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C I T Y 0 F SAN B ERN A R DIN 0
INTEROFFICE MEMORANDUM
CITY ADMINISTRATO~S OFFICE
DATE: June 3, 1992
TO: Mayor and Common Council
FROM: Shauna Clark, City Administrator
SUBJECT: Fiscal Year 92/93 Budget
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I am pleased to present the fiscal year 92/93 budget to the Mayor
and Common Council.
The city is facing many challenges in financing our current levels
of service. The impact of the recession, rising number of
legislative mandates, and stagnant development over the past two
years have strained the city's fiscal condition.
Last January, in response to a weakening economy, the Mayor and
Common Council approved a series of budget reduction measures in an
effort to rebalance the fiscal year 1991/92 budget. It was
estimated that, unless such measures were implemented, the city
would end the fiscal year with general fund expenditures exceeding
general fund revenues by approximately $6 million.
In response to this anticipated shortfall, all departments were
requested to recommend a five percent decrease in their existing
budgets. These department reductions, along with a number of other
budget reduction measures, were considered by the Mayor and Common
Council. Actions taken are summarized below and include:
1. Department Reductions (5%) $1,955,000
2. Selling Police Building & cemetery toEDA - $1,996,000
($3,000,000 was total cost for police
building spread over two years)
3. EDA Pickup of Mall Security & CVB - $ 582,000
4. Interfund Transfers and Other Cuts - $1,219,000
(i.e., refuse admin. fee, transfer
street repair funds, change to semi-monthly
payroll and personnel cuts)
5. 1/2 Cent Utility Tax Increase - $ 293,000
(3 months of collection)
$6,045,000
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These actions were approved in late January 1992 and eliminated a
total of 57 positions city wide. It was also recognized at that
time many of the budget reduction meaSures were one time in nature
and that additional cuts would be necessary to balance the FY
1992/93 budget.
In March 1992, the City Administrator presented a memorandum to the
Mayor and Common Council outlining information for the fiscal year
1992/93 budget which included a preliminary analysis of general
fund revenues and expenditures. Anticipating no real economic
recovery and assuming that we staff and supply the departments at
the levels established as of February 1992 and set aside mandatory
reserves such as 186 salaries and accrued booking fees, it was
estimated that a shortfall of approximately $2.9 million could be
anticipated. A number of options were presented to the Mayor and
Common Council in an effort to close the gap. These options
included requesting all departments to further reduce their budgets
anywhere from 7.8% to 2.7% and to either eliminate or reduce
reserves. The recommendations which were ultimately approved
included:
4.
Reduce Department Budgets by 2.7%* -
Refinance City Hall -
Reduce Amount Dedicated to Repayment
of Deficit by $500,000 -
(City Hall refinance eliminated the
need for this action)
Reduce Appropriated Reserve -
(from $1,000,000 to $500,000)
Approve Additional Chargeback to EDA - $
(Maintenance of city Hall Parking structure)
$1,398,000
$ 562,000
$ 500,000
1-
2.
3.
$
500,000
5.
56,000
It is important to note that, even with these actions, it was
recognized that a shortfall in the range of $1 million would have
to be addressed by the Mayor and Common Council as part of the
fiscal year 1992/93 budget process.
* 2.7% was recommended due to the fact that it was anticipated that
this reduction could be absorbed without further layoffs.
General Fund Revenues
The 1991/92 revenue projections are very conservative. They assume
that the recession and the significant downturn in development will
continue through the fiscal year. The 1992/93 estimated available
resources are $67,838,655 and assume continuation of all existing
city revenue sources. This amount includes estimated revenues of
$65,874,616: $1.5 million which represents the second installment
expected from the sale of the police building: $637,877 in net
transfers to other funds and an estimated 1991/92 carry over of
approximately $1.1 million.
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The fiscal year 1992/93 total resources represents a two (2)
percent increase over the fiscal 1991/92 revised estimate of
$66,602,804. Revenue sources most- affected by the economic
situation are sales tax which have been reduced by approximately 18
percent and development fees which have been reduced by 27 percent.
These combined revenue sources provide 33 percent of the general
fund revenues. utility users tax reflects a slight increase over
FY 1991/92 mainly due to the action taken at mid year to increase
the rate from eight (8) percent to 8.5 percent. The majority of
the other revenue sources have not been increased.
