BID 100 100
Total:Internal Service Charges 35AW 109,900 119,781 119,781 0.0%
Capitol Outlay
5703 Communication equipment - -
Total:Capital Outlay - kDN/01
Credit/billables
5910 tra4H-federal and state program fund)
Total:Credit/billables - - kDN/01
Total:Nan-Personnel Expenses 117,499 200,100 201,281 279AW 7WS 39.0%
Departm nt Total:Mayor 644,437 819,900 93,715 599,815 (331,901) 35.6%
8/23/2012
CITY OF SAN BERNAR INO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- %Inc/
Account Number Description Amount Ending Budget BUDGET PENDENCY PLAN
$Inc/(Dec) (Dec)
Department: COMMON COUNCIL
Salaries
5011 Salaries perMfulNme 193,202 223,100 292,300 292,300
5013 Aulanobile alMvance M,000 48,300 48,300 48,300
5014 Salaries temp/partOme 17,668 26,200 26,200 26,200
Total:Solari. 254,870 297,600 366,80(1 366,1100 0.091
Benefit,
5026 PERS retirement 40,880 56,500 74,113 74,113 (0) 0.0%
5027 Health and life insurance 97,693 123,21)0 119,900 119,900
5028 UrRrnpbyment insurance 622 600 900 900
5029 Medicare 3,723 3,900 4,9D0 4,800
Total:Benefits 144918 184,200 199,713 199,713 (0) 0.0%
Total:Abries k beNfits 397.78) 491" 566.513 566,513 f01 0.0%
Maintenance and Operative
5031 MOU concession - _
5111 Material and wpgies 6,621 15,372 7,600 7,600
5112 Small tools and equiprent - - _ -
5122 Dues and subscriptions 202 200 200 200
5142 Meebrgs ark confeences-Ward 1 952 4,890 3,700 3,700
5143 Meetings and conferences-Ward 2 2,245 16,439 3,700 3,700
51" Meetings and conferences-Ward 3 275 20,107 3,700 3,700
5145 Meetings and conferences-Ward 4 328 10,657 3,700 3,700
5146 Meetings and talfererass-Ward 5 4,071 61M2 3,700 3,700
5147 Meetings and conferences-Ward 6 2,136 16,806 3,700 3,700
5148 Meebrgs and conferences-Ward 7 60 8,487 3,700 3,700
5172 Egdprrent maintenance 71 400 400 400
5174 Printing charges 250 1,000 1,000 1,000
5175 Postage 7,022 BDO 800 800
5176 Cop/machine charges 8,715 6,200 6,200 6,200
5186 @dc and pmmobonel 599 1,100 1,100 1,100
Total:Maintenance and Operatic. 33,546 108,900 43,200 43,200 - 0.0%
Internal Sen oe Charges
5601 Garage charges 100 200 200 200
5602 Workers compensation 1,300 3,700 3,825 3,625
5603 Liability 7,800 7,600 7,800 7,800
5604 It tlwn/rs in-house 7,700 51,800 56,694 56,694
5605 Telephone support 8,400 91500 9,418 9,418
5606 Electric - 17,600 17,600 17,600
5612 Fleet chaW-fuel 500 400 400 400
Capital Outlay Total:Internal Service Chary. 25.800 9L000 95.9_37 95.937 0.0%
_
5704 Miscellaneous equipment 2,306
Total:Copihl Outlay 2,306 _ _ = FDIV/01
Total:Non-Pesonnel Expenses 61,652 199,900 139,137 139,137 0.0%
Department Total:Cannon Coandl 459240 681.]00 709.600 705,650 (0) 0.0%
8/23/2012
TTY OF SAN BERNARDIN ,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND- 001
FY2012-13
PRELIMINARY M012-13
2011 Actual 2012 Projac6ed OPEMnNG PROPOSED PRE- %Inc/
Account Number Oescrip0on Amount Ending Budget BUDGET PENDENCY PUN $Inc/(OM) (Dec)
Department: CITY CLERK
Salaries
5011 Salaries pernyfulfik a 806,908 823,000 959,500 522,400 (437,100) 45.6%
5013 Ai tom tde alloaance 6,600 6,800 6,900 6,900
5014 Salaries temp/parttlme 33,371 36,900 36,900 36,900
Total:Salaries 846,679 866,700 1,003,300 566,200 (437,100) -43.6%
Benefits
5026 PERS retirement 169,990 202,400 225,833 121,598 (104,235) 46.2%
5027 Heafth and life insurance 186,068 179,200 174,400 87,200 (87,200) -50.0%
5028 UnempluymnR insurance 2,165 2,300 2,900 1,600 (1,300) 44.8%
5029 Medicare 10,559 12,000 14,100 7,800 (6,300) 44.7%
Total:Benefits 364782 395,900 417,233 219,196 (1991035) 47.7%
Total:Salaries 60ene0O 1,215,661 1,262,600 1,420,533 784,398 (636,135) M.9%
Mal Neerace and Operations
5030 PERS Oak - - -
5031 MOU concession - - -
Sill Material and supplies 5,858 9,200 8,200 8,200
5112 Small tools oral equipnent 380 2,400 1,500 1,500
5121 Adverbshg 4,259 4,900 4,400 4,400
5122 Dues anal subscriptions 1,128 1,815 1,500 1,500
5132 Meetings and cWererces 1,760 2,600 3,500 3,500
5133 Education and training - 620 1,000 1,000
5171 Rentals - - - -
5172 Equipment maintenance - - -
5174 Printing charges 10,926 15,930 15,750 15,750
5175 Postage 41,438 46,450 46,550 36,550 (10,000) -21.5%
5176 Copy machine dharges 6,081 8,800 8,800 8,800
5181 Ogler operating expenses 4,117 5,100 5,000 5,000
5183 Management allowance - 200 200 200
Total:Maintaerce and Operations 75,948 W15 96,400 86,400 (101000) -10.2%
Contrast Smrices -
5502 ProtessionavcontracLel s es 63,786 935,900 3,600 100,600 97,000 2694.4%
5505 Other pmfelhWhal sen4ces 46,476 62,000 62,000 26,000 (36,000) -58.1%
Total:r,....ractual Services 110,262 997,900 65,600 126,600 61,000 6.1%
Internal Service Charges -
5601 Garage charges 400 200 300 300
5602 Workers ornpensabon 7,900 6,100 9,300 9,300
5603 Wbillty 3,100 3,000 3,100 3,100
5604 IT Charges m4rouse 90,200 100,100 96,220 96,220
5605 Telephone support 2,700 6,600 6,715 6,715
5606 Ekabic - 22,100 22,100 22,100
5612 Fleet charges-fuel 500 500 20D 200
Total:Into"Service Charges 104.BIq 13&600 137.935 137.935 0.0%
Capital OMMY
5702 Computer alulpirent 380 700
Total:Capital Outlay 380 700 100.0%
Total:Nan-P& and Expenses 291,390 1,235,215 299,935 35,935 SIAN 0.194
