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HomeMy WebLinkAbout03- City Manager CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Charles McNeely, Subject: That the City manager's proposed City Manager Modified Budget Strategies for the FY 10-11 and FY 11-12 budgets be discussed and approved. Dept: City Manager ORIGINAL Date: August 19, 2010 Meeting Date: August 23, 2010 Synopsis of Previous Council action: June 15, 2010 Council meeting to discuss FY 2010-2011 Budget. June 30, 2010 Resolution 2010-221 approving the Final Budget and directing staff to prepare budget documentation. June 30, 2010 Resolution 2010-224 approving ratifying the adoption of resolution No. 2010-221 approving and adopting the city of San Bernardino's final Budget for fiscal Year 2010- 2011 and directing the establishment of the City's Appropriation Limit as required by Article XIII B of the California State Constitution. Recommended motion: That the City Manger's Modified Budget Strategies be approved and implemented as outlined in the staff report from Charles McNeely, City Manager, dated August 19, 2010; and that the Director of Finance be authorized to amend the FY 2010-2011 budget and prepare the preliminary FY 2011-2012 budget to reflect the implementation of these strategies. Signature Contact person: Barbara Pachon. Director of Finance Phone : ext. 5242 Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: 8%General Fund savings over two fiscal years. Source: (Acct. No.)Various Department Accounts (Acct. Description) Finance: Council Notes: Agenda Item No. 3 8/23/10 CITY OF SAN BERNARDINO -REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT That the City Manager's proposed Modified Budget Strategies to bring the FY 2010-2011 and FY 2011-2012 budgets into balance be discussed and approved. BACKGROUND On June 30, 2010 the City adopted its final budget for FY 2010-2011 that included Personnel Cost Savings assumptions worth $10.7 million and various revenue strategy assumptions worth about$10.2 million. Also at the June 30, 2010 Council Meeting, staff requested authorization to proceed with preparation of the necessary documents to submit the Real Property Transfer Tax for voter approval. In addition, at the same meeting staff also requested authorization to proceed with the formation of a City-wide Maintenance Assessment District. After further consideration of these items,the Council determined that these two budget strategies were no longer a viable option and instead requested staff to work on a half cent increase to the Local Transaction and Use Tax as well as bring back the Police Impound Yard proposal for further review and discussion. On July 6, 2010, staff requested authorization to proceed with preparation of the necessary documents to submit the half cent Local Transactions and Use Tax for voter approval. After further discussion at the July 6a'meeting, the Council decided this budget strategy was also not a viable option to be considered any further. The Police Impound Yard is still being reviewed and discussed by the Council at this time. Based on these actions the City's FY 2010-2011 budget now has an estimated shortfall in revenues of about $1.6 million due to the Council deciding not to pursue these various options. Human Resources started the negotiations process with all the bargaining groups with the goal of getting agreement on the implementation of the $10.7 million of Personnel Cost Savings. Unfortunately at this point in time it is estimated that the Personnel Cost savings will fall short of projections by about $1.1 million. With only a small amount of new revenue identified at this time to help reduce the total anticipated General Fund shortfall there is a net shortfall projected for FY 2010-2011 of just over$2.1million and $7.8 million for FY 2011-2012. Based on these projected shortfalls staff was requested to provide an 8%reduction of their budgets over the two fiscal year periods. These proposed budget reductions are being presented to the Mayor and Council for review, discussion and approval to implement. 2 FINANCIAL IMPACT Based on all the assumptions discussed above, for FY 2010-2011 the City has a projected shortfall of just over $2.1 million. In FY 2011-2012 the shortfall increases to about $7.8 million. In order to bring the City budget into balance, either additional revenues need to be generated or expenditures need to be reduced. If neither of these actions is taken starting this fiscal year the City will be out of funding and will not be able to operate and pay for any services to the community. RECOMMENDATION That the City Manger's Modified Budget Strategies be approved and implemented as outlined in the staff report from Charles McNeely, City Manager, dated August 19, 2010; and that the Director of Finance be authorized to amend the FY 2010-2011 budget and prepare the preliminary FY 2011-2012 budget to reflect the implementation of these strategies. 3 City of San Bernardino Updated General Fund Financial Projections Fiscal Years 2011 to 2015 General Overview: Effective businesses must continually analyze operations and develop financial plans that address the short term, mid-range, and long-term time frames. This type of analysis is critical for an organization to maintain its financial strength and stability. A financial analysis that reinforces a long-range focus allows an organization to systematically identify, plan and achieve goals within its available financial resources. A long range financial focus becomes even more critical in the face of the devastating economic decline that our country has faced since the Fall of 2008. Our city has had to respond to changing financial conditions in a manner and speed that is unprecedented. The stock market incurred record losses, housing values experienced steep declines,the foreclosure rate skyrocketed and unemployment rates dramatically escalated. The State of California continues to wrestle with multi-billion dollar deficits and the national, state and regional economy is still volatile and unstable. In response to this economic tailspin, the City has depleted most of its financial reserves and has been forced to balance its budget on a year to year basis using one time resources, employee 10%concessions, and loans. In order to gain financial stability, a long range financial projection is being presented for the City's General Fund. The projections cover five fiscal years beginning with the current Fiscal Year 2010-2011 and goes out to Fiscal Year 2014-2015. Detailed below are the main financial assumptions and analysis that were used to update the original General Fund financial projections that were presented to the Mayor and Council back on March 11, 2010. Of the three scenarios originally presented to the Mayor and Council back in March, the worse case scenario was determined to be the most likely to occur so therefore that is the only scenario that is being updated at this time. Fiscal Year 2010-2011: On June 30, 2010 the City adopted its final budget for FY 2010-2011 that included Personnel Cost Savings assumptions worth $10.7 million and various revenue strategy assumptions worth about$10.2 million. Listed below is a summary of the major budget balancing strategies that were included in the FY 2010-2011 adopted budget. I. $2.4 million of revenue from the sale of the Convention Center to EDA. 2. $6.2 million from a Utility Fee Study of Water, Refuse and Sewer operations. 3. $1.6 million from an increase to the Property Transfer Tax 4. $10.7 million of Personnel Cost Savings 5. $1.3 million savings from deferral of repayment of a loan from EDA 6. $1.8 million increase in assumed expenditure savings. 7. $1.3 million savings from a new Fire SAFR Grant. ' 8. $1.0 million savings from a Police Indian Gaming Grant. Also at the June 30, 2010 Council Meeting, staff requested authorization to proceed with preparation of the necessary documents to submit the Real Property Transfer Tax for voter approval. In addition, at the same meeting staff also requested authorization to proceed with the formation of a City-wide Maintenance Assessment District. After further consideration of these items, the Council determined that these two budget strategies were no longer a viable option and instead requested staff to work on a half cent increase to the Local Transaction and Use Tax as well as bring back the Police Impound Yard proposal for further review and discussion. On July 6, 2010, staff requested authorization to proceed with preparation of the necessary documents to submit the half cent Local Transactions and Use Tax for voter approval. After further discussion at the July 6`h meeting,the Council decided this budget strategy was also not a viable option to be considered any further. The Police Impound Yard is still being reviewed and discussed by the Council at this time. Based on these actions the City's FY 2010-2011 budget now has an estimated shortfall in revenues of about $1.6million due the Council deciding not to pursue these various options. Human Resources started the negotiations process with all the bargain groups with the goal of getting agreement on the implementation of the $10.7 million of Personnel Cost Savings. Unfortunately at this point in time it is estimated that the Personnel Cost savings will fall short of projections by about $1.1 million. With only a small amount of new revenue identified at this time to help reduce the total anticipated General Fund shortfall there is a net shortfall projected for FY 2010-2011 of just over$2.1million. The updated projections for FY 2010-2011 included in the attached spreadsheet reflect the net projected shortfall for FY 2010-2011 and all years after that to FY 2014-2015. Revenue Assumptions: After deducting the one-time revenue items from the FY 2010-2011 budget, the 5 year projection model employs a range of assumptions as to how revenues will perform each year based on predictions of how the economy will recover each year. The following provides the estimated percent change in revenues that was assumed for each year in the updated financial projection. These percent changes are the same ones that were used in the original March 11, 2010 financial projection. At this point in time the original percent changes are still deemed to be most likely to occur. Worst Case FY10-11 -2.5% FYII-12 -1.5% FY12-13 1.0% FY13-14 1.0% FY14-15 1.5% In addition to applying the above assumptions to the revenue estimates, the estimates for Property Tax, Sales Tax, and Utility User Tax were adjusted to reflect the increase in revenues projected from the Kohl's E-Commerce Center as approved by Council at the August 2,2010 Council Meeting. Expenditure Assumptions: The expenditure assumptions used in the financial projections assume that everything authorized in the FY 2010-2011 adopted budget will continue into the future. For example, the same number of authorized positions, using the current pay scale, was assumed. Also assumed in the financial projections were the same operating Departments doing the same amount and type of work. Items that still have not yet been included in the 5 year financial projection at this point is a plan to replenish the General Fund Reserve, funds for the replacement of old and out h T i Plan t i dated equipment/facility items, costs to implement the I Strategic , and se aside funds to cover such expenses as pay off costs of vacation, sick, and holiday time when employees terminate. It is assumed these costs will continue to be funded from savings generated by keeping positions vacant. Once the economy and City budget begin to stabilize, these items need to be added into the financial projections. In order to be as accurate as possible on future year's projections, the expenditures were broken down into various budget expenditure categories. The following provides a brief explanation of the content and assumptions for each of the categories. Salaries: 1. In the Updated FY 2010-2011 and FY 2011-2012 projections it was assumed there would be about$9.6 million is Personnel Cost Savings in the General Fund (about$675,000 of these Personnel Cost Savings are reflected in the Internal Service Charge line budget for FY 2010-2011 and FY 2011-2012). This assumption is about$1.1million less than what was originally included in the FY 2010-2011 adopted budget. Since not all bargain groups have completed the negotiation process and we are already two months into the fiscal year, an assumption is being made that not all personnel cost savings are going to be realized. 