Fund transfers to the general fund budget total $3,006,728. Fund
transfers out of the general fund budget total $3,644,605. These
two factors combine to result in the net transfer out of the
general fund of $637,877.
EXDenditures
The fiscal year 1992/93 budget is $71,231,407, which represents a
one (1) percent increase over the beginning fiscal year 1991/92
budget. Factoring in the Charter Section 186 and other mandatory
increases results in a net reduction of discretionary expenditures.
A total of 1187 full-time positions are budgeted. This is a
reduction of funding for 73 full-time positions over last fiscal
year. In keeping with this fiscally conservative approach, the
only funds included this year for annual employee compensation
adjustments will be Charter section 186 requirements budgeted at
$1.6 million.
Overall, with the exception of elections, mandatory reserves for
utility taxes and booking fees and Charter Section 186 increases,
the budget reflects a 7.98 percent decrease in the departments'
operating budgets when compared to the original 1991/92 budget. We
reduced the frequency and extent of travel and reduced meeting
attendance, as well as achieved a city-wide reduction in the use of
supplies. This budget also assumes the purchase of minimal
equipment city wide.
Equipment funding includes the first year lease payment for 24 new
police cars ($168,000), clean up of underground storage tanks in
the fire department ($40,000), funding for a computerized parking
citation issuance system ($28,000) and capital equipment for the
sewer line maintenance crew ($38,000). General fund capital
improvements will be limited to $36,378 to fund certain building
maintenance needs throughout the city. The funding source for
these capital items will be the balance of the CMO bond proceeds.
Based upon the revised estimated resources and expenditures
provided above, the estimated shortfall for the general fund will
be $3,392,752. It should be noted that this shortfall increased
over what was projected in March 1992 primarily due to revised
revenue projections, increased reserve requirements and revised
personnel figures.
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Listed below are some recommendations which have been identified in
an effort to help close this gap:
1.
2.
3.
4.
C. 5.
6.
7.
C. 8.
t 9.
10.
11.
Eliminate Appropriated Reserve -
Reduce Funding Set Aside for Charter
Section 186 -
Fund Police Overtime Costs from the
Assessment District carry Over -
Transfer Balance of CMO Proceeds to
General Fund -
Use EDA Funding for Community Against
Drugs Program -
Vacancy Factor city-Wide -
Increase Engineering Fees -
Bill EDA for Police Officer in Mall -
EDA Reimbursement for Enterprise Zone
Fee Waivers -
Apply Utility Users Tax to Cellular
Telephone Base Monthly Charges -
Reduce civic & Promotional Funding -
$500,000
$300,000
$600,000
$438,000
$ 44,500
$200,000
$250,000
$ 64,700
$100,000
$125,000
S 15.000
$2,637,200
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Additional detail is provided in the attachment which discusses
these recommendations. As noted, these recommendations will
generate $2,637,200. This will close the gap to $755,552.* It is
requested, that the Mayor and Common Council provide staff with
general pol~cy direction in terms of which programs should be
targeted for ,cutbacks. Once this direction has been identified,
the appropriate information will be developed to assist with the
decision making process.
If you have any questions on specific line items, please call Fred
Wilson, 5124 or Andy Green, 5242, prior to the budget hearing. If
you have questions on anything else, please call me at 5122.
A,~!rIC~~~
city Administrator
SC/sc
Att: 2
* continaencv Items
Preliminary estimates from the State places the amount which
the City would receive for Motor Vehicle In Lieu Fees at
approximately $5.9 million. However, only an amount of
approximately $5.4 million was included in the 1992/93 revenue
estimates. This variance of approximately $500,00 exists due
to the uncertainty of the State's budget. It is anticipated
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that the state will attempt to use a portion of the Motor
Vehicle In Lieu Fees currently paid to cities to balance the
state's budget. Therefore, it was thought prudent to reserve
a portion of the Motor Vehicle In Lieu Fees revenue for this
contingency.
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ATTACHMENT A
1.
Eliminate Appropriated Reserve --
(Council took action in March 1992 to
reduce this reserve from a goal of $1
million to $500,000 for the next fiscal
year. Although the establishment of a
reserve is highly desirable, it is
recommended that this reserve be considered
for elimination for FY 1992/93.)
2.