Oeparboent Total:City Clerk 1,507,051 2,497,815 1,720,468 1,135,333 (585,135) -23.4%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
FY2012-13
PRELIMINARY PY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- %Inc/
Account Number Description Arsrount EMin00udget BUDGET PENDENCY PLAN 6 Inc/(Dec) (Dec)
Department: CITY TREASURER
Salaries
5011 Salanes perm/lullbma 112,506 110,100 124,100 124,666 5% 0.5%
5013 Automobile allDmnce 6,600 6,900 6,900 6,900
Total:Salaries 119,106 117,000 131,000 131,566 566 0.5%
Benefits
5026 PERS retremet 24,030 27,900 30,900 30,900
5027 HeaM aM life insuance 39,200 33,600 32,700 32,700
5028 Unemploymet,insurance 266 400 400 400
5029 Medicare 959 1,700 1,900 1,900
TON:BeneO[s 60.455 63.600 65.90D 65.900 0.0%
Total:Salaries&benefits 183,561 180,600 196,900 197AN S66 0.3%
Mainterance and Operations -
5031 MOU conoession - - -
5111 Material aM supplies 995 1,100 1,100 1,100
5112 Sm a tools and egtiyrent - 300 300 300
5122 Dues arid subschpbons 756 1,300 1,300 1,000 (300) -23.1%
5132 Meetings and mnfeences 1,273 2,700 2,700 2,700
5171 Rentals - - -
5172 Equipmed maintenance 4,155 4,500 5,066 4,000 (1,066) -21.0%
5174 Pnrrong charges 39 300 300 300
5175 Postage - 35 200 200 200
5176 Cop/ftechine changes 1,092 900 900 900
Total:Maintenance and Operations 8,345 14300 11,866 10,500 (1,366) -121%
Contract Semites -
5502 Professiaal/cantractual services 3,119 4,400 4,400 4,000 (400) -9.1%
Total:Contractual Services 3,119 4,4011 IpOD 4,000 (400) -9.1%
Internal Service Charges -
5602 Workers compensabon 1,400 2,100 900 900
5603 Mobility 1,000 11000 1,000 1,000
5604 IT Charge in-house 5,000 - - -
5605 Telephone support 100 - - -
5606 Elatrk - 11,DOO 11,000 11,000
Toth:Internal service Charges 7,500 14,100 12500 12,900 0.0%
Total:Non-Personnel Expenses 18,963 29,800 29,166 27,400 (1,766) -5.9%
Departinerrt Total:City Treasurer 202,524 210,400 226,066 224,866 (1,200) -0.6%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 projected OMMnNG PROPOSED PRE- %inch
Account Number Description Amount Ending Budget BUDGET PENDENCY PLAN ;Inc/(Dec) (Dec)
Department: CITY ATTORNEY
Salaries
5011 Salaries mrrrVfulBime 1,884,727 1,776,200 1,933,400 1,933,400
5013 Aumrnobile allowance 6,600 6,900 6,900 6,900
5014 SalarimtemplortOme 173,558 173,000 265,160 265,160
5015 Overtime 6,554 7,100 7,100 7,100
Total:Salaries 2,071,439 1,963,200 Z21ZSSD 2,212,560 - 0.0%
Benefits
5026 PERS rebremern 339,343 447,500 456,430 456,430
5027 Heats aM life insurance 215,288 229,400 207,100 207,100
5028 Unemployment insurance 5,728 5,100 6,100 6,100
5029 Medlaa 30,225 26,000 28,200 28,200
Total:Benefits 590,583 708,000 697,M 697,830 - 0.0%
Total:Salaries 8 bereRls 2,662,022 2,671,200 2,910,390 2,910,390 0.0%
Maintenance and Dampers -
5031 MOU concession - - _ -
5111 Material ant supplies 17,321 11,907 16,000 16,000
5112 Small tools ant equlpmenl 6,768 3,D07 4,400 4,400
5121 Arverteing 2,485 51800 4,300 4,300
5122 Dues and subscriptions 11,576 6,863 14,000 14,000
5123 Library boola 70,769 66,976 75,000 75,000
5131 Mileage - 1,000 300 300
5132 Meetings ant conferences 1,469 3,600 3,000 3,000
5133 Education and training 1,185 7,272 10,500 10,500
5152 Gas dances - - _ -
5171 Reripls 8,490 8,318 6,300 6,300
5172 EOuiKert maintenance 4,106 3,457 9,000 9,000
5174 Printing charges (351) 4,1M 6,000 6,000
5175 Postage 8,566 61882 7,101) 7,100
5176 Copy machine Charges 8,060 7,134 11,100 11,100
5177 lAgation Oversees 262,890 475,329 421,376 421,376
5183 Marageernern allowance 474 593 600 600
Total:Wintarrarrce and Operations 403,808 613,004 588,976 508,976 - 0.0%
C;onb Service
5502 ProfessionaNmntractral servka 5,539 18,927 25,727 25,727
5503 Litigation-outside attorneys 982,137 1,048,165 1,345,376 1,345,376
5505 Oder professional senam 420 454 454 454
Total:Contractual Sevice 988,095 1,067,546 1,371,557 1,371,557 0.0%
lntemal Service Charge
5601 Garage oterges 2,200 5,100 5,253 5,253
5602 Workers compensation 12,400 11,500 11,845 11,845
5603 Oabllily 9,900 9,800 10,094 10,094
56D4 IT charges m4douse 7,4130 23,70D 24,411 24,411
5605 Telephone support 4,700 8,400 8,652 8,652
5606 Eiec6ic - 22,100 22,763 22,763
5612 Fleet charges fuel 5,000 51500 5,665 5,665
Total:Internet Service Charges 41,600 86,100 Balm Bill 0.0%
Capital Outlay
5702 Computer equipment: - 2,500 -
5704 Misallarms Nuipmerd - 700
Total:Capital Outlay - 3,200 - - - 0.0%
Debt Service
5803 lease payment _ -
Total:DebtSevice #DN/OI
Total:Nan-Per..W Expenses 1,433,503 1,770,650 2,049,21fi 2,049,216 - 0.0%
DepaMrent Total:City Attorney 4,095,525 4,441,850 4,959,606 4,959,605 0.0%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- %Inc/
Account Number Description Amount Ending Budget BUDGET PENDENCY PLAN S Inc/(Dec) (Dec)
Department: GENERAL GOVERNMENT & DEBT SERVICE
Personnel
Salaries
5. PARS 31,991 160,800 500,000 500,000
5015 Overtime 30,819
Total:Salaries 62,809 160,800 500,000 500,000 - 0.0%
0dw
5024 PERS retirees hea8h 498,906 600,000 6,658,000 625,000 (6,033,000) 90.b%
WORK COPM WORKERS COMP UNFUNDED PORTION 249 - 3,269,239 3,269,239
GEN LIABOITY GEN LIABILITY CLAIMS 2,735 - 4,920,071 4,920,071