2. There are no additional Charter 186 salary funds assumed at this time until FY 2012-2013 in which a 5% increase for Safety was included and a 3%increase for each of the following years. 3. Sixteen additional Police positions from the COPS Rehiring Grant were added into the budget starting in FY 2009-2010. Grant credits were also included to reflect grant funds paying for the additional 16 positions through the first six months of FY 2012-2013. It has been assumed that all 16 positions will be retained by the City after the grant credits end in FY 2012-2013. As a result in FY 2012-2013 there is an additional $1.2 million cost for these positions and $2.2 million in FY 2013-2014 and beyond. 4. For FY 2010-2011 and all future years it has been assumed that Police will continue to receive about $1 million from the Indian Gaming Grant. 5. For FY 2010-2011 and FY 2011-2012 it has been assumed that the Fire Department will receive funds from the SAFR Grant that will offset existing personnel costs. Starting in FY 2012-2013 this grant credit ends so the City will have an additional cost of about$1.4million in Fire Salaries. 6. For some Non-safety positions, a small increase has been included each year for step increases and then starting in FY 2012-20113 all step increases are assumed. No additional salary increases resulting from MOU negotiations were assumed. 7. Special Pays are all assumed to stay constant with no major changes. The major items included in this category are auto allowances, uniform allowances for Safety, and education incentive pay for Safety. 8. Part-Time salaries were assumed to stay relatively constant each year with only regular step increases included starting in FY 2012-2013. No increases in the number or pay rate of Part-time employees have been assumed at this time. 9. Overtime costs were assumed to stay relatively constant through FY 2011-2012. Starting in FY 2012-2013 an increase each year has been assumed due to Safety Charter 186 pay increases. Approximately$6.8 million of the $7.3 million overtime budget is spent in the Police and Fire Departments. In the Safety Departments all but a very small part is paid to the Safety employees in those Departments. Retirement: 1. Since the City has two separate PERS plans, one for Safety employees and one for all other employees(Miscellaneous employees), the costs have been broken down into these two categories. 2. PERS provided the City with their best estimate as to what the PERS rates would be in future years for both plans. 3. After FY 2010-2011 the PERS rates for both plans start to increase by large amounts until FY 2014-2015. The Safety rate increases about 4%per year and the Miscellaneous rate increases about 3%per year. These large rate increases are needed to off set the major investment losses that PERS had during the economic down turn. 4. Added into this updated five year projection is the assumption that the City will implement a two-tier retirement system for both safety and miscellaneous employees and this action would generate some savings for the City in the future. Also assumed are new employees hired in future years will be paying either all or some of the employee's retirement costs. 5. Included in the Safety retirement numbers is the $3 million payment for the Safety Pension Obligation Bonds that the City sold in order to fund some of the Safety PERS unfunded liability costs. Other Personnel Costs: 1. City Paid Health Costs include health costs the City currently pays for all employees and retirees. 2. The City currently budgets about $533,000 per year for retiree health costs. For most employees the City follows the PERS policy and currently contributes the minimum amount of about $108/month to retiree health costs. Each year this amount increases by a CPI-Medical Component. It has been assumed this cost will continue in future years. 3. City Health cost for current employees are assumed to stay about the same. Any increase in cost for health care is assumed to be paid by the employee and not the City. 4. Currently, Safety employees can also receive a higher City contribution to their retiree health costs if they have received enough service years with the City as negotiated in the Memorandum of Understanding. These added costs would also be covered by the annual projected increases in this category. 5. Other taxes the City is required to pay are the Unemployment Tax and Medicare Tax. The City only pays its share of these costs and the employee is responsible for his or her share. Other Operational Costs: For Maintenance & Operations costs, Contractual, Internal Service Charges, and Capital Outlay about a 1% increase has been factored into each year. This increase is to cover any price increases or replacement costs for current items. In addition to the 1% increase the Contractual budget has also been increased to reflect the cost sharing payments that the City will make to Kohl's each year per the Council approved item at the August 2, 2010 council meeting. Debt Service Charges are assumed to stay about the same. The Safety Pension Obligation Bond costs are not included here as they are included with the Safety Retirement costs discussed above. The remaining major debt charges currently budgeted and paid by the City are: 1. City Hall Building $1 million per year. 2. Fire Equipment Leases and Fire Station Lease about $900,000 per year 3. HUB project debt payment $150,000 per year The updated projections now assume that the City will repay the $1.6 million loan from the Regional DIFF Fund in FY 2011-2012 and will repay the $1.3 million loan from EDA in FY 2012-2013. Budgeted Expenditure Savings: The estimated budgeted expenditure savings each year for FY 2010-2011 and FY 2011- 2012 is just under $2.9million. Starting in FY 2012-2013 the savings has been reduced to $2million per year. The reduction is based on the assumption that fewer positions will be held vacant for shorter periods of time. Transfers: Transfers Out is estimated to stay about the same with about a 2% increase. This increase would cover anticipated higher costs in Libraries, Animal Control, etc. Summary: Based on all the assumptions discussed above, for FY 2010-2011 the City has a projected shortfall of just over$2.1million. In FY 2011-2012 the shortfall increases to about $7.8million and then drastically increases starting in FY 2012-2013 after the current Personnel Cost Savings are projected to end. In order to bring the City budget into balance either additional revenues need to be generated or expenditures will need to be reduced. If neither of these actions is taken starting this fiscal year the City will be out of funding and will not be able to operate and pay for any services to the community. City of San Bernardino General Fund Updated Financial Projection Worst Case Adopted Updated Projected Projected Projected Projected 2010-2011 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 Beginning Fund Balance $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 $ 1,770,400 Estimated Revenue: Property Taxes 27,740,000 27,740,000 27,600,000 27,947,100 27,873,100 28,291,200 Sales Taxes 20,511,600 20,811,600 21,100,000 21,405,900 21,630,000 21,959,200 Utility Users Taxes 22,700,000 1 22,750,000 22,500,000 22,583,100 1 22,808,900 23,151,100 Measure Z District Tax 5,120,000 5,120,000 5,043,200 5,093,600 5,144,600 5,221,700 Other Taxes 6,956,000 5,376,400 5,295,800 5,348,700 5,402,200 5,483,200 Total Taxes 83,027,600 81,798,000 81,539,000 82,378,400 82,858,800 84,106,400 Licenses and Permits 7,812,000 7,812,000 7,694,800 7,771,800 7,849,500 7,967,200 Fines and Penalties 3,493,600 3,493,600 3,441,200 3,475,600 3,510,400 3,563,000 Use of Money&Prop" 3,195,000 3,195,000 747,100 754,500 762,100 773,500 Intergovernmental 5,349,100 5,349,100 5,268,900 5,321,600 5,374,800 5,455,400 Charges for Services 5,918,000 5,918,000 5,829,200 5,887,500 5,946,400 6,035,600 Miscellaneous 8,916,900 8,916,900 8,783,100 8,870,900 8,959,700 9,094,100 Transfers In/Loan Proceeds 13,449,000 13,449,000 13,200,000 13,250,000 13,300,000 13,350,000 Total Other Revenues 48,133,600 48,133,600 44,964,300 45,331,900 45,702,900 46,238,800 Total Estimated Revenues 131,161,200 129,931,600 126,603,300 127,710,300 128,561,700 130,345,200 Expenditures: Salaries: Full Time 71,113,800 71,113,800 71,048,200 77,348,200 80,648,200 82,448,200 Part-Time 2,128,600 2,128,600 2,130,000 2,150,000 2,160,000 2,175,000 Special Pays 1,568,300 1,568,300 1,575,000 1,575,000 1,575,000 1,575,000 Overtime 7,328,800 7,328,800 7,330,000 7,500,000 7,600,000 7,700,000 MOU Concessions (10,024,800) (8,924,800) (8,924,800) - - Subtotal Salaries 72,114,700 73,214,700 73,158,400 88,573,200 91,983,200 93,898,200 Retirement: Safety Retirement 14,357,000 14,357,000 14,600,000 15,160,000 15,675,000 15,775,000 Miscellaneous Retirement 5,319,100 1 5,319,100 5,320,000 5,582,300 5,752,300 5,800,000 Subtotal Retirement Costs 19,676,100 19,676,100 19,920,000 20,742,300 21,427,300 21,575,000 Other Personnel Costs: City Paid Health Costs 9,294,700 9,294,700 9,300,000 9,350,000 9,400,000 9,450,000 Misc.Other Taxes 1,367,500 1,367,500 1,370,000 1,400,000 1 1,425,000 1,450,000 Subtotal Other Personnel 10,662,200 10,662,200 10,670,000 10,750,000 10,825,000 10,900,000 Maintenance&Operation 5,282,600 5,282,600 5,300,000 5,350,000 5,400,000 5,450,000 Contractual Services 6,900,100 7,060,100 7,300,000 7,625,800 7,771,000 7,903,800 Internal Service Charges 14,010,000 14,010,000 14,124,800 15,280,000 15,585,600 15,897,300 Capital Outlay 91,600 91,600 100,000 110,000 115,000 120,000 Debt Service Charges 2,171,400 2,171,400 2,171,400 2,171,400 2,171,400 2,171,400 Loan Repayments - 1,629,400 1,350,000 - - Est.Expenditure Savings Factor (2,863,400) (2,863,400) (2,863,400) (2,000,000) (2,000,000) (2,000,000) Transfers Out 2,769,800 2,769,800 2,800,000 2,850,000 2,900,000 2,950,000 Total Estimate Expenditures $ 130,815,100 $ 132,075,100 $ 134,310,600 $ 152,802,700 $ 156,178,500 $ 158,865,700 Budget Shortfall(Revenue-Expenses) 346,100 (2,143,500) (7,807,300) (25,092,400) (27,616,800) (28,520,500) Reserve Fund Balance $ 2,116,500 1 $ (373,100) $ (6,036,900) $ (23,322,000) $ (25,846,400) $ (26,750,100) CITY OF SAN BERNARDINO DEPARTMENT 8% REDUCTION TARGETS/PROPOSALS FOR FY2010.11/2011-12 8% ADOPTED BASE 8% Reduction Department DEPART Target City Attorney $ 3,674,600 293,968 0 City Clerk 2,004,800 160,384 348,200 City Manager 1,283,000 102,640 102,900 City Treasurer 202,400 16,192 40,500 Civil Service 303,100 24,248 21,100 Common Council 568,600 45,488 0 Community Development 7,607,100 608,568 640,313 Finance 1,668,200 133,456 133,500 Fire 32,621,400 2,609,712 2,666,227 Human Resource 4,985,900 398,872 403,300 Information Technology 3,566,800 285,344 286,040 Library 2,259,100 180,728 180,370 Ma or 734,900 58,792 58,800 Parks, Recreation, &Comm Servici 5,379,800 430,384 435,000 Police 63,880,300 5,110,424 5,093,160 Public Works 8,784,600 702,768 834,809 Total $ 139,524,600 11,161,968 11,244,219 CITY ATTORNEY DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN City Attorney's Office FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $3,776,700 General Fund Budget Total: $3,776,700 8% Reduction Target: $293,968 Department Recommendations Total: $0 Full Time Department Employee Total: 22 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 22 1st Program Ongoing Budget Reductio Position Tier s Change Information not available at pnntinq time Total $0.00 Total 0 CITY CLERK DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN City Clerk's Department FY 2010.11 Proposed General Fund Reductions Budget Summary Total: $2,004,800 General Fund Budget Total: $2,004,800 Impact Statement: Reductions would primarily impact 8% Reduction Target: $16,384 maintenance, operations and part time assistance. Department Recommendations Total: $348,200 Full Time Department Employee Total: 16 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 16 Includes Reduction in Part Time 1st Program Ungoing Budget Reduction Plan Impact Position Tier __.... .,. Savin s Change 1 AReminlBus -$13,200 Reduce Operating Costs Impact to maintenance and operations-ongoing savings 2 Elections -$335,000 Reduce estimated election costs Reflects notification of reduction in costs from Registrar of Voters-reflects one time savings Total -$348,200 Total 0 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM 4wnitlrl es/ S TO: Charles E. McNeely, City Manager FROM: Rachel G. Clark, CMC, City Clerk SUBJECT: City Clerk's Office 8%Budget Reductions DATE: August 23, 2010 Per your request,my office has come up with proposed budget reductions for the City Clerk's Office. You indicated that our 8%cut equaled$160,000; however our total proposed cuts Op amount to $ 0,the major portion of which represents the reduction in costs for placing a ballot measure on the November 2010 ballot. The proposed recommendations would impact primarily maintenance and operations in three of our department's programs, i.e., Administration, Business Registration/TLT, and Elections. Administration Program Impacts on Maintenance and Operations The recommended cuts would totally deplete any funding for meetings and conferences ($300), education and training($100), equipment maintenance($300), and management allowance ($200). Eliminating funding for meetings and conferences will prohibit staff from attending regional meetings of the City Clerks Association and workshops sponsored by the Association. A reduction in training costs would not allow us to send a staff member to a"Nuts and Bolts" workshop for City Clerk's staff, and elimination of equipment maintenance would leave us with no funds to cover any costs for breakdowns in our office equipment. Business Registration/TLT Program A total of$7700 would be eliminated from Business Registration/TLT Program. Affected accounts include a reduction in funds for dues and subscriptions ($200) ,meetings and conferences ($400); and computer equipment($1900) and total depletion of funds for Training ($100), Rentals ($500), and Part time salaries($4600). Elimination of funds for training and car rentals would leave us without funds for staff training or a vehicle for field work should our current vehicle break down. Elections Program '335, cod Due to a reduction in estimated costs for placing a ballot measure on the November 2010 ballot, we can delete.$35�96d from professional contractual services and$200 for Dues and /�'►, Subscriptions for a total reduction of$ S9 290 in the Elections Program. �.,i 336' 000 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Rachel G. Clark, CMC, City Clerk SUBJECT: City Clerk's Office 8% Budget Reductions DATE: August 23, 2010 Per your request, my office has come up with proposed budget reductions for the City Clerk's Office. You indicated that our 8%cut equaled $160,000; however our total proposed cuts amount to $358,800, the major portion of which represents the reduction in costs for placing a ballot measure on the November 2010 ballot. The proposed recommendations would impact primarily maintenance and operations in three of our department's programs, i.e., Administration, Business Registration/TLT, and Elections. Administration Program Impacts on Maintenance and Operations The recommended cuts would totally deplete any funding for meetings and conferences($300), education and training($100), equipment maintenance($300), and management allowance ($200). Eliminating funding for meetings and conferences will prohibit staff from attending regional meetings of the City Clerks Association and workshops sponsored by the Association. A reduction in training costs would not allow us to send a staff member to a"Nuts and Bolts" workshop for City Clerk's staff, and elimination of equipment maintenance would leave us with no funds to cover any costs for breakdowns in our office equipment. Business Registration/TLT Program A total of$7700 would be eliminated from Business Registration/TLT Program. Affected accounts include a reduction in funds for dues and subscriptions($200) , meetings and conferences($400); and computer equipment($1900) and total depletion of funds for Training ($100),Rentals ($500), and Part time salaries ($4600). Elimination of funds for training and car rentals would leave us without funds for staff training or a vehicle for field work should our current vehicle break down. Elections Program Due to a reduction in estimated costs for placing a ballot measure on the November 2010 ballot, we can delete$350,000 from professional contractual services and$200 for Dues and Subscriptions for a total reduction of$350,200 in the Elections Program. Budeet Reduction Plan Impacts to Personnel In the Business Registration/TLT Program, one of the recommended cuts would delete $4,600 from our budget for part time salaries. This would completely eliminate our ability to hire interns who, in the past, have successfully assisted this department in identifying new revenue. CITY MANAGER DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN City Manager's Office FY 2010.11 Proposed General Fund Reductions Budget Summary Total: $1,293,400 General Fund Budget Total: $1,283,000 Impact Statement: Reductions will require 8% Reduction Target: $102,640 restructuring of duties within the City Manager's Office. Department Recommendations Total: $102,900 Full Time Department Employee Total: 10 Proposed Full Time Employee Reduction: -1 Full Time Emploee Total: 9 Item Program Ongoing Budget Red Impact Position s Savin Chan e Impact on coordinated efforts to secure grants and 1 Grants $91,900 Eliminate 1 vacant position 1 develop legislative programs. 2 Admin -$11,000 1 Temporary Savings Temporary savings of ATCM position until filled Total -$102,900 Total -1 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM $11 111 TO: Charles E. McNeely, City Manager FROM: Debra Kurita, Assistant City Manager SUBJECT: City Manager's Office 8%Reduction Budget Summary DATE: August 23, 2010 Per your request, each City Department was asked to prepare an 8%budget reduction plan. This reduction to the City Manager's Office represents expenditure elimination of$102,640 from the FY 2010/11 Approved Budget. The recommendations outlined in this memo total $102,900. The significant impacts will affect the day-to-day operations of Administration and Grants Coordination/Intergovernmental Relations programs. Administration Program The main focus of the City Manager's Office is to provide leadership, direction and oversight of all policies and programs established by the Mayor and Common Council and to supply the City employees with the tools necessary to provide superior municipal services to the residents and business community of San Bernardino. Delaying the replacement of the Assistant to the City Manager position will limit the ability of the of the City Manager's Office to develop, implement, and lead new initiatives (e.g. SB TAAG, Air Quality/Rideshare, AQMD, etc.) and will result is slower turn around times for information requested by the Mayor and Common Council. Grants Coordination/Intergovernmental Relations Program One significant deficiency the City faces is the lack of a centralized and coordinated grant effort. Although the position is currently vacant, the elimination of the Senior Administrative Analyst/Grants coordinator will continue to limit the City's ability to actively seek and secure funding opportunities for the City. The elimination of this position will also affect the City's ability to continue development and implementation of a centralized, aggressive and responsible legislative lobby program that was started in FY 2010/11. Current staff will continue to maintain active relations between local, state and federal legislative delegations to insure positive impacts and promote the City's position on legislative issues. CITY TREASURER DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN City Treasurer's Office FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $202,400 General Fund Budget Total: $202,400 S% Reduction Target: $16,192 Department Recommendations Total: $40,500 Full Time Department Employee Total: 2.25 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 2.25 let Program ongoing Budget Plan Impact Position A. ins .fi Chan e 1 Admin -$40,500 Reduce M&O Water Department to cover share Treasurers operations Total -$40,500 Total 0 CIVIL SERVICE DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Civil Service Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $303,100 General 8% Red Budget Total: $$24,100 Impact Statement: Basic program services will remain Reduction Target: $24,248 intact. 8/a Re Department Recommendations Total: $21,100 Full Time Department Employee Total: 3 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 3 Program Budget Reduction Plan Impact 1st Ongoing Posit' Tier Saving's Increase revenue reimbursement to General Fund by 1 Admin -21,100 Reduce M&O Water Department for services provided by Civil Service and reduce de artment M&O Total -$21,100 Total 0 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Kelli Bruhl, Chief Examiner SUBJECT: Civil Service Budget Reduction Summary DATE: August 10, 2010 As directed, I have carefully reviewed department operations and prepared a contingency budget to reflect a 7%to 8% expense reduction. The reductions will have a negative impact on service levels to internal and external customers. I am neither endorsing this plan nor am I recommending its adoption. Reduction Maintenance& Operation Expense Reductions Membership renewal in the Western Regional Item Bank(WRIB)will be delayed until January 1, 2011, resulting in a 50% savings of the renewal fee. (Questions provided by WRIB for written exams may only be used if the membership is current.) Reductions are included in several other Maintenance & Operation accounts. For example, postage costs will be reduced by sending all notifications to applicants via electronic means rather than hard copy whenever an applicant provides an email address. Service Impact The primary impact of delaying the renewal of membership in WRIB will be to departments that use written exams as an assessment tool for some classifications. Until the membership is renewed, written tests will be revised to eliminate WRIB content and, in some cases, may not be used at all. Departments that use written tests to predict the ability of an applicant to successfully perform on-the-job may experience a decline in the quality of candidates presented for selection. Customer satisfaction will be negatively impacted by complaints from applicants who request notification by mail. (City Attorney staff has expressed reservations about using electronic means to notify applicants who indicate their preference for notification by postcard.) 