Reduce Funding Set Aside for Charter
Section 186 Compensation Increases -
($1.6 million was included to fund
mandated 186 increases. It is
recommended that this reserve be considered
for reduction to $1.3 million due to an
anticipated downtrend in the increases that
the benchmark cities will grant for compen-
sation adjustments to safety employees.)
3.
Fund Police Department Overtime Costs From
Assessment District Carry Over -
(Approximately $600,000 will be carried
over from FY 1991/92 budget which was set
aside to fund police personnel services.
This carry over results from salary savings
realized as a result of the timing delay
involved with hiring. Funding overtime costs
is consistent with the intent of the district
as it helps to ensure that adequate police
patrols will be maintained city wide.
4.
Transfer Balance of CMO Proceeds to General
Fund -
(This funding source represents the rema1n1ng
amount of the proceeds which resulted from the
selling of the city's interests in outstanding
Mortgage Revenue Bonds.)
5.
Use EDA Funding for Community Against
Drugs -
(This program has been historically
funded from the general fund. EDA is
exploring the feasibility of utilizing
EDA funding for FY 1992/93 for this
program. )
Vacancy Factor - city wide -
(Vacancies occur throughout
It generally takes at least
to fill a vacant position.
savings are achieved during
frame. )
6.
the year.
two months
Salary
this time
$500,000
$300,000
$600,000
$438,000
$ 44,500
$200,000
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7. Increase Engineering Fees -
(Engineering fees were last increased
in 1990. The fees currently only recover
35-40 percent of the cost of providing
the services. It is recommended that
the fees be increased to achieve a more
equitable cost recovery rate. The fees
could be increased to achieve 60 percent
cost recovery while still retaining a
median rate for comparison purposes with
surrounding cities.)
8. Bill EDA for Police Officer in Mall -
(EDA assumed the responsibility for
funding mall security as part of the FY
1991/92 mid year budget cuts. The Police
Department provides the services, on a
full-time basis, of a police officer to
assist with security. The cost for this
position is currently fully absorbed in
the Police Department budget. Since the
services of this officer only benefit the
mall, it is recommended that EDA fund this
position for 1992/93.)
9. EDA Reimbursement for Enterprise Zone Fee
Waivers -
(The enterprise zone ordinance permits
qualifying projects to receive exemptions
from payment of city development fees.
Over the last 12 months, approximately
$100,000 has been exempted in development
fees. It is proposed to request EDA to
reimburse the City for the lost revenues.
It should be noted that an item is pending
before the Legislative Review Committee
which would require EDA to reimburse the
city for future incentives.)
10. Apply utility Users Tax to Cellular Telephone
Base Monthly Charges -
(It is proposed to apply the utility users
tax to cellular telephone base monthly
charges.)
11. Reduce civic & Promotional Funding -
(As part of the mid year budget cuts,
$15,000 was eliminated from this fund. It
is proposed to eliminate an additional
$15,000 from this account for FY 1992/93.)
TOTAL:
$250,000
$ 64,700
$100,000
$125,000
$ 15.000
$2,637,200
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SABO & GREEN
A PItO~NAL OOItPORATlON
ATTORNEYS AT LAW
8UlT11l 400
_ CANOGA AVENUE
WOODLAND HILL& CALIJl'ORNlA 91887
1818l 'nNoOl8li
TELIIlCOPDIlR 1818l _7119
June 10, 1992
Timothy C. Steinhaus
Agency Administrator
Economic Development Department
201 North "E" Street, Third Floor
San Bernardino, California 92401
Dear Tim:
You have requested our opinion with regard to the legal
basis for the Redevelopment Agency of the City of San Bernardino
(the "Agency") utilizing tax increment revenues for the following
two purposes as may be contained within the Agency's fiscal year
92-93 budget:
1. The payment of approximately $44,500 as a
contribution to San Bernardino Community Against Drugs, Inc., for
the funding of clerical and administrative expenses for support"
programs to persons addicted to drugs or alcohol within the City of
San Bernardino; and
2. The payment of a full-time police sergeant assigned
to the Carousel Mall pursuant to the terms of the several
agreements entered into by and among the City of San Bernardino,
the Agency and the Central city Mall.
There is no specific statutory authority that would
enable the Agency to provide funds for the drug education program,
nor is there any specific statutory provision that WOuld
specifically preclude the use of such moneys for said program. The
Agency has not in recent years made contributions to any other
community based, non-profit and educational institutions.