CASHOUTS CASHOUTS-HISTORICAL AVERAGE 576 - 3,453,175 3,453,175
Other -
Total: Other 452,466 600,000 18,300,485 12,267,485 (6,633,000) -1005.5%
Total:Salaries&benefits 515,275 760,800 18,000;18.5 12,767,465 (6,033,01)(0) -793.0%
Maintenance and Operations
5030 PERS aedd - - - -
5031 MOU Concession - - -
5032 Reim rsed nonhezEh benefit (24,885) - -
5111 Material and wpplies 8,983 5,000 5,000 2,500 (2,500) -50.0%
5122 Dues and subscriptions 124,861 125,000 125,000 115,000 (101000) -8.0%
5133 Edurabon and training 3,245 - - -
5174 Printing charges 4,349 7,000 7,000 5,000 (2,ODO) -28.6%
5175 Postage 1,157 - - -
5184 Lax inane rebates 836 1,000 1,000 1,0DO
5185 Fine art funding 133,500 133,500 133,500 133,500
5186 CIVIC and promotional 166,462 223,500 223,500 100,000 (123,500) -55.3%
Total:Maintenance and Operations 418,508 495,000 495,000 357400 (38,000) -27.9%
Contnwt Services
5502 Professional/contra lservices 1,129,446 3,448,700 1,2 96,100 1,296,100
Yadws Phone sviah and network innashuctun - - 564,380 - (564,380) -100.0%
5505 Ober professional services 202,700 200,000 200,000 2,200,000 2,000,000 1000.0%
Total:Contractual Services 1,332,146 3,648,700 21060(80 3,496,100 1435,620 393%
Debt Service
5803 Lease payments 2,071,832 1,758,500 1,758,500 1,758,500
Total:Debt Service 2,071,832 1,758,500 1,754500 1,758,500 - 0.0-A
Total:non-Personnel Expenses 1,750,654 4,143,700 2,555,480 3,853,100 1,297,620 317/.
Department Total:General Government 2,265,929 4,906,500 21,355,965 16,620,585 (4,735,380) -96.6%
Deparbnent Total:Debt Service 4,102,847 1,758,500 1,758,500 1,758,500 - D.0%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND -001
FY2012-13
PRELIMINARY N2012-13
2011,0 ual 2012 Projected OPERATING PROPOSED PRE- %Int/
Account Number Description Amount Ending Budget BODGET PENDENCY PLAN f Inc/(Dec:) (Det)
Department: CITY MANAGER
Personnel
Salaries
5011 Salaries perm/fulibme 825,992 848,000 1,002,986 735,971 (267,015) -26.6%
5012 Special miares - (53,600) 11,040 11,D40
5013 Autmwble albwance 17,370 19,500 18,555 13,455 (5,100) -27.5%
5018 Vacation pay 13,882 - - -
Total:SaWtea 857,245 814.000 L03LSB1 76OA66 f27L115) -334%
BeneOts
5024 PERS retirees heAM - - -
5026 PERS retirement 156,977 217,100 200,123 151,113 (49,010) -24.5%
5027 Hearth ant life insurance 81,239 89,600 91,233 58,533 (32,700) -35.8%
5028 Unempbymentinwrance 2,462 2,600 2,973 2,173 (800) -26.9%
5029 Medicare 11,938 12,800 14,865 10,765 (4,100) -27.69b
Total:Benefits 2536616 327,100 309,194 227,586 (86,610) -26.9%
Total:Salaries 6 benefits 1,109,861 1,136,100 1,361,775 983,050 (358,775) -3L6%
Maintenance and Operations - -
5111 Material arM supplies 4,370 4,500 4,500 3,500 (11000) -22.2%
5121 Acwrbsing - - - -
5122 Dues ant wbsmpbors 4,377 6,000 6,000 3,000 (3,000) -50.0%
5132 Meetings and confen:nm 13,393 10,500 10,500 7,500 (3,000) -28.6%
5133 Education and training 392 500 500 500
5174 Printing charges 5,345 5,000 5,000 4,000 (11000) -20.0%
5175 Postage 633 500 500 500
5176 CoV/machine charges 3,914 6,000 6,000 6,000
5181 Other operating expenses 3,741 1,000 1,000 1,000
5182 Bad debh/unarIectible accounts - - -
5183 Management albwance - 600 600 600
5184 Low income rebates - -
5199 D lue:wt.n expense
Total:Maintenance and Operations 36,165 34,600 34AW 26,600 (81000) -23.1%
Contract 5ww. - -
5502 Professional/mntraMal services 2,560 6.000 6,000 (6,000) -100.0%
Total:Contactual Services 2,560 6,000 6,000 - (6,000) -100.0%
Internal Service Cheges - -
5601 Garage changes 400 - - -
5602 Woftm mmpersabon 3,800 4,700 7,625 7,625
5603 Liability 7,300 7,300 7,300 7,300
5604 n deryes in-house 16,800 65,700 61,254 61,254
5605 Telephone wpport 2,600 5,600 4,764 4,764
5606 Electrk - 22,000 22,000 22,000
5612 Fleet tlurges-fuel 100 - -
Total:IntenalServiceCharges 31,000 105,300 10;963 10 2,943 - 0.0%
7451 Tmmfivrs out
Total:Transfers Out - - - - - #DN 101
Total:Non-Personnel Expenses 69,725 145,900 143,543 1291 (14,000) -9.6%
DeparlInnant Teel:City Manager 1,179,586 1,282,000 1,485,318 1,113,593 (372,725) -29.1%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- %e Inc/
Account Number Description Amount Ending Budge[ BUDGET PENDENCY PLAN $Inc/(Dec) (Dec)
Department: HUMAN RESOURCES
Pe acnind
Salaris
5011 Salaries perrn/fulitime 303,119 308,200 433,250 268,940 (164,310) -37.9%
5012 Special salaries - - - -
5013 Autorr 60 4,200 4,140 - (4,140) -100.0%
5014 Salaries terrp/parttime 32,757 20,000 20,000 20,000
5015 Ovrtime 24 - - -
S016 Force account labor - - - -
5018 Vacation pay - - -
Tdal:Salaries 339,860 332.400 457,390 288,940 (168,450) -50.7%
Banralila
5024 PERS retirees healM - - - -
5026 PERS retirement 64,680 77,800 105,865 61,136 (41,729) -39.4%
5027 Health and life insurance 40,106 47,000 52,270 33,240 (19,030) -36.4%
5028 Uremployrrent insurance 1,021 1,000 1,220 660 (560) 15.9%
5029 Medicare 3,810 4,600 6,360 3,920 (2,440) -38.4%
Total:Benerts 109,618 130,400 165,715 101,956 (63,759) 48.9%
Total:Salaries 6 benefits 449,478 462,800 621,105 390,8% (232,209) -50.2%
Maintenance and Operations -
5030 PERS med8 - - - -
5031 MOU mrcrssion - - - -
SD32 Reimbursed nonheafth benefit - - -