1 Miscellaneous Item Increase Master Services Agreement with Water Department After review of the usage of Civil Services by the Water Department, a proposal was submitted to increase the amount the Water Department reimburses the General Fund through a Master Services Agreement from$69,200 to $87,780 for fiscal year 2010/2011. In recognition of the services provided by Civil Service to the Water Department, a"credit' toward the reduction is included in the contingency plan in the amount of the increase ($18,580) in reimbursement between the two fiscal years. 2 COMMON COUNCIL DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Common Council Office FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $568,600 General Fund Budget Total: $568,600 8% Reduction Target: $45,488 Department Recommendations Total: $0 Full Time Department Employee Total: 11 Proposed Full Time Employee Reduction: 0 Full Time Employee Total: 11 d - 1st Ongoing � Posit) Tier Program —savings Budget Reduction Plan Impact � f Information not available at printing time Total $0.00 Total 0 COMMUNITY DEVELOPMENT DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Community Development Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $7,607,100 General Fund Budget Total: $7,607,100 Impact Statement: Reduction in personnel will 8% Reduction Target: $608,568 restructure department organization and impact Department Recommendations Total: $640,313 delivery of service. Full Time Department Employee Total: 70 Proposed Full Time Employee Reduction: -6 Full Time Employee Total: 64 1st progr Tier am Ongoing Budget Reduction Plan Impact ition Savings µ. 1 Admin 4105,300 Eliminate 1 vacant position and Impact support services. 1 reduce operational expenses 2 Permits -$118,307 Eliminate I vacant positions Delay in processing times for projects. 1 3 Land Dev -$28,532 Eliminate 1 vacant position Delay in processing times for projects. 1 Single Eliminate 2 vacant positions and 4 Family $227,000 reduce operational expenses Delay in inspection turnaround 2 Inspections Code Eliminate 1 vacant position and 5 Enfo/Beau- $123,974 reduce operational expenses Delays in processing times. -1 tification 6 Weed -$37,200 Reduce operational expenses Reduction in resources Abatement Total -$"0,313 Total -6 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Valerie C. Ross, Interim Director SUBJECT: Community Development Department—8%Budget Summary DATE: August 23, 2010 The following are my recommendations for achieving an 8%reduction of the Community Development Department budget. I have vacant positions in most programs so they are included in my recommendations. We have lost numerous positions in Planning and Building and Safety over the last few years, including filled positions last fiscal year, so I do not want to cut additional, filled positions if at all possible. I have re- reviewed some of our original budget items and still believe we will achieve some savings through economies of scale related to the re-organization and other savings such as Overtime, Materials and Supplies, Printing, and Postage so I have not addressed these areas on a program by program basis. Program—Administration (0001) Recommendations Explanation Savings Overtime Reduce Amount 23,000 Salary Savings Reduce Amount 40,500 Materials and Supplies Reduce Amount 13,900 Printing Charges Reduce Amount 12,000 Postage Reduce Amount 13,000 Other Operating Expenses Reduce Amount 2,900 Total 105,300 Administrative Analyst II—Holding this Code Enforcement support position vacant will impact the preparation of the Code Enforcement Program's portion of the budget, user fee updates,RFPs, P.O.s, cash receipting, special projects, tracking of case documents and property owner notification procedures, and assisting the Division Manager. Salary Savings—This is a result of the reclassification from a Director position to a Division Manager position. None of these measures will affect revenue. Program—Permits and Customer Service (0024) Recommendations Explanation Savin s Engineering Assistant I .5 Eliminate vacancy 28,533 Associate Planner Eliminate vacancy 89,774 Total 118,307 Community Development 8%Budget Summary August 23,2010 Page 2 of 3 Engineering Assistant I(.5)—This person was assigned part time to the public information counter and part time to do plan check and development project review. Eliminating this vacant position will impact the implementation of the new Permits and Customer Service program, increase the processing time for development projects, and reduce the level of service to customers seeking development related information, property address number assignments, existing street and infrastructure plan research, and development impact fee deferrals. Associate Planner—This person was the "Planner of the Day" at the public information counter. Eliminating this vacant position means a different planner will take on these duties, leaving a Senior Planner and the City Planner to attend meetings,participate in D/ERC and Planning Commission, and the Historical Preservation Commission, and assume the Assistant Planner duties, including the processing of minor development permits and temporary use permits, answering general telephone calls (average 40 per day),responding to web-based inquiries and complaints, etc. The turnaround for entitlement projects will increase, and the level of response and availability of the Planning staff will decrease as a result. Additionally,much of the service to customers at the public planning counter will be transferred to the two remaining Development Services Technicians who already have full workloads, resulting in an increase in the wait times for customers seeking Planning, Building, and Engineering permits or information. The reassignments of staff to this program has already occurred and cross training is underway. However, the wait times at the public counter often reach or exceed one hour. For example, for the month of May there was an average of 80 people per day seeking information and/or permits for Planning, Building, and Land Development activities. There is a potential loss in revenue from people doing work without obtaining permits, along with an increase in compliance costs. Program—Land Development (0030) Recommendations Explanation Savings Engineering Assistant I .5 Eliminate vacancy 28,532 Total 28,532 This will not result in a direct loss of revenue. Program—Single Family Rental Inspections (0019) Recommendations Explanation Savings Code Enforcement Officer H Eliminate vacancy 67,050 Code Enforcement Officer II Eliminate vacancy 67,050 Overtime Reduce Amount 5,000 Materials and Supplies Reduce Amount 36,400 Small tools and Equipment Reduce Amount 12,000 Professional Services Reduce Amount 22,500 Motor Vehicles Reduce Amount 17,000 Total 227,000 Code Enforcement Officer II (2 positions)—Eliminating these vacant positions will increase the inspection turnaround timeframes and increase the total number of inspections per officer since the remaining Code Community Development 8%Budget Summary August 23,2010 Page 3 of 3 Enforcement Officers will receive additional inspection assignments. There will be no after hours inspections. There is a potential reduction in revenue from citations by holding the positions vacant. At an average of approximately$5,000 per officer per month, that's an estimated$60,000 per year for each officer. Program—Code Enforcement/Beautification (0021) Recommendations Explanation Savings Code Compliance Officer II Eliminate vacancy 62,474 Part Time Reduce Amount 25,000 Overtime Reduce Amount 18,500 Materials and Supplies Reduce Amount 18,000 Total 123,974 Code Officer H—Eliminating this position will result in an increase in timeframes for processing code violations and a decrease in the number of cases initiated and further reducing proactive efforts. Doing so could cause a potential reduction in revenue from citations. The average estimated revenues per officer in this program are approximately$2,500 per month which equated to $26,000 per year in potential revenue reduction. (This is lower than in the Single Family Rental Program because Code Enforcement/Beautification Officers also prepare warrants and abatement hearings.) Program—Weed Abatement(0020) Recommendations Explanation Savings Overtime Reduce Amount 2,000 Materials and Supplies Reduce Amount 1,200 Printing Charges Reduce Amount 1,500 Postage Reduce Amount 500 Contractual Services Reduce Amount 20,000 Motor Vehicles Reduce Amount 12,000 Total 37,200 Total Savings in Community Development $640,313 i I i f i r FINANCE DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Finance Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $1,668,200 General Fund Budget Total: $1,668,200 Impact Statement: Reductions result in loss of personnel which will impact the processing time in the 6% Reduction Target: $133,456 Department Recommendations Total: $133,500 functions of purchasing and payroll. Full Time Department Employee Total: 16 Proposed 2nd Tier Employee Reduction: -1 Full Time Employee Total: 15 Reduction in Part Time 1st Program Ongoing Budget Reduction Pla Impact Position Tier Savin s -.Change 1 Admin -$56,000 Reduction in M&O Increase revenues from Water Department to General Fund for services rovided. 2 Budget -$21,400 Reduction in M&O and PT Subtotal $77,400 Subtotal 0 Item Program Savin s Budget Re inp8 Loss of Accounting Technician will result in slower t Purchasing $41,000 Eliminate 1 position 1 processing time of services provided to departments 2 Accounting -$151100 Portion of Deputy Director Temporary charge of portion of Dep Dir salary to refuse c arged to Refuse Acct until Accountant position if filled Subtotal $56,100 Subtotal -1 Total $133,500 Total -1 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM Sim Ilrroan inn TO: Charles E. McNeely, City Manager FROM: Barbara Pachon, Director of Finance SUBJECT: Finance Department 8%Budget Summary DATE: August 23, 2010 As requested the Finance Department prepared an 8%budget reduction plan. This budget reduction plan for the Finance Department equals to a$133,500 reduction from the department's FY 2010-2011 Approved Budget. The recommended reductions are outlined below and they represent a significant impact to the Finance Departments day to day operations. The only way that the Finance Department could reach the 8%target reduction plan was to include the elimination of a full-time position, reduction of part-time hours and some operation costs. Administration and Budgeting The proposed reductions in Administration include increasing revenues from the Water Department to the General Fund to cover costs of services provided by Finance to that department. The budgeting program will be impacted by a reduction in the operations as well as a loss of part-time hours for the person who has been essential to the budget preparation process. Accounting Per the Matrix report on Integrated Waste, a position of Accountant has been added to the Finance budget. In order to achieve additional cost savings,the recommendation is to temporarily charge a portion of Deputy Director's salary to the refuse account until the Accountant position is filled in order to cover finance services currently provided. Purchasing The proposed reductions in Purchasing include the reduction of one full-time position. This reduction would leave only one employee to process all the bid and purchase order requests for the entire City. Departments would receive bid results and purchase orders at a much slower rate which in turn would greatly impact Departments ability to get their work completed. hi addition work out to Vendors would be a much slower rate since work is not authorized to begin until a purchase order is awarded. Unfortunately again in a down economy this is not what is needed to help businesses survive. There will also be a reduction in service to the Low Income Rebate Program as this position is also responsible for the processing of that program. FIRE DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Fire Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $32,621,400 Impact Statement: A reduction in force of this General Fund Budget Total: $32,621,400 magnitude coupled with the loss of 19 positions last 8% Reduction Target: $2,609,712 year will result in decreased service in all aspects of Department Recommendations Total: $2,666,227 the Fire Department's responsibilities. Full Time Department Employee Total: 191 Proposed 1st Tier Employee Reduction: -3 Proposed 2nd Tier Employee Reduction: -7 Full Time Employee Total: 181 1st Program Ongoing Budget Reduction Plan Impact Positionil Tier Savin s Chan , 1 Grant SAFER grant, UASI and RCPG Already included in current budget Credits -1,450,000 credits Community Loss of Fire Prevention Officer will impact number of 2 1 Reduction -70,722 Eliminate 1 vacant position annual inspections. Fire&3 Rescue Unfunding two P1 Firefighters will have an impact on 2 Operation -283,314,Eliminate 2 vacant positions safety services. Subtotal -1,804,036 Subtotal -3 Tier Program o Savings emu`gefRiaductfon Plan Im' 1 Grant Credit _100 000 Grant funding Savings from RCPG 2 Risk Community Loss of Code compliance Officer and Fire Plans 2 Reduction -149 724 Eliminate 2 osition Examiner will impact inspections and projects. 