Commencing in 1990, various unsuccessful legislative
attempts including Assembly Bills 843, 357 and 2479 and Assembly
Constitutional Amendment 19, have been made to authorize the use of
tax increment revenues to fund law enforcement and community-based
.
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Timothy C. steinhaus
paqe 2
programs to reduce or prevent qanq-related crime and druq
traffickinq. Governor Deukmejian based his veto of AB 843 on his
opposition to ". . . usinq redevelopment moneys to fund onqoinq
local qovernment services rather than capital improvements."
SB 1330 is presently before the state leqislature, which
would allow redevelopment aqencies to utilize tax increment
revenues for law enforcement proqrams which reduce the reported
incidents of qanq-related violent crime and druq traffickinq.
SB 1330, if adopted, would appear to authorize the fundinq of the
subject druq education proqram; however, at the present time no
authority exists which would specifically authorize the fundinq of
said proqram.
We have recently reviewed the relevant aqreements as
executed by the City, the Aqency and the Central City Mall, whereby
the Aqency had aqreed to fund a certain level of security service
to the benefit of the mall with the city havinq additionally aqreed
to actually provide such security services at its own expense. The
question which you have raised relates to the payment of 'the costs
of a full-time police serqeant assiqned to the mall for purposes of
exercisinq arrest powers for individuals apprehended by the
security quards who, althouqh they may be sworn police officers,
are not actinq in any official sworn capacity when workinq in their
off-duty hours as mall security quards. It is our opinion that the
payment of the costs of the police serqeant assiqned to the mall is
a contractual obliqation of the Aqency pursuant to the various
aqreements as previously executed with the Central city Mall and
should not be considered as a customary operatinq expense of the
City.
If you have any further questions with reqard to items
addressed herein, please do not hesitate to contact me at your
convenience.
Very truly yours,
SABO & GREEN,
A Professional Corporation
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V~
Timothy J. Sabo
TJS:df
IIIIlO\IIOOIILTRI6I
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J\J'l 11 ' 92 Be: 42R'I 9'\110 & GREEN
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P.2
Actual 1911-Sl2 IV%>>. '1'ax IllCremant aeconciliation
18'112 Xnar-m:al Aaa.... Valu.. Total IVDA
14 P&"(Iperty tax paid on Iner_ntal Aaa...ed
Value
_.t property tax peraeDt:efjJ. .. '1'ax Inoruuant
aro.. '1'_ Xnorement to rvDA
1I.roentav. of IVDA attributa.ble to ai ty
of san "~.rd1no
'!'ax I~ venerated .,U:11in elty of
8la1'l "~ino
aot r.ow and. Noderate
Low and ~vate I'Imd8 avalla.bl. to the
eny at San Bernardino
'380,000,000
v ~,
. 3,100,000
~.
, 3,052,000
~
. 1,600,1'0
ZlQt
, 320,000
14 property tax paiel on Inoruental A....Nd
Value , 3,800,000
Peroentap of :tVDA atuibutabl. to city
of san Bernar4iZlO ~
Property tax.. generated wi thin city of $
8an Bernardino on Xnor.._ntal AII....ed Val_ 2,Sl64,000
City of san Berner4ino perc.nt of U ~3..
property tax
$ 'SIll, 504
Proc:..4. of taxe. to City of San 8arnar4ino
fl'OII IncreMDtal AII....ed Value . 3019,752
'1'ax Inczouent to IVDA attributable to City
of San Bernardino trOll Inoruuan1:al
Aa....ed Value S 301i,752
JLtl 11 . 92 BEl: 42I'tf SFlIlO & GREEN
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Antioipatlld 19.:1-113 IYDA Tax lllcraent bacmclliaUon
1"2-'3 ~tal M...aed Value. ToQl IVDA
1-1 property tax paid on :Incremental AII....ed
Valu.