5111 Material and supplies 2,965 3,800 4,300 2,800 (1,500) -34.9%
5112 Small tools and equipment - - - -
5113 Motor fuel an!lubricants - - - -
5114 Raw foods - - - -
5120 Media expense - - - -
5121 Adv isirg 200 8,0DO 7,000 3,500 (3,500) -50.D%
5122 Dues and subscriptions 2,281 2,900 3,700 3,000 (700) -18.9%
5123 library books - - - -
5129 Street sweepers LP - - -
5131 Mileage - - - -
5132 Meetings and mMerenos - 2,400 2,400 1,200 (1,200) -50.D%
5133 Education and Inuring 21489 3,800 3,700 2,000 (1,700) 45.9%
5172 Equipmat mainlerence 128 500 50D 500
5173 Outside vehicle mairdenance - - - -
5174 Printing charges 1,654 6,200 6,000 2,000 (4,ODO) -66.7%
5175 Postage 1,129 2,000 2,000 1,000 (11000) -50.0%
5176 Copy machine charges 1,773 2,500 2,500 2,000 (500) -20.0%
5183 Management allowance 103 EDO 600 - (600) -100.0%
5199 Depreciation expense - -
Total:Maintenance and Operations 12,722 32,700 32,700 18,000 (14,700) -45.0%
Contract SerYgs - -
5505 Other professional services 19,970 10,000 10,000 - (10,OOD) -100.0%
5506 landscape contracts - - - -
5507 FaclBes semces - - - -
Total:contractual Services 19,970 10.000 10,000 - (10,000) -100.0%
Internal Senlce Charges - -
5601 Garage Charges - - - -
5602 Workers compensation 3,000 5,20 2,585 2,585
5603 Liability 9,000 7,100 7,100 7,100
5604 IT charges in-liouse 9,000 64,800 71,865 71,865
5605 Telephone support 5,200 9,700 9,078 9,078
5606 Electric 22.000 22.000 22.000
Total:Inbemal Service Charges 26,200 108,800 112,678 112,628 0.0%
Total:Non-Pensoncel Expenses 58,893 151,500 155,328 130,62B (24,700) -16.3%
Department Total:Human Resources 508,371 614,300 778,433 521,524 (296,909) -41A%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND - 001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Projected! OPERATING PROPOSED PRE- %Inc/
Account Number Description Amount Ending Budget BUDGET PENDENCY PLAN ;Inc/(Dec) (Dec)
Department: FINANCE
Personnel
Salaries
5011 Salaries perm/fullbme 950,192 1,039,900 1,D97,151 1,019,189 (77,962) -7.1%
5012 Specal salaries 1,800 1,800 1,740 1,680 (60) -3.4%
SD13 Automobile allowance 10,698 12,100 11,643 6,543 (51100) 432%
5014 Salaries temp/parttime 29,820 50,DD0 -
5015 Overtime 1,471 500 - -
5016 Farce account labor - - - -
5018 Vacation pay 3,766 -
ToIal:Salarta 997,746 1,101,300 1,110,534 1,027,412 (83,122) -7.5%
nowift
5024 PERS recrceS hexNt - - -
S026 PERS retlremem 203,414 257,000 252,668 229,702 (22,966) -9.1%
5027 Health and life insurance 126,990 145,300 139,129 127,639 (11,490) -8.3%
5028 Unempbynent insurance 2,997 3,200 3,372 3,397 25 0.7%
5029 Medicare 11,357 15,200 16,349 15,561 (788) 4.8%
Total:Benefits 344,758 420,700 411,518 376,2g9 (35,219) -8.4%
Total:Salaries&benefits 1,342,504 1,525,000 1,522,052 1,403,711 (114341) -7b%
Kid nice and Operations
5111 Material and supplies 9,326 9,600 9,600 9,600
5112 Small tons and equipment 285 2,000 2,000 2,000
5121 Advertising 2,897 2,600 2,600 2,600
5122 Dues and sulascriptions 2,329 2,300 2,300 2,300
5132 Meetings and conferences 1,808 5,800 5,800 5,800
5133 Education and training - 200 200 200
5171 Rental - - - -
5172 Equipment maintenance 472 600 600 600
5173 Outside vehicle rnointenairce - - - -
5174 Printing charges 2,580 9,400 9,400 9,40D
5175 Postage 6,006 8,185 8,200 8,200
5176 Cop/machine charges 4,521 4,500 4,500 4,500
5181 Other operating expenses - - - -
5182 Bad debs/unmllectine accounts - - - -
5199 Deprecation expense - - - -
Tofal:MaintarancearMOperations 30,225 45,185 45,200 45,200 - 0.0%
Contract Service
5502 ProfessionaVoontractual wwces - 1,000 1,000 1,000
5503 litigation-outside attorneys - - -
5504 Construction - - - -
5505 Other professional services 3,349 13,100 1,000 1,000
5506 landscape contracts -
5507 Facilities services -
Total:Contractual Services 3,349 10.100 2,000 2,000 0.0%
Internal Service Charges
5601 Garage charges - - - -
5602 Workers compensation 12,000 8,700 12,700 12,700
5603 Ilabillty 9,000 9,000 9,000 9,000
5604 IT charges irMOuse 504,600 264,900 181,660 181,660
5605 Telephone support 1,200 5,600 6,485 6,485
5606 Electric - 22,000 22,000 22,000
5611 Fleet charges-lease paymerts - - - -
5612 Fleet charges-fuel - - - -
Total:InternalService Charges 52GAN 310,200 231,84.5 231,895 - 0.0%
Capital Outlay
5702 Computer equipment - 700 - -
5720 land
Total:Capital Outlay - 700
7451 Transfers sat - -
Tobl:Transfers Out - - - -
Tolal:Non-Personnel Experses 560,374 370,185 279,045 279,045 - 0.0%
Department Total:Finance 1,902,878 1,895,185 1,801,097 1,682,756 (118,341) -6.2%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
tY201i-13
PRELIMINARY FY20II-13
2011 Actual 3012 Projected OPERATING PROPOSED PRE- %Inc/
Account Number Description A.M Ending Budget BUDGET PENDENCY PLAN $Inc/(Dec) (Dec)
Department: CIVIL SERVICE
Personnel
Salaries
SOil Salaries perm/fulitme 198,773 199,100 233,870 233,870
5012 Special salaries - - - -
5013 Autornoblle allowance 6,600 6,900 6,900 6,900
5014 Salaries temp/parttlme - - - -
5015 Overtime
5016 Ibrce account labor - - - -
5018 Vacation pay
TOW:Salaries 205,373 206,000 240,770 240,770 - 0.0%
BehMlts
5024 PERS retirees heath - - -
5026 PERS retiremnt 42,431 50,200 55,900 55,900