3 Fleet& Loss of Equipment Mechanic I will impact proactive -1 E ui ment -45,839 Eliminate 1 position maintenance and inspections. Fire& 4 Rescue Loss of four P-1 firefighters impacts safety services. -4 O eration -566,628 Eliminate 4 positions Subtotal -862,191 Subtotal -7 Total -2,666,227 Total -10 x CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Michael J. Conrad, Fire Chief DATE: August 23, 2010 SUBJECT: 8% Budget Reduction Summary This memo is a follow-up to our meetings of August 12"'& 17`h where we were requested to provide a comprehensive proposal that identifies an 8% reduction in expenditures for fiscal year 2010/11 and extending into fiscal year 2011/12. The reduction in staffing that this shortfall requires will have negative effects on the Fire Department's ability to provide the level of protection that is currently expected. To reduce costs by this amount requires a reduction of 11 positions within the Fire Department. As discussed, the reductions in staffing will be accomplished through attrition if possible,with layoffs only occurring if the attrition rate is not adequate to meet our cost reduction requirements. This reduction in force, coupled with the loss of 19 positions last year will result in decreased service in several aspects of the Fire Department's responsibilities. As a group of fire professionals, we will continue to provide the highest level of service possible with the personnel and equipment that is available to us. But there is no doubt that the margin of safety that presently exists will decrease with fewer fire personnel on duty. The following is an analysis of the reductions in staffing required to meet the potential budget reduction of $2.6 million along with an explanation of the consequences associated with those reductions. Reduction in Fire & Rescue Operation Program The level of reductions required of the Fire Department will result in the elimination of 6 safety positions. This will result in three additional engine company operating with a staff of three personnel, which is below the four-person staffing level recommended by the National Fire Protection Administration (NFPA). Recent studies show that this reduction from four personnel to three on a responding fire unit reduces efficiency during emergency operations by 25% or more. This loss in efficiency during critical operations Page 1 of 3 is a contributing factor to increased property loss due to structure fires, and increased mortality rates in both fire and medical related emergencies. The effect of this reduction is compounded by the previous elimination of 12 firefighter positions that was necessary to balance the City's 2009/10 budget. Collectively, these reductions in force will increase the chances of fire extending beyond the structure of origin and spreading fire to other structures in a neighborhood or district. This could be particularly problematic during high-wind events, which are common in San Bernardino. Wildland firefighting capabilities will also be negatively affected as fewer personnel will be available for initial and sustained attacks at critical points in the fire's growth. Recent studies show that a reduction from four personnel to three on a responding fire unit reduces efficiency in wildland operations by over 40%. These same studies show that this decreased efficiency on initial fire attacks results in a substantial increase in fire losses and total fire suppression costs. Although the use of mutual aid will assist in this area, it must be noted that the normal delays in receiving such aid will reduce overall effectiveness. Reductions in fire ground staffing such as these have been shown to increase firefighter injuries. Reduction in Community Risk Reduction Program The Community Risk Reduction Program will not be able to continue the same level of service that the community has been provided the past nine years. We believe that largely due to strong enforcement of state and local fire prevention laws the number of fire calls has been reduced from 4,039 in 2000 to 3,189 in 2009 (21 percent reduction). Since 2002, the fatality rate has been sharply reduced. Additionally, thousands of occupancies that were not inspected previously are now inspected on an annual basis. The fire prevention team has been able to provide rapid response to complaints received and have also run successful new programs such as the Juvenile Fire Setter program. Eliminating and shifting personnel will result in reductions of service as follows: • With the elimination of a Fire Prevention Officer the number of Fire Code Permit inspections completed annually will be reduced. Some of the inspections will be accomplished by assigning them to other Prevention Officers and/or paying a minimal amount of overtime to accomplish the work. It may result in an undetermined loss of revenue. The time interval between inspections will exceed the one year time period currently being realized. Additionally, loss of this position will increase the response time to complaints and requests from other city departments. • Elimination of one Code Compliance Officer will increase the time required to complete multi-family complex inspections. Additionally, response to complaints from other city staff and the public will take longer to resolve. This code compliance officer also assists the department in preparing the documents pertaining to Hearings on the closure of structures. • Eliminating the Fire Plans Examiner/Systems Inspector will result in the loss of the city's "one stop shop" concept. With this reduction the fire department will not have sufficient staff to physically assign a person to the Development Services Department. Overall coordination between the two departments will also suffer. Page 2 of 3 The turn around time for construction plans could increase to 30 days or more for the first submittal. Additionally, construction site inspections will no longer be scheduled for the next working day; the time frame would increase to three working days or more. Reduction in Fleet & Equipment Program The loss of a Mechanic 1 position will reduce the repair shop staffing from 4 to 3 mechanics. The Mechanic 1 is responsible for the maintenance and repair of all of the light duty vehicles (approximately 50) in the fire fleets of San Bernardino and San Manuel FD. The loss of this position will require that much of the repair work be contracted to private repair and maintenance companies at an estimated cost of$10,000 annually. The loss of this position will seriously reduce the proactive maintenance and inspection process and degrade our vehicle care to reactive; fix it when it fails. It also will have an undetermined effect on our ability to fulfill our contract responsibilities to San Manuel FD for the maintenance and repair of their fleet. Budget Proposal-Tier 1 8%Reduction Recommendations Description #of Annual Cost Savings Positions Savings from the SAFER Grant $ 1,300,000 Savings from the RCPG $ 100,000 Savings from the UASI Grant - - $ 50,000 Eliminate-Firefighters (vacant) 2 $ 141,657 $ 283,314 Eliminate-Fire Prevention Officer 1 $ 70,722 $ 70,722 (vacant) Total Reduction: $ 1,804,036 Note: The figures are based on full year salary and benefits. Budget Proposal-Tier 2 8%Reduction Recommendations Description #of Annual Cost Savings Positions Savings from the SAFER Grant-2d $ 0 Savings from the RCPG - - $ 100,000 Eliminate-Firefighters 4 $ 141,657 $ 566,628 Eliminate-Code Officer 1 $ 67,654 $ 67,654 Eliminate-Equipment Mechanic 1 1 $ 45,839 $ 45,839 Eliminate-Fire Plans Examiner 1 $ 82,070 $ 82,070 Total Reduction: $ 862,191 Note: The figures are based on full year salary and benefits. Page 3 of 3 HUMAN RESOURCES DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Human Resources Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $7,412,000 398 General Impact Statement: The suggested cuts represent $ 8/o Fund Budget Total: $ ,900 reductions that impact, employees, retirees, injured 8 Reduction Target: $398,872 Department Recommendations Total: $403,300 workers, and the community. Full Time Department Employee Total: 13 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 13 1st Ongoing Position Tier Program Savings Budget Reduction Plan Impact Change I 1 Workers -$58,200 Eliminate Employee Assistance Program not available to employees. Comp Program 8 operation costs 2 Liability -$150,000 Reduction in insurance Potential increase in liability claims. rerm ms Human Water Department to pay for additional costs and reduce 3 Resources $53,900 Reduction in M8O operation costs 4 Misc -$141,2001 Reduce reserve at BICEP Reduction of reserves from insurance pool. Total -$403,300 Total 0 CITY OF SAN BERNARDINO x INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Linn Livingston, Director of Human Resources SUBJECT: Human Resources Budget Reduction Summary DATE: August 23, 2010 The Human Resources Department was directed to compile a list of reductions equal to approximately 8% of our overall budget. This list of reductions was extremely difficult to compose and will have significant impacts on service levels to both City employees and the community we serve. Below is a summary of our contingency budget with the most adverse actions. I am neither endorsing this plan nor am I recommending its adoption. ➢ Eliminate Emniovee Assistance Program This is not a mandatory program; however, during times of economic crisis utilization of EAP services tends to increase significantly. Impact Programs eliminated will reduce ability to assist with critical incidents, family counseling, employee morale and productivity. In addition, failure to provide immediate service will impact the City-sponsored health care plan and place the city at risk with unidentified safety issues. ➢ Reduce Costs in Outside Attorney Litleation Reduce litigation by handling all settlement conferences including mandatory settlement conferences and lien trials with workers' compensation staff for non-represented applicants. Impact Reducing litigation costs could severely compromise the investigation and the defense of workers' compensation claims. Without timely and appropriate review, the City could be placed in the position of paying unmeritorious claims which would increase City liability and related costs. ➢ BICEP Revenue The City requested that BICEP release reserves from the insurance pool in the amount of $141,200. Impact The release of funds from our insurance pool will reduce funding levels for litigation claims, which may create a funding shortfall and require the City to pay additional premiums. 