B.t. pro_ t~ t.ax perclentaqa a. ~ax IncreMDt
_oea 'lax Incr-.nt to IVDA
perouta.. of IVDA at.tributable t.o city
of San ..rnan'l1no
Tax Inor-.nt 9--.rated within City of
San Benardino
ao. Law and Koderat.e
LDV and lIo4erate I'l.1na availabl. to the
Cit.y of Ban Bern&z'dlno
1t propert.y tax paid. on tnor__t..l AII_..eel
Valwt
...oentag. of IVDA at.tributabl. to cit.y
of ..n B8nsardlno
Property taxe. 1J8II8rateel within City of
8811 .ernardillO on Incrcumt..l AII...aed. Value
cit.J' of San BeZ11a1'4lno peroent. of 1t
property tax
PrOQ.t~. of tax.. t.o CitJ' of 8811 Bernardlno
frOll Iner_ntal AII....1Id Value
~ax Incraunt t.o IVDA at.trUNt.able to City
of S811 Bernardino Ira Iner_ntal
AII....ed Value
~twJOC\l'l
CIf\1GlIIa "II
"50,000,000
or l'
. 0&,100,000
KSn
. 2,430,000
30ft
$ 1,'95,0&00
~
$ 379,080
. 0&,500,000
x'18t
. 3,110,000
~~..
, 828,360
. 414,180
$ 414,1'0
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C1:'tY 01' sa BDD1tDI.O
COJIP081:'t1:~ 01' 'tAX l:JJl!IIRM1nII't DOLLUS
Tax Non-Tax
Incr_ent Incra.ent. Total
City 11.80' 11.80' 23.60
County 0 30.97 30.97
Flood Control 0 2.89 2.89
S.B. Schools 34.32 0 34.32
Supt/Schools 0 .57 .57
community College 4.99 0 4.99
SBVMWD 1.285 1.285 2.57
other Districts .09 0 .09
52.485' 47.515' 100.00
San Bernardino Schools
Community College
City, other Districts and SBVMWD
-
34.32'/52.485' -
4.99'/52.485' -
13.175'/52.485'=
65.39'
9.5U
25.10'
100.00'
=
-
CSBO0006/69-1/es
09/05/90 0835
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CITY 01' COL'1'OB
COKPOSITIOB 01' TU IBrnt-1nIT DOu.....
Tax Non-Tax
Increment Increment Total
city 12.515% 12.515% 25.03
County General 0 31.13 31.13
Special Districts
(Bd./Sup. ) 0 2.35 2.35
Flood Control 0 2.87 2.87
Colton Schools
(30.4%)
S.B. Schools 30.35 0 30.35
(33.3%)
Sup't/Schools 0 .68 .68
Community Colleqe 5.01 0 5.01
SBVMWD 1.29 1.29 2.58
49.165% 50.835%
Colton/San Bern. Schools . 30.35%/49.165% = 61. 73%
Community Colleqe . 5.01%/49.165% - 10.19%
County and SBVMWD - 13.805%/49.165%. 28.08%
100.00%
CSBO0006/69-4/mm
09/04/90 0400
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CITY 01' LCD LDIDA
COIIP08ITIOB 01' TU IlJl!III-tnI'J! DOLLaR8
Tax Non-Tax
Increment I:ncrement Total
City 7.505' 7.505' 15.01
County 0 35.38 35.38
Flooc1 Control 0 4.46 4.46
Special Districts 0 3.47 3.47
(Bd./Sup. )
Redlands Schools 32.92 0 32.92
Community College 5.69 0 5.69
SBVMWD 1.465 1. 465 2.93
other Districts .14 0 .14
47.72t 52.35' 100.00
Redlands Schools '" 32.92'/47.72' '" 68.99'
Community College '" 5.69t/47.72' '" 11.92'
City, other Districts and SBVMWD '" 9.1U/47.72t '" 19.09t
100.00'
CSB00006/69-2/es
09/05/90 0840
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COUll'J.'Y 01' SU BJDtDItDZ.O
COIIP08ZTZ~ 01' TU ZJJrnI_..'.f DOLLaRS
Tax Non-Tax
Increment Increment Total
County General Fund 18.035' 18.035' 36.07
Flood Control 0 3.85 3.85
Special Districts 0 12.23 12.23
(Bd./Sup. )
San Bernardino
City Schools (39.5') 37.88 0 37.88
Redlands Schools
(35.0')
Supt/Schools 0 .73 .73
Community College 5.84 0 5.84
SBVMWD 1.5 1.5 3.00
Other Districts .4 0 .40
63.655' 36.345%
San Bern./Redlands Schools .. 37.88t/63.655' .. 59.5U
Community College . 5.84t/63.655' .. 9.17t
County, Other Districts and SBVMWD .. 19.935'/63.655'= 31.32t
100.00'
CSBO0006/69-3/es
09/05/90 0835