5027 Heath and life insurance 20,288 28,500 27,700 27,700
5028 Unetrployment insurance 616 600 600 600
5029 Medicare 2,118 3,100 3,400 3,400
Total:Benefits 65A53 02ADD 87,500 87,500 0.0%
Total:Salaries&benefits 270,826 29BAN 3286370 328,370 - 0.0%
Maintenance and Operations - -
5030 PERS credit - - -
5031 MOU concession - - -
5032 Reimbursed nonheath benefit - - - -
5111 Material and slpplies 302 2,600 1,250 1,250
5112 Small tools and equipment 1,670 400 200 200
5122 Dues and subscriptions - - 1,850 1,850
5132 Meetings and conferences - 150 - -
5172 Equipment maintenance 174 200 200 200
5173 Outside vehicle maintenance - - - -
5174 Minting changes 22 100 100 100
5175 Postage 466 640 400 400
5176 Copy machine charges 2,063 2,110 2,200 2,200
5177 Litigation expenses - - - -
5199 Depreclabon expense - - - -
Total:Maintenance and Operations 4,696 6,200 6,200 6,200 0.0%
Contract Services
5502 Professional/mnfractual services - - -
Intel:Co itractwl Services - - ADIV/01
Internal Service Charges - -
5601 Garage charges - - - -
5602 workers compensation 2,000 1,100 1,875 1,875
5603 liability 2,000 2,000 2,000 2,000
5669 Tf charges in-house 6,800 55,200 60,286 55,286 (5,000) -8.3%
5605 Telephrnre wpport 200 1,500 1,594 1,544
5606 Electric - 11,000 11,000 11,OD0
Total:Internal Service Charges 11,000 70,800 76,705 71,705 (5,000) -7.1%
Total:Non-Personnel Expenses 15,696 77,000 82,905 77,905 (5,000)
Dewrtinen[Total:Civil Service 286,523 365,400 411,275 406,275 (56000) -1A%
8/23/2012
CITY OF SAN BERNARDINO, CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND - 001
FY3012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- °/e Inc/
Account Number Defcnption Amount Ending Budget BUDGET PENDENCY PLAN $Inc/(Dec) (Dec)
Department: COMMUNITY DEVELOPMENT
Pesonnel
Salanes
5011 Salaries perm/fulltime 3,564,995 2,681,10D 4,202,100 2,993,900 (1,208,200) -28.8%
5012 Special salaries 8,750 5,400 9,600 7,200 (2,400) -25.D%
5013 Automodle allowance 24,788 10,600 6,825 6,825 - 0.0%
5014 Salinas temp/pudime 70,816 73,000 66,000 - (66,000) -100.0%
5015 Overtime 12,301 5,DDO 18,000 - (18,000) -100.0%
5016 Force awount labor - - - - - #DW101
51318 Vacation pay 10,108 - - - #D(V/0!
Tatal:Salarbs 3,691,757 2,775,100 4,302,525 3,007,925 (1,294,600) -06.7%
BenvAb #DIV/0!
5024 PERS retirees teats - - - - - #DN/0!
5026 PERS retirement 712,361 672,900 1,048,237 750,601 (297,636) -28.4%
5027 Health and life insurance 402,174 338,600 441,800 316,500 (125,300) -28.4%
5028 UnemploymeRiisurance 11,091 8,400 13,000 9,500 (3,500) -26.9%
5029 Medicare 47.085 39.100 60.825 43.325 (17.500) -28.8%
Total:Beard 1,172,710 1,0591000 1,563,862 1,119,926 (443,936) 41.9%
Total:Salanes&benefits 4,864,468 3,834,100 3AW307 4,127,851 (1,736,536) -45.3%
Maintenance and Operetions
5111 Matenal and wppl!es 56,703 50,000 84,000 47,300 (36,700) 43.7%
5112 Small tools and equipment 237 16,6DO 16,600 3,.300 (13,300) -80.1%
5121 A rtising 15,21D 14,000 27,60D 13,500 (14,100) -51.1%
5122 Dues and subscriptions 4,816 7,500 18,200 500 (17,700) -97.3%
5131 MlWge - 500 3,500 - (3,500) -100.0%
5132 Meetings and conferences 313 5,000 25,500 - (25,500) -100.0%
5133 Eduratian and training 5,999 15,DDD 42,400 500 (41,900) -98.0%
5165 SIRdeducbble - - - -
5171 Rentas 82 - 2,100 200 (11900) -90.5%
5172 Equipment mairnenance 1,195 1,500 8,000 1,900 (6,100) -76.3%
5173 Oulside venide maintenance - - -
5174 Printing charges 11,812 16,000 53,500 16,SOD (37,000) -69.2%
5175 Postage 52,509 60,000 75,400 55,700 (19,700) -26.1%
5176 Copy machine charges 9,263 6,000 20,600 15,600 (51000) -24.3%
5181 Oder operating expenses 30 7,500 21,800 8,500 (13,300) -61.0%
5183 Managenentallcwime 136 6DO 500 600
Told:Mainherrance and Operations 156.304 200,200 399AN 164.100 (235.7003 -117.7%
Caddell Services
5502 Professiore4rentractual services 303,065 343,400 343,400 340,000 (3,400) -1.0%
5503 titgabon-outside a"neys - - - -
5504 Construction - - - -
5505 Other professional services 211,395 259,400 259,063 237,100 (21,963) -8.5%
5506 landscape contracts 109,775 29,200 53,000 53,000
5507 Fadfidnes s ces
Total:Contractual Services 624,235 632,000 65SAO 630,100 (25,363) 4.0%
Internal Service Charges
5601 Garage charges 49,200 55,200 43,700 43,700
5602 Workers wnpensation 116,800 23,800 96,600 96,600
5803 liability 170,200 280,000 280,000 280,000
5604 Cr charges in-house, 187,900 244,200 378,486 378,486
5605 Telephone support 66,OOD 118,700 151,189 151,189
5606 Electric - 33,000 33,000 33,000
5612 Fleet charges-fuel 38,600 41,100 46,600 46,600
Tell Internal Service Charges 628,700 796,000 1,029,575 1,029,575 0.0%
Calbl Outlay
5702 Computer equipment - 8,000 - -
5703 Communimbans equipment - - - -
S7D4 Miscellanem4 equipment - 4,000 -
Total:Capital Outlay - 12,000 - - #DIV/01
Total:Non-Personnel Expenses 1,411,239 1,640,200 4064,838 1,82$775 (261,063) -12.5%
Deparbrrent:Community Development 6,275,707 5,474,300 7,951,225 5,951,676 (119991599) -25.1%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND- 001
FY2012-13
PRELIMINARY FY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- No Inc/