1 INFORMATION TECHNOLOGY DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Information Technology Department FY 2010.11 Proposed General Fund Reductions Budget Summary Total: $4,827,700 General Fund Budget Total: $3,566,800 Impact Statement: Reduce efficiency in managing IT 8% Reduction Target: $285,344 needs of organization and create greater risk of down Department Recommendations Total: $286,040 time for departmental and city-wide applications. Full Time Department Employee Total: 17 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 17 Ter Program,, - ong ons Budget Reduction Plan Impact e GIS/Office Eliminate maintenance& Any future Office upgrades will require repurchase of all 1 -$27,380 operations costs and support desktop computers licenses, maintenance will completed Automation software on time and material. Public Eliminate maintenance& Certain maintenance will be done on a time and material 2 Safety -$164,110 operations costs and support basis and not covered under contract software _ Client Eliminate maintenance& Reduce efficiency of networking division,ability to keep 3 -$10,000 operations costs and support up with network growth, and remote access for City Services software employees. Network Eliminate maintenance& Reduce efficiency of networking division, ability to keep 4 -$37,000 operations costs and support up with network growth, and remote access for City Services software employees. 5 Business -$27,550 Reduce capital&maintenance Impact staff expertise in new technology. Systems casts 6 1 Print Shop -$20,0001 Reduce M&O Review alternate methods of duplication services. Total 4266,040 Total 0 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: June Yotsuya, Interim Director of Information Technology SUBJECT: Information Technology Department 8%Reduction Budget Summary DATE: August 23, 2010 The Information Technology (IT) Department is an internal service department that provides technology services to all of the City operating departments, including the Police and Fire departments, as well as the Water Department. As an internal service, IT does not provide services directly to the public; but instead, maintains and supports the technology infrastructure and tools used by departments to provide services to the public. As a result, any reductions in the IT budget will indirectly impact all City departments and their ability to provide key services to the residents. Resident services that rely heavily on technology include police and fire, code enforcement, building permits and inspections, refuse, parks and recreation, and animal control. It is important to note that the technology support programs of the department experienced a 19 percent reduction in positions (21 to 17) over the past three years while the variety and amount of technology supported by the department continued to grow. The proposed budget reductions are primarily in the following areas: maintenance contracts, equipment replacement and supplies. Some maintenance contracts for both software and hardware would be reduced or eliminated and expenditures for computer equipment and supplies would also be reduced. The effects of the proposed reductions would increase system down time due to reduced maintenance contract coverage, a decrease in productivity due to the use of out-of-date and unsupportable software, and a decrease in reliability due to use of equipment that has exceeded its useful life. The proposed cuts would result in reduced productivity for all City departments, and this in turn would result in a reduced quality of service to the residents and businesses of San Bernardino. 1 LIBRARY DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Library Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $2,259,100 General Fund Budget Total: $2,259,100 8% Reduction Target: $180,728 Impact Statement: Impact to library services including Department Recommendations Total: $180,370 fewer new materials and public computer access as well slower processing times at information and check out areas. Full Time Department Employee Total: 20 Proposed 1st Tier Employee Reduction: -1 Proposed 2nd Tier Employee Reduction: -1 Full Time Employee Total: 18 Reduction in Part-Time 1st Program Ongoing Budget Reduction Plan Impact Position Tier Savings Change 1 Libra -$22,900 Reduction in PT Impact to support services 2 Library -$55,350 Reduction in M&O Fewer new materials and public computer access, postage for direct mailers and maintenance Loss of Coordinator will have impact on program 3 Library $62,560 Eliminate 1 vacant position 1 activities Subtotal -$140,810 Subtotal -1 u. r , Ins Budget Reduction Plan """ "" Impact 11 Libra -$39,560 1 Eliminate 1 position Loss of Office Clerk will impact to support services 1 Subtotal -$39,560 Subtotal -1 Total 4180,370 Total -2 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM UA k IN TO: Charles E. McNeely, City Manager FROM: Deborah Kaye Clark, Interim Library Director SUBJECT: Library 8%Budget Summary DATE: August 23, 2010 In July of 2001,the City of San Bernardino passed a budget that supplied a record $3,000,000 to the San Bernardino Public Library. That budget included$204,000 for books and salaries that supported a 60 hour operation at Feldheym Library and 40 open hours at each of the three branches. Over the course of 10 years, that budget was reduced in both dollar amount and spending power as the city began its downward economic spiral. Currently, under the library's proposed steady state budget, the system is beginning to reorganize and regroup after a drastic reduction of 37%operational costs and 47%reduction in full time personnel. However, a further reduction of 8%will result in the elimination of two additional full time positions at the Feldheym Central Library, both public service positions, bringing the total loss of full time positions to The vacant position was a Program Coordinator intended to provide create, coordinate,promote and conduct programming at the Central Library. This position was key to a major goal to promote the Central Library to families. Also eliminated was the position of Office Clerk for the Reference Division and$20,200 in part time salaries. These losses will result in longer lines in the check out areas, slower processing of magazines and periodicals and longer lines at the information desks. The book budget for the system, already a minimal amount of$36,300, is reduced by another 45%, leaving only$20,000 for books to cover a central library and three branches. As technology needs within the community increase, the ability of the library to provide Internet access and job search capabilities for the public are reduced through a$30,000 reduction in the equipment replacement account. Earmarked to upgrade aging computers, replace damaged 1 screens, add headsets to computer stations increasingly used for streaming video presentations related to training and job searching, the elimination of these funds find us once again providing less effective service to fewer residents. The end is a loss to the education of a community, and embittered public who feel their city has let them down and a further economic impact through lost jobs and more limited access to job search tools. Additional reductions for this $180,000 package include elimination of postage earmarked to fundraising for this year; elimination of office equipment maintenance contracts in the hope that equipment will remain functional and the elimination of two of the three public photocopiers at the Central Library. 2 MAYOR'S DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Mayor's Office FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $734,900 General Fund Budget Total: $734,900 8% Reduction Target: $58,792 Department Recommendations Total: $58,800 Full Time Department Employee Total: 5 Proposed Full Time Employee Reduction: -0 Full Time Employee Total: 5 let Program Ongoing Budget Reduction Plan Impact Position l Tier Savin s ! Change In the absence of the City having a full-time grant writer, the Mayor's Office has used its contractual services Comm Eliminate all contractual services money to hire consultants to prepare grant applications. 1 Safety/Env -58,800 used to prepare grant This past fiscal year, this money was used to prepare and applications. successfully obtain over$850,000 in grant funds for police and public safety, and over$375,000 in grant funds for environmental projects/programs. Total -$58,800 Total 0 PARKS, RECREATION & COMMUNITY SERVICES DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Parks, Recreation and Community Services FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $7,021,500 Additional cuts will impact department's ability to provide General Fund Budget Total: $5,379,800 quality programs and services to youth, adults and seniors 8% Reduction Target: $430,384 that are vital to the current and future quality of life to the Department Recommendations Total: $435,000 San Bernardino community. Full Time Department Employee Total: 59 Proposed 2nd Tier Employee Reduction: -3 Full Time Employee Total: 56 Includes Reduction in Part Time 1st Program Ongoing Budget Reduction Plan Impact Position Tier Savings Change Shift of funding for Operation Impact on programs for the community, especially youth. 1 Community -$170,000 Phoenix, elimination of City OP funding will be supplemented by federal grant, Programs services for Norton Galaxy services at Norton will be provided by Public Safety Center Academy. 2 Baseball -$100,000 Eliminate maintenance support Responsibility to shift to owner of stadium. Stadium for stadium 3 Admin/ -$20,000 Reduction in PT Impacts to service delivery. Parks Subtotal -$290,000 Subtotal 0 Item Program S violas Budget Reduction{ 1 CID -$25,000 Convert FT CID Manager to Impacts to administrative support for department. 1 contract PT manager Eliminate 2 park maintenance Restructure park maintenance delivery and reduce 2 Park Maint -$120,000 supervisors; or 1 supervisor and services to youth. -2 close Delmann Heights Subtotal 4145,000 Subtotal -3 Total 4435,000 Total -3 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Kevin L. Hawkins, Parks,Recreation&Community Services Director SUBJECT: Parks, Recreation& Community Services 8%Reduction Budget Summary DATE: August 18, 2010 Since July 2008, the Parks, Recreation & Community Services Department has experienced a 32% decrease in staff due to budget reductions. Given these reductions, staff is to be commended for their commitment to providing the best level of services with limited resources. For comparison purposes, it should be noted that the proposed budget maintains the current ratio of 1 maintenance worker for every 60 acres of park whereas the industry standard is 1 worker for every 10 acres. The revised plan to accommodate an 8% reduction in additional cuts to the proposed budget will still severely cripple the Department's ability to provide quality programs and services to youth, adults and seniors; services that are vital to the current and future quality of life to the San Bernardino community. The following identifies the impacts of that plan in both the General Fund and Measure Z General Fund allocations for a total of $435,000. Although the plan delineates the actions that will be necessary to incorporate the reduction into the department's programs, services and activities, I am neither endorsing, nor am I recommending the adoption of this plan. Community Programs The implementation of all the actions included in the reduction plan will result in either the shifting of funding sources for some of the community centers to non-General Fund sources and/or the