Account Number Description Amount Ending BudBat BUDGET PENDENCY PLAN $Inc/(Dac) (Da)
Department: FIRE DEPARTMENT 1,999,599
ParwmMl
Salaries
5011 Salaries perm/fulturne 17,359,660 18,100,000 18,411,241 16,243,505 (2,167,736) -11.89b
5012 Special salaries 307,511 303,600 293,075 97,979 (195,096) -66.696
5013 AiAompblle aWWance 3,850 - 6,900 6,900
5014 - Salaries temp/eartbma 20,065 15,000 117,400 117,400
5015 Overtime 6,631,957 6,300,000 6,184,090 5,584,090 (600,ODO) -9.796
5018 Vacation pay 361,359 390,000
Total:Salaries 2,8,684,402 25,108,600 25,017.706 27,049,874 (;962,632) -11.8%
Bandits
5024 PERS retirees health - - - -
5026 PERS retirement 4,038,510 4,744,400 5,550,20D 4,837,159 (713,041) -12.8%
5027 health and life mwance 1,802,542 1,725,000 2,014,053 1,741,217 (272,836) -13.5%
5028 Unemployment insurance 73,441 75,000 57,415 50,537 (6,878) -12.09b
5029 Medicare 271,246 275,000 273,749 239,358 (34,391) -12.6%
Total:Benefits 6,185,739 6,819,400 7,895,417 6,864271 (1,07],146) -15.1%
Total:Salaries&benefits 30,870,141 31,928,000 37,908,173 74919,145 (3,909,978) -115%
Maintenance and Operations
5032 Reimbursed nonheahh benefit (19,355) - -
5111 Material and wpplia 291,061 415,900 450,700 415,900 (34,800) -7.7%
5112 Small tools and equipmerd 00,407 97,500 85,300 85,300
5113 Motor fuel and lubricants 10,971 19,100 19,100 19,100
5121 Advertising 21,782 20AM 20,000 20,000
5122 Dues and suMcriptlons 3,387 4,90D 4,700 4,700
5129 Street sweepers LP 1,197 - - -
5131 Mileage - S00 500 Sw
5132 Meetings and conferences 697 2,500 4,200 2,500 (1,700) 10.5%
5133 Education and training 27,094 33,700 45,200 34,000 (11,200) -24.8%
5171 Rentals 7,627 12,000 12,000 12,000
5172 Equipment maintei 29,917 75,000 100,500 100,500
5173 Outside vehicle maintenance 23,673 80,000 110,000 00,000 (30,000) -27.3%
5174 Printng charges 7,289 12,000 16,500 12,000 (4,500) -27.3%
5175 Postage 14,664 11,000 14,700 14,700
5176 Copy machine charges 10,925 11,500 15,100 151100
5179 Dump/miae fees 1,871 2,000 2,200 2,200
5181 Other operating expenses 20,060 15,000 20,000 20,000
5183 Management allowance 9 600 60D 600
5193 Grant match 14,861 9,800 - -
Total:MainenanceandOperations SWIM 823,000 921,300 839,100 (84200) -10.0%
Contact Services
5505 Other professional services 161,231 195,000 240,300 240,300
5507 Facilities services 7,866 13,500 77,500 77,500
Total Contactual Services 161 208,500 317,800 317,8110 - 0.0%
Internal Service Charges
5601 Garage charges - - -
5602 Workers compensation 598,930 808,100 834,050 834,050
5603 Uability 156,600 230,000 230,000 230,000
5604 IT charges in-1house 564,500 654,200 570,753 570,753
5605 Telephone wpport 68,600 97,900 91,566 91,566
5606 Electric 141,900 149,000 149,000 149,000
5612 Feet charges-fuel 149,400 106,200 167,400 167,400
Total:Internal Service Charges 1,720,430 2,045,400 7,042,769 2,042,769
Capial 0u8ry
5703 Communications equipment - - 60,000 - (60,000) -100.0%
5704 Miscellaneous equipment - 21,500 -
5706 Alterations and renmations 2,500 - - -
5715 Assets acquired-Three Fire 991nes 1%,570 98,285 1,650,000 - (1,650,000) -100.0%
Todl:Capital Outlay 199.069 119,785 1.710,000 - (1,710,000) -1427.6%
Debt Service
5803 Debt Paymerits-Pension Bonds - 1,214,800 1,223,BD0 1,135,224 (88,576) -7.2%
Total:Dealt Service - 1,214,800 1,223,800 1,135,224 (88,576) -7.3%
Total:Non-Personnel Expenses 2,636,732 4,411,485 6,215,669 4,334,893 (1,880,776) 42.6%
Department Total:Fire 33,506,873 36,339,485 39,123,792 33,253,038 (5,870,754) -16.2%
8/23/2012
CITY OF SAN BERNARDINO, CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND - 001
PY2012-13
PRELIMINARY H 2012-13
2011 Actual 2012 Pmje,ted OPERATING PROPOSED PRE- %Inc/
Account Number Description Amount Ending Budge BUDGET PENDENCY PLAN $lnc/(Dec) (Dees)
Department: POLICE DEPARTMENT
Personnel
Salaries
5011 Salaries perr/fultYne 38,754,880 36,824,200 38,079,345 34,290,363 (3,788,982) -102%
SD12 Spedal salaries 757,915 723,600 723,600 666,000 (57,600) -8.0%
5013 Autanotile allmame 4,675 6,900 6,90D 6,900
5014 Salanestemp/mortune 922,498 988,000 938,000 763,000 (175,000) -18.7%
5015 Overtime 2,537,262 2,136,600 2,136,000 2,136,600
5018 Vacation pay 82,156 - - -
Total:Salanes 43,059,385 40,679,300 41,84,445 37,862,863 (021,562) 9.9%
Bandits
5D24 PERS refirees health - - -
5026 PERS retirement 0 10,334
ent 9,249,979 10,371,100 11,342,8 ,950 (1,007,850) -8.9%
5027 Health and life insurance 2,930,464 2,735,80D 2,620,7DD 2,277,150 (343,550) -13.1%
5028 Unemployment lmurame 129,390 113,300 118,7DD 107,200 (11,500) -9.7%
5029 Medicare 529,209 5 96,500 536,900 482,050 (54,850) -10.2%
Total:Benefits 12,839,043 13,816,700 14,519,100 13,201,350 (1,417,750) -10.3%
Total:Salanes&benefits 55,898,438 4,46,000 56,503,545 51,064,213 ($439,332) -10.0%
Maintenance and Operations
5032 Reimbursed noniteath beriefrt - -
5111 Material and supplies 366,010 460,000 429,000 429,000
5112 Small tools and equipment 66,655 45,000 132,61)) 132,600
5113 Motor fuel aid lubricants 306 300 300 300
5121 AdYertisirg 50 1,900 1,900 1,900
5122 Dues and subscriptions 17,369 48,500 41,7DD 41,700
5132 Meemgs and conferences 10,051 15,OOD 23,700 23,700
5133 Education am training 14,041 31,500 53,500 53,500
5139 Training-Dost reimbuseade 88,47 150,000 205,000 - 205,000
5155 Cellular sernce 1,487 1,500 1,500 1,500
5171 Rentals 2,292 20,000 46,400 46,400
5172- Equipment maintenance 31,862 100,000 154,500 154,500
5173 Outside vehicle maintenance 45,503 53,500 53,500 53,500
5174 Printing charges 24,831 20,000 32,800 32,800
5175 Postage 23,808 26,000 40,500 40,500
5176 Cap/machine"rges 40,371 47,000 52,200 52,200
5181 Other operating�ses 6,453 15,000 12,500 12,500
5183 Mamgemantalb nce 190 600 600 600
5187 Poke reserves 13,133 17,000 20,400 20,400
Total:Maintenance and Operations 753,260 1,052,SDO 1,302,600 1,302,600 0,0%
coeract Semoes
5502 Professional/contractual services 59,594 45,000 60,000 60,000
5505 Other professional services 4SB,584 40,000 619,400 619,400
Total:Contractual Services 518,178 645,000 679AN 679,40 0.0%
Internal Service Charges
5601 Garage charges 492,300 893,300 763,8DD 763,800
5602 Workers compensation 1,635,200 1,574,ODD 1,796,475 1,7 96,475
5603 lability 806,900 1,042,700 1,D42,7DD 1,042,700
56D4 IT charges in-house 1,489,20D 1,416,800 1,M2,424 1,+12,424
5605 Telephone support 168,900 352,600 234,136 234,136
5606 Electric 291,600 - -
5607 Gas 36,000 - - -
56DB Water,sewn,geothermal 6,OD0
5610 Communications - - -
5611 Fleet charges-lease payments 844,679 881,200 881,2DO 881,200
5612 Fleet charges-fuel 597,700 485,000 755,6DO 755,600
Total:leaning Sersnm Charges 6,368,479 6,645,800 6,916,335 6,916,335 - 0.0%
capital Outlay
5702 Computerequlpment 27,752 5,700 - -
5n3 Cansnuniolbm W,,n ht - - - -
5704 Mka4laneots equipna 6,983 39,000 - -
570S Deparbnent computer equipment - -
5706 Ateratans and renovators - 50,000 25,000 - (25000) -100.0%
Total:Capital Outlay 34,735 94,700 25,000 (25,000) -26.4%
Debt Service
5803 Pension Bond payment - 2,172,400 2,203,700 2,203,700
Total:Debt Service - 2,172,400 2,203,700 2,203,700 0.0-1.
Total:Non-Personnel Expenses 7,674,652 10,610,500 11,127,035 11,102,035 (25,000) -0.2%
Department Total:Police 63,573,04 65,106,500 67,630,580 62,166,248 (5,464,332) -8.4%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND -001
FY2012-13
PRELIMINARY 1,Y2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- %o Inc/
Account Number Description Amount Ending Budget BUDGET PENDENCY PLAN S Inc/(Dec) (Dec)
Department: PARKS& COMMUNITY SERVICES
Personnel
Salaries
5011 Salaries perm/fulltime 1,763,643 1,392,52D 1,824,130 922,400 (901,730) 49.4%
5012 Special salaries 1,025 - - -
5013 AutmVibik alloxance 12,840 13,600 13,530 8,43D (5,100) -37.7%
5014 Salariestemp/pardime 417,701 440,000 278,300 276,300
5015 Overtime 48,565 43,000 38,900 38,900
5038 Variation pay - 11,218 -Total:Salaries 2,274,990 1,811 120 2,159,860 1,248,030 (906,830) -48.0%
Benefits
5024 PERS retirees health - - - -
5026 PERSretirement 35D,270 345,00) 452,818 230,776 (222,042) -49.0%
5027 Health and life insurance 253,338 212,300 209,770 93,300 (116,470) -55.5%
5028 Unemployment insurance 6,839 5,300 5,020 2,790 (2,230) -44.4%
5029 Medicare 27,970 26,500 26,420 13,240 (13,180) 49.9%
Total:Benefits 638,417 50,100 694,020 340,106 (353,922) 60.1%
Total:Salanes&benefits 2,913,406 2,478,220 2,848,888 1,588,136 (1,260,752) _W.9%
Maintenance and Operations - -
5111 Mahadal and supplies 256,601 293,70D 316,000 306,001) (10,000) -3.2%
5112 Small tads anti equipment 23,944 5,700 8,965 8,965
5114 Raw foods - - - -
5121 Advertising 7,800 7,500 17,5W 12,500 (5,000) -28.6%
5122 Dues and subscriptions 2,185 4,000 4,600 4,600
5131 Mileage 1,669 3,50D 4,900 4,900
5132 Meetings and conferences 325 3,000 5,600 5,600
5133 Education and training - 60 4,400 4,400
5161 Insurance premiums 11,475 7,500 14,235 14,235
5171 Rentals 9,461 7,500 13,400 13,400
5172 Equipment maintenance 81 300 300 300
5173 Outside vehicle maintenance - - - -
5174 Printing dnrges 3,426 4,001) 9,800 9,800
5175 Posbge 4,129 4,500 5,300 5,300
5176 Copy machine charges 8,368 7,500 7,SW 7,500
5181 Other operating expenses 42,553 38,000 - -
5193 Grant match 369 85,400 85,400
Total:Maintenance and Operations 372AW 386,780 497,900 48 3,900 (15,000) -3.9%
Contract Services;
5502 ProfessionaVoontracb,al services 376,994 371,6W 371,800 871,800 500,000 134.5%
5505 Other pmfessloral services 93,550 100,10D 124,800 124,800
5500 landscape contracts 50,542 73,000 54,900 54,900
5507 Faillbes services 18,534 26,0D0 37,200 37,200
Total:Contractual Services 539,619 570,900 588,700 1,084700 5001000 87.6%
Internal Service Charges - -
5601 Ga.W charges 82,200 134,400 175,500 175,500
S602 Winners rnmpensation 88,200 168,900 209,665 209,665
5603 Liatility 70,DDD 87,500 87,500 87,500
5604 IF charges in-house 63,000 116,700 99,972 99,972
505 Telephone support 65,900 113,600 71,700 71,700
5606 Elecbic 613,600 752,700 752,700 752,700
5607 Gas 41,00 - - -
5608 Water,saucer,geoMerrral 119,000 - - -
%12 Fleetcharges-fuel 60,5W 84,300 93,200 93,200
Total:Internal Service Charges 1,203,400 1,458,100 1,494237 1,494237 0.0%
Capital Outlay - -
5704 Misceliareous equipment 23,637 - -
5706 Alterations and er..bors 15,000 - - -
Total:Capital Outlay 36XW - - - #DIV/01
Total:Nan-Personnel Expenses 2,154,122 2,415,780 2,576,&77 3,061,8:37 485,000 20.1%