reduction of City sponsored activities at some of the community centers. Below is a brief summary of the impacts to each community center. Delmann Heights Center Terminating the City administered programs at this center will involve discontinuing the current contract with the Boys and Girls Club. Unlike the community centers that are solely operated by recreation staff, Delmann Heights is open Monday through Friday; this Center averages approximately 1,400 participants per month during the regular season and can peak to 2,400 participants per month through the aquatics and other enhanced activities during the summer. The termination of the agreement and the resulting closure of the City portion of the center may 1 create safety and blight issues that may also impact the County Headstart program that is directly adjacent to the community center. Galaxy/Norton Recreation Center Currently subsidized by the Public Safety Academy (PSA), this center will have the City's only part-time employee working at this center eliminated. This will result in the elimination of all recreational programs; making it a rental facility. This will remove any City presence from the Norton Galaxy and require the liaison with PSA, and any rental customers to work through the Department's main office. Operation Phoenix Centers The City currently budgets $150,000 of General Fund Measure Z funds to the Operation Phoenix Centers. Recently the City received a Federal Grant in the amount of$500,000 for the Operation Phoenix programs that can be used to replace the General Fund Measure Z dollars for two years. There should not be any negative impacts to the current programs at the Operation Phoenix Centers as a result of this funding source change. Center for Individual Development Program In order to maintain the Center for Individual Development (CID) community center programs for people with disabilities, The Friends of CID continue to subsidize its operations by providing $100,000. The plan to meet the 8% reduction involves eliminating the Center Manager position and converting the management of the program to a part-time position. This disruption of the management may prove harmful to the long term relationships established between the County, school district and special needs community; however, the Department will seek to mitigate the impact by contracting with the existing manager on a part time basis. Parks Maintenance Program In order to meet the 8% reduction target, the Parks Maintenance program will not go untouched. Although the need for significant additional funding (to restore acceptable staffing levels to city parks) and alternative/supplemental staffing (such as Glen Helen workers, volunteers, etc.) are essential, the elimination of one (1) supervisor position (through attrition or retirement) and part time hours is proposed. One option that can be considered is the elimination of a second supervisor position instead of the closure of the Delmann Heights Center. This option would even further reduce Park's ability to maintain the City's park areas but it would stop the closure of a recreation center. This measure mitigates the need to explore further measures, such as outsourcing both LMDs and City Parks this fiscal year; however, the aforementioned need to reduce park maintenance staffing ratios from 1 to 60 closer to the industry standard of 1 to 10 remains, in order to improve current service delivery remains. Baseball Stadium Agreement The reduction plan includes eliminating the General Fund contribution for maintenance at Arrowhead Credit Union Park. The funding for this program will have to be shifted to either the 2 entity that owns the property (the Redevelopment Agency) through a renegotiation of the current Agreement between the Stadium, City and Agency. Administration The elimination of part time hours, which were used to supplement administrative staffing throughout the Department. Although the City's efforts to improve the website may help in mitigating some of the anticipated reduction in service delivery, all Divisions remain dangerously thin(in staffing) since the 32% staffing reductions in FY 09/10. 3 POLICE DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Police Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $66,804,300 General Fund Budget Total: $63,880,300 Impact Statement: Impacts to civilian staffing and 8% Reduction Target: $5,110,424 police officer staffing levels. Department Recommendations Total: $5,093,160 Full Time Department Employee Total: 529 Proposed 1st Tier Employee Reduction: -23 Proposed 2nd Tier Employee Reduction: -27 Full Time Employee Total: 479 1st Program Ongoing Budget Reduction Plan Impact Position Tier Savings _ Change Will allow the hiring of a civilian management professional with experience in municipal finance and Reclassify Police Captain to personnel administration. This is a common 1 General -$80,890 Civilian Manager, reclassify management position in similar sized agencies and Investigtn Forensic Manager to Property creates a civilian career path for upper management in Supervisor addition to the cost savings involved. Grants management and personnel management should be enhanced. Reclassify 2 Rec Supervisors to Records function currently has 4 supervisors assigned, CSO I, Eliminate 1 Admin although the overall staffing for records has been 2 Records $63,370 support position, upgrade payroll reduced from previous personnel reductions. This -1 to Adm Analyst I change will provide a more functional ratio of supervisors to technician personnel as they currently exist, as well as a cost savings from the reclassification of the positions. 3 Records -$145,000 Eliminate 3 vacant positions Reduction in Records Tech I positions as part of -3 reorganization of records operation 4 Patrol Field -$1,700,000 Elimination of 17 vacant Police -17 Services Officer positions Currently held vacant in FY10-11 budget. Eliminate 8 vacant Police Officer 5 Patrol Field -$463,300 positions of which 6 vacancies 8 Police Officer positions affected, however 6 vacancies -2 Services will be converted to CSO to converted to CSO positions positions Subtotal -$2,452,560 Subtotal -23 2n Ongoing Budget Reduction Plan Impact Position d Program Tier Change 1 Patrol Field $2,640,600 Eliminate 27 Police Officer _27 Services positions Impact delivery of police emergency services Subtotal $2,640,600 Subtotal -27 Total $5,093,160 Total -50 CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM To: Charles E. McNeely, City Manager From: Keith Kilmer, Chief of Police Subject: 8% Budget Reduction Proposal Date: August 23,2010 Pursuant to your request to provide budget reduction options to attain an 8% overall savings in the Police Department General Fund, equivalent to $5,093,160, the following personnel reduction strategies (table below) are realistically the only method to achieve such a dramatic cost reduction. As a result of cuts there will also be certain known and unknown service impacts, depending on the level and extent of any reduction in the police department workforce. These potential impacts are briefly summarized below. Description Amount Amount Amount Reclassify Police Captain to Civilian Manager $73,000 Reclassify 2 Records Supervisors* to CSO I $35,000 Eliminate(3)Records Tech I vacant positions $145,000) Eliminate 8 vacant Police Officer positions $782,400 Eliminate 1 Senior Office Assistant $44,856 Add 6 CSOI positions $319,099 Reclassify Forensic Manager* to Property Supervisor $7,884 Upgrade payroll to Admin Analyst I $16,488 Eliminate 27 Police Officer positions ($2,640,600) Preliminary budget reduction total ($5,093,160) TOTAL SAVINGS ($5,093,160) *Currently filled position Summary of potential impacts from police department personnel reductions above: Civilian staffing levels have been reduced to critical levels at this point as a result of previous budget savings measures. Under the above scenario, sworn officer staffing would be reduced by eight police officer positions. THE SBPD IS COMMITTED TO PROVIDING; PROGRESSIVE QUALITY POLICE SERVICE; A SAFE ENVIRONMENT TO IMPROVE THE QUALITY OF LIFE; A REDUCTION IN CRIME THROUGH PROBLEM RECOGNITION AND PROBLEM SOLVING Budget Reduction Proposal for FY 2010/11 August 23, 2010 While the budget reductions will impact police services, the streamlining changes recommended will mitigate some of the potential impacts. The potential impacts are listed below: • Currently 17 police officer positions are being held vacant in the FY `10/11 budget approved by Council. To meet the 8%reduction,these positions will need to be eliminated. • The(3)Records Tech positions to be eliminated are currently being held vacant. • Service levels for investigative and administrative functions may be impacted, reducing the ability to respond timely to interdepartmental, interagency and public requests, and increasing levels of dissatisfaction with service. • Eliminating eight of the currently vacant police officer positions should not reduce services below current levels. • COPS hiring grant requirements or restrictions will need to be addressed. • A reduction in police call takers may increase response time to priority calls. • The addition of the(8) CSO positions will minimize the impact of the reduction of officers by adding report takers to the field. Increasing professional staff to augment police response is consistent with the recommendations in the Management Partners' Study. There are likely additional financial and non-financial impacts to such a proposal. Please contact me with any questions. PUBLIC WORKS DEPARTMENT FY 2010-11 PROPOSED 8% REDUCTION PLAN Public Works Department FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $47,422,600 General Fund Budget Total: $8,784,600 8% Reduction Target: $702,768 Impact Statement: Service levels to public will be Department Recommendations Total: $834,809 impacted in conjunction with the operational impacts to City departments. Full Time Department Employee Total: 216 Proposed 1st Tier Employee Reduction: -2 Proposed 2nd Tier Employee Reduction: -5 Full Time Employee Total: 209 Proposed Part Time Reduction: 3 f going Budget Reduction Plan Impact Position Tier ins Change 1 PW/IWM $250,000 Renegotiate contract with IEE Savings estimated with new recycling contract Eliminate 2 vacant positions and Additional duties absorbed by remaining mechanics, 2 Fleet $142,800 reduce M &O reductions in fuel and operating costs, outside vehicle -2 maintenance and other expenses. Charge for Neighborhood Clean- Eliminate support for free neighborhood clean-up events 3 Streets $20,000 up Events which cost approximately$20,000 per year in dum /waste fees and overtime. Less material purchases, decrease in Santa Fe contract, 4 Facilities -$109,800 Reduction in M &O decrease electric usage, eliminate copier contract and outside cleaning contract for parking structure. Subtotal 4522,600 Subtotal -2 77 Impact Position Surveying work now performed by a Sr. Survey&Survey Eliminate the in-house survey Technician can still be provided by contract with the costs 1 PW/Eng $116,800 unit from the Capital Projects charged directly to a CIP project.Any survey requests 2 Program from other departments or for non-CIP project will require an identified funding source. Eliminate 2 Custodial positions, Reduction in service to Carousel Mall, Library&City Hall and in M &O due to loss of 2 custodians and 3 PT 2 Facilities $195,410 1 Maintenance Mechanic and 3 reduction in PT positions personnel. Reduction in mechanic services with loss of one maintenance worker. Subtotal 4312,210 Subtotal -5 Total -$834,810 Total -7 CITY OF SAN BERNARDINO �]Y INTEROFFICE MEMORANDUM TO: Charles E. McNeely, City Manager FROM: Randy Kuettle, Acting Director Public Works Department SUBJECT: Public Works Department 8%Budget Summary