Department Total:Parks Recreation&Community 5,067,520 4,894,000 57125,725 4,64$973 (775,752) -15.9%
8/23/2012
CITY OF SAN BERNARDINO,CALIFORNIA
FY2012-13 PROPOSED PRE-PENDENCY PLAN BUDGET
GENERAL FUND-001
FY2012-13
PREUMMARY FY2012-13
2011 Actual 2012 Projected OPERATING PROPOSED PRE- %Inc/
Account Number Description Anioult Ending Budget BUDGET PENDENCY PLAN S Inc/(Dec) (Dec)
Department: PUBLIC WORKS
Personnel
Salaries
5011 Salaries perm/full ime 1,903,789 2,000,000 3,227,650 2,267,355 (960,295) -29.8%
5012 Special salaries - - - -
5013 Aulnrrnlale albwxnce 2,100 3,000 4,275 2,550 (1,725) 40.4%
5014 Salaries temp/pribme 392,223 481,600 475,600 315,730 (159,870) -33.6%
5015 overtime 107,563 115,000 60,900 60,900
5018 Vacation pay 27,251
Total:Salaries 2,432,926 25991600 3,768,425 1,694535 (1,121,890) -03.2%
Benefits
5024 PERS retirees -
5026 PERS reErement 421,659 495,000 780,843 553,672 (227,171) -29.1%
5027 Meath and life imurarce 295,914 300,000 374,465 265,435 (109,030) -29.1%
5028 Unemployr a inwrance 7,307 8,300 9,935 6,950 (2,985) -30.0%
5029 Medcare 27,843 41,100 46,655 32,810 (13,845) -29.7%
Total:Benefits 757,723 844AN 1,214838 858,867 (353,031) -41.8%
Total:Salaries A breR4 3,185,649 3,444,000 4,980,323 3,505,002 (1,474,921) 428%
Mainlerence and OperaBwe
5111 Material and wpplles 763,880 780,300 1,012,000 826,800 (185,200) -18.3%
5112 Small tools and equlpinent 4,486 10,000 14,500 7,500 (7,000) 4B.3%
5121 Odce sing 1,554 1,000 1,000 1,000
5122 Dues and wbscriptdns 4,293 5,500 5,900 3,900 (2,000) -33.9%
5132 Meetings and conferences 1,465 2,500 4,000 - (4,000) -100.0%
5133 Education and training 2,798 2,000 8,800 2,000 (61800) -77.3%
5171 Rentals 33,338 42,000 31,600 31,600
5172 Equipmeft maintenance 8,511 19,900 8,000 6,200 (1,800) -22.5%
5173 Outside vehicle - - - -
5174 Prnbrg charges 772 1,000 1,400 650 (750) -53.6%
5175 Postage 340 1,500 1,500 1,500
5176 Copy machire charges 6,760 20,500 9,100 5,600 (3,500) -38.5%
5181 Odrer operating expenses - 10,000 40,500 - (40,500) -100.0%
5183 Maregementallorx:e - 300 3D) - (300) -100.0%
Total:Mai.leunre and Operations 828,197 8%,500 1,134600 886,750 (251,850) -28.1%
Contract Sevices - -
5502 Professiona0cpntiactual services 390,549 514,100 512,200 421,200 (91,000) -17.8%
5505 Ober pmfessional services 266,498 390,700 354,400 354,400
5507 Facilities services 367,337 320,000 281,400 261,400 (20,000) -7.1%
Total:Contractual Services 1,024,384 1,224,800 1,144000 1,037,000 (111,000) -9.1%
InlenMl Service Changes - -
5601 Garege charges 198,000 174,400 180,000 180,000
5602 Workers ccapenartim 216,900 135,000 137,730 137,730
5603 Iladlity 270,700 141,000 141,000 141,500
5604 UcMrges in-rmee 134,500 306,200 148,522 148,522
505 Teepime support 43,500 181,500 74,867 74,867
5606 EIeNd 1,934,600 1,899,200 1,899,20 1,899,200
5607 Gas 9,800 - - -
508 Water,serer,geotiiermal 39,200 - - -
5612 Fleet Wyes-fuel 104,900 87,300 107,900 107,900
Total:Interred Service Charges 2,952,400 2,924,600 ;689,219 2,689,219 0.0%
Capital Outlay -
5703 Cemmuricetiors equipmem - - - -
PO4 Miscellareou equipment 13,034 - 15,000 - (15,000) -100.0%
Tidal:Capital Outlay 13,034 - 15,000 - (15,000) 100.0%
CredB/billable; -
5949 Bilabke m Water department 1,668 - - -
Total:Cede[/billables 1,668 - - - #Den 101
Total:Non-Personnel Expenses 4,819,682 510451900 4,990,819 4,612,969 (377,850) -7.5%
Depart we Total:Public Works 8.005331 8fi891900 9.97L142 8.118371 (1.852.7711 -21.8%
6/23/2012
APPENDIX B-FISCAL YEAR 2012-2013 PRE-PENDENCY PLAN
FY2012-13 Preliminary Operating Budget:
Revenues $ 120,424,165
Expenditures 166,236,557
Net revenues/(deficit) (45,812,392)
Revenue Budget Measures:
Revenue-SAFER Grant Award for FY2012-13 1,500,000 1,500,000 (w)
Cost Reduction Measures:
Proposed Workforce and Service Reductions 15,659,404
Maintenance and Operations-line item reductions 767,675
Contractual Service Reductions 152,763
Miscellaneous 93,576
Cost Reduction Offsets:
Outsourcing services (651,000)
Financial and restructuring costs (2,000,000)
Funding Deferrals:
Deferral of Retiree Health Contribution(ARC) 6,033,000
Equipment Replacement Deferrals:
Phone switch and network infrastructure 564,380
Fire Truck Replacement(3 Engines) 1,710,000
Equipment(Police and Public Works) 40,000
Cost Reduction/(offset)Measures 22,369,798 (x)
Net FY 2012-13 Structural Excess/(Deficit)before transfers (21,942,594)
Net Transfers in/Out 5,521,700
Net FY 2012-13 Structural Excess/(Deficit) (16,420,894) (y)
Additional Measures:
30%of Common Council 211,695
0%of City Treasurer's Office(c) -
30%of City Attorney's office 1,487,882 1,699,577
Concessions(b):
Voluntary 10%Concessions(All Depts except Safety) 1,497,900
10%Concessions by Fire and Fire Management(a) 2,176,999
10%Concessions by Police(a) 3,990,579
Potential-Adjusted Net FY 2012-13 Structural Excess/(Deficit) ($7,055,839)
Notes:
(a)-Interim Measure;to be addressed more fully in mediation/bargaining
(b)-the 10%calculation is after Proposed Workforce and Service Reductions
(c)-Internal control procedures, no further reductions to the City Treasurer's are advised
8/23/2012