DATE: June 30,2010 The following is the Public Works Department plan to achieve an 8% reduction to the General Fund. Of the Department's $47,422,600 operating budget, the impact to the General Fund is $8,784,600, resulting is a reduction target of$702,768. The proposed cuts center on reductions in personnel, public services, facility maintenance, support to the Metrolink and Santa Fee Depot, fleet maintenance, and engineering. These measures will have a dramatic impact on services provided to the public, as well as services currently provided to City departments. Integrated Waste Management Administration: The reduction plan includes renegotiation of the City's recycling contract with IEE. Anticipated savings will be realized by readjusting recycling program requirements and methodology. Fleet Maintenance Program: The reduction plan eliminates two vacant Equipment Mechanic positions. The duties of the Equipment Mechanics will be absorbed with the mechanical staff remaining in Fleet. This will result in department vehicles not receiving timely service and repairs estimated at a reduction of 20%. Compliance with Department of Transportation and California Highway Patrol Biannual Inspection of Terminal Program (BIT)will be further impacted. These reductions cover additional cuts to operations material accounts and fuel usage as result of other City Department personnel and service reductions. The fleet usage from each department will vary depending on the reduction of vehicles not in service. Capital Projects Program: The reduction of an in-house survey unit from the Capital Projects Program budget will have minimal impact to the program. Surveying work can still be provided by contract with the costs charged directly to a CIP project. Many of the projects assigned to consultants will incorporate the services as part of their project scope. It will be more efficient and cost-effective to use I survey consultants on an as-needed basis to provide survey services in support of in-house design efforts. Street Maintenance Program: The reduction plan eliminates funding used to support neighborhood clean up events. As a result, event organizers will be required to generate sufficient funds to cover the costs associated with this service including staff overtime and dumping fees,which have been waved in prior years. Building/Custodial Maintenance/Utilities Program: The reduction plan eliminates one Maintenance Mechanic, two full time Custodians, and three part-time Custodians. The duties for the Maintenance Mechanic will be absorbed by the remaining staff resulting in a 20% reduction in response times to building maintenance requests. The requests are categorized as emergency,priority, and regular. Staff will respond to the highest status request first and make the necessary repairs, resulting in facility maintenance being deferred throughout the year. The process of deferring maintenance will advance facility deterioration, increasing future costs. The reduction in Custodial staff will result in a 25% reduction in cleaning and maintenance services at all City facilitates. City staff is also considering a proposal that will result in EDA to contracting with the City for custodial and maintenance services at their facility. The reduction plan to cut utility costs will be achieved by adjusting thermostat settings at all City facilities. The thermostat points will be moved up two degrees in the summer and down two degrees in the winter. In addition, heaters and air condition will be turned off on Saturdays and Sundays on all floors of City Hall. Staff is also looking into the prospect of charging the Water Department for operating on City Hall Friday closure days. 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Penman, City Attorney Subject: Proposed City Attorney O c ]ect: Final Pro e Budget For FY 2010/2011 I P Date: June 30, 2010 Attached please find the final proposed budget from this office for FY 2010/1011. This is not the 15% decreased budget amount. This is the amount we request even if additional reductions are not found to be necessary. Because this office has no control over how many lawsuits will be filed in the next fiscal year it is not possible to reduce the proposed Outside Counsel costs line item by more than $125,00 and the Litigation Costs line item by more than $40,449. We have made those reductions. --- —`I1wDWothertne7itemnhat cauld-lye-reduced to-re-Aizu-xi5'/o reductinrrwould-be-in-personmel - — - - costs. However, any such reduction would result in the immediate necessity to farm out to outside counsel numerous existing law suits. The cost of the outside counsel would significantly exceed the money saved by the personnel reductions. Lawsuits cannot"sit and wait' to be defended. They must be defended aggressively. Failure to file motions in court,to make any court appearance or to be ready for trial will result in sanctions and then the entries of default judgments against the City. For example, if we had failed to make any appearance in the Flesh Club case, failed to file any motions or required responses, or failed to appear ready for trial,that case would have been lost instead of won. The City would have faced an immediate demand to pay over$2.4 million including the judgment,post judgment interest and attorney fees. The amount of$2.4 million is approximately 65% of the entire proposed city attorney office budget. We have obtained the now estimated 8%necessary budget reduction by the combined$165,449 reduction in outside counsel and litigation costs and by adding one ACP Enforcement position. This position will result in an approximately$200,000 increase in fines and penalties for the general fund for FY 2010/2011. After subtracting the salary, including benefits of the additional position the net increase to the general fund will be $136,687. III MEMORANDUM TO: James Penman, City Attorney FROM: John Wilson, Sr. Asst. City Atty/�v SUBJECT: Application of Budget Reduction DATE: June 30, 2010 This office has been advised to prepare a budget reflecting a possible 15%reduction in the amount proposed to be budgeted in fiscal year 2010/2011. The reduction equates to $566,505. It was originally proposed that$466,505 be deducted from Account No. 5503, Litigation-Outside Attorneys. The remaining$100,000 would be deducted from Account No. 5177, Litigation Expenses. We are now advised that the reduction is more in the range of 8% or $302,136. As discussed, if an additional ACP Enforcement Position is added to the budget at a cost of$63,313, and that position generates $200,000 in new revenue, it will be necessary to reduce the Litigation - outside attorney account by $125,000, and the Litigation expenses account by $40,449 to accomplish the 8% adjustment. The sums contained in the proposed budget are based on projections of future costs of current litigation provided by the outside attorney's presently handling these matters for the City. The number in the proposed budget is actually$330,000 less than requested. With a further 8% reduction,this office will experience a$455,000 under-funding of the money needed to properly service the City. It is recognized that these projections may ultimately prove to be higher or lower than the actual costs and are subject to some adjustment on that basis. However, it is a -given-that-new litigation - --— $ gation wril be-eomm�nce�agaz`n�the�ty unng a scal year which will change these cost estimates. These costs, like workers compensation, costs of basic utilities, and bonded indebtedness, are not amenable to regular budget reduction practices in the short run. Reductions in staff or other aspects of City Attorney Office operations represent false economies in that anticipated revenues would be lost and/or the costs would continue to be realized elsewhere. To the contrary, the longer term budget solution for the Office is to hire one or more additional attorneys and support staff to perform work in-house. The money must be available when needed. Proceeding on the basis that it will not is problematic in terms of successfully resolving cases. However, in accounting for expenditures for outside attorneys and litigation expenses, it may be a better practice to accept reasonable projections of the costs and to book them to the departments whose activities give rise to the expenditures. True costs of operations of the department are thereby documented and an important information loop between operations and costs is created. EXPENDITURE BUDGET LINE ITEM DETAIL I� FISCAL YEAR 2009-2010 / 89,p QeJ'vt f,'aN 4 .44 A/9:4.1 PO FDRD 001 GEMERAL FOND DIVISION 051 CITY ATTORNEY Fro P.J k ACCOUNT OSOECL A TITLE ACTUAL 2006-07 ACTUAL 2007-OB PROSBCTED 2006-09 ADOPTED 2009-10 ?,D/,p i 5011 SALARIES PERM/FUL.LTIME 1,674,915 1,841,045 1,544,7716 ' 8041- 5013 AUTOMOBILE ALLOWANCE 4,500 5,700 .6000 6,300 j 5014 SALARIES TEMP/PARTTIME 76,176 96,056 91,213 dB�s'e- /'?37 SOD 5015 OVERTIME 345 1,997 5,516 3,000 5026 PERS RETIREMENT 243,357 343,012 371,488 . 361,200 5027 HEALTH 6 LIFE INSURANCE 186,290 194,597 213,824 221,400 u 5028 UNEMPLOYMENT INSURANCE 4,39D 4,862 4,869 4,700 L" 5029 MEDICARE 25,540 28,305 28,436 27,100 [ TOTAL PERSONNEL SERVICES 2,215,514 2,515,573 2.566,122 -2�2isT06' t( f I; �4•� 5111 MATERIALS 6 SUPPLIES 12,345 11,779 16,056 30.-000 /(>r000 5112 SMALL TOO--S 6 EQUIPMENT 0 0 0 1,100 512: ADVERTIS:::: 6,511 0 D 4,400 5122 DUES 4 SUBSCRIPTIONS_' 11,356 11,397 9,720 14,000 5123 LIBRARY BOORS 73,553 B8,765 87,606 75,000 51:3: MILEAGE 95 0 108 300 5132 MEETINGS - CONFERENCES 4,463 6,691 8,375 .5-DD'D 3, 04. 5133 EDUCATION. 6 TRAINING 10,837 7,994 2,599 1,14)0 11? uo 0 5 17i RENTALS 5,530 4,910 5,892 -& D G� 2d0 5172 EQUIPMENT MAINTENANCE 4,353 3,679 2,904 91000 5114 PRINTING CHARGES 6,061 61956 11,828 1i.SO41 (,a�0 T 5775 POSTAGE 51159 9,598 6,576 7,000 5176 COPY MACHINE CHARGES 4,336 81881 11,075 11,100 5177 LITIGAT:DN EXPENSES 162,586 158,157 292,864 X38:-690 IQ�/ /S� 5183 MANAGEMENT ALLOWANCE 35 - 90 88 600 TOTAL 14AINTENANCE_q OPERATION_ 309.220 313,897 455,692 439r300 5502 PROFESSIONAL/CONTRACTUAL SVCS 6,603 910 6,167 61000 '_! V 5503`LITIGATION-OUTSIDE ATTORNEYS 556,163 637,554 558,024 J88-DD0 Sy 51 EDO 5505 OTHER PROFESSIONAL SERVICES 0 140 . 1,147 1,000 TOTAL CONTRACTUAL SERVICES 564,765 638,604 565,338 ml 0.0 562/ �d f 5601 GARAGE CHARGES 2,535 863 400 600 5609 IT CHARGES IN-HOUSE 2.700 2,500 1,400 2,800 5605 TELEPHONE SUPPORT 8,981 6,342 - 4,400 - 4,400 -}f 5610 COMMUNICATION SHOP 5,200 9,700 6,900 4,600 5612 FLEET CRGS FUEL 1,887 3,047 2,300 4,700 TOTAL INTERNAL SERVICE CHARGES 21,303 22,472 15,400 5702 COMPUTER EQUIPMENT 0 125 6,463 200 5704 MISCELLANEOUS EQUIPMENT 1,927 0 2,185 2,500 TOTAL CAPITAL OUTLAY 11927 125 6,647 --;9x00 �� 2 4.10 �l TOTAL 3,112,729 3,490,670 3,611,199 41&Y 3i ': Ii 1 y 51-11 recivice� �'O 4 l �- S�o3 63 , d City Attorney's Office FY 2010-11 Proposed General Fund Reductions Budget Summary Total: $3,776,700 General Fund Budget Total: $3,776,700 8% Reduction Target: $302,136 Department Recommendations Total: $302,136 Full Time Department Employee Total: 21.5 Proposed Full Time Employee Reduction: n/a New Proposed Full Time Employee Total: 22.5 Item Program Ongoing Budget Reduction Plan Impact Position Savings Change Add 1 ACP Enforcement Position 1 Prosecution for a net increase in revenues of See Attached 1 $136,687 2 Litigation deduct$125,000 from Litigation- Outside Attorney's acct. i 3 Litigation deduct$40,449 from Litigation expenses acct. Total $0.00 Jo �W Gitil5o &/30 Positions by Program Position Program Municipal Legal Services Liti ae tion Prosecution (Incl. EDA) Attorney 5.55 3.1 1.35 Legal Secs. 1.8 1.5 1.7 Admin. Super. .3 .6 .10 Admin. Analyst 1.00 Exec. Asst. 1.00 Investigator Super. .10 .10 .8 Invest. F/T .10 .10 1.3 Invest. P/T .05 .05 1_9 Sub-Totals 8.9 5.4 8.2 Total 22.5 Few"