HomeMy WebLinkAboutItem 1a - Adopt Resolution Nos. 6972 and 6973 - 2013-14 Fiscal Year BudgetDATE: June 4, 2013
TO: Mayor and City Council
STAFF REPORT
Office of the City Manager
FROM: Dominic Lazzaretto, City Manager
Hue Quach, Administrative Services Director
SUBJECT: APPROVING THE OPERATING BUDGET FOR FISCAL YEAR 2013 -14,
AND A CAPITAL IMPROVEMENT AND EQUIPMENT PLAN FOR
FISCAL YEARS 2013 -14 THROUGH 2017 -18 BY ADOPTING THE
FOLLOWING RESOLUTIONS:
RESOLUTION NO. 6972 ADOPTING THE OPERATING BUDGET FOR
FISCAL YEAR 2013 -14 AND APPROPRIATING THE AMOUNTS
SPECIFICIED THEREIN AS EXPENDITURES FOR THE VARIOUS
FUNDS
Recommendation: Adopt
RESOLUTION NO. 6973 ADOPTING A CAPITAL IMPROVEMENT AND
EQUIPMENT PLAN FOR FISCAL YEARS 2013 -14 THROUGH 2017 -18
Recommendation: Adopt
SUMMARY
Sections 1204 and 1205 of the Arcadia City Charter require a public notice and a public
hearing for consideration of the proposed Operating Budget and Five -year Capital
Program for the ensuing fiscal year. The recommended actions are necessary to
implement the budget for Fiscal Year 2013 -14, which is required to be adopted by July
1.
This year's budget process included three Budget Study Sessions with the City Council.
Based on the input received, the FY 2013 -14 Preliminary Budget was distributed to the
City Council on May 16, 2013. Submitted for the City Council's review were all
operating funds including General, Special Revenues, Enterprise, and the Successor
Agency. Additionally, the City Council received the Capital Improvement and
Equipment Replacement Fund budgets in a separate document. All funds total $88.2
million in expenditures, of which the General Fund's budget is $51.8 million. As Special
Revenues, Enterprise, and Debt Service funds are restricted to specific purposes and
ADOPTION OF FY 2013 -14 OPERATING BUDGET & 5 -YEAR CAPITAL
IMPROVEMENT AND EQUIPMENT PLAN
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are generally self- sustaining, this report will primarily focus on the General Fund's
Operating Budget.
The proposed budget has been prepared with an eye toward maintaining the high level
of service that has been established in Arcadia while still identifying cost cutting
measures wherever possible. Overall, the budget can be considered a "status quo"
proposal; however, the methodology has been modified to be more transparent and
more closely resemble actual revenue and expenditure patterns in the City.
Through the development process, it became apparent that a balanced budget could be
achieved for FY 2013 -14 without increasing fees or charges and without using General
Fund Reserves. This would be accomplished through continuing to spend down capital
fund balances to meet annual demands. This is a practice that has been in place in
recent years to respond to the economic downturn. Unfortunately, those capital fund
balances are beginning to be depleted and must be replenished to meet future
infrastructure and equipment needs. In response to this, the proposed budget includes
returning the City's utility users tax to the levels fully authorized by the citizens of
Arcadia.
As presented, the proposed FY 2013 -14 Operating Budget includes a revenue forecast
of $51,777,900 against expenditures of $50,426,500. The net balance provides a
surplus of $1.35 million that has been marked to be transferred to the Equipment
Replacement Fund.
Summarized in the table below is the General Fund Operating Budget for: FY 2012 -13
Year Ending Estimates, FY 2013 -14 Proposed Budget for Adoption, and FY 2014 -15
Preliminary Budget Outlook. Please note that FY 2014 -15 is not proposed for adoption
as the City adopts the Operating Budget annually.
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IMPROVEMENT AND EQUIPMENT PLAN
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The overall expenditure budget of the General Fund is proposed to increase 2.04 %.
Where possible, expenditures have been cut in areas that would not directly affect
services to the public. Increases to the expenditure budget are primarily the result of
contractual labor agreements and the addition of new programs designed to effectively
meet service demands.
Revenue projections have been forecasted to increase 3.54% with an improved outlook
in comparison to the prior Fiscal Year based on improvements in the housing industry
and increasing consumer confidence.
As shown in the table above, the proposed Budget anticipates a surplus of $1.35 million
available to be transferred to the Equipment Replacement Fund at the end of the Fiscal
Year. The sections below summarize how this was accomplished.
DISCUSSION
Status of FY 2012 -13 Budget
At the time of the FY 2012 -13 General Fund budget adoption in June 2012, a deficit of
$1.5 million was projected. In recent years, surpluses have consistently materialized at
FY 12 -13
Year Ending
Estimates
FY 13 -14
Proposed Budget
FY 14 -15
Preliminary
Budget Outlook
Beginning Fund Balance
$ 9,802,000
$ 11,380,910
$ 11,380,910
Estimated Revenue:
Revenues
45,093,440
47,148,700
48,452,920
Transfers -In from other funds
4,680,830
4,629,200
5,119,400
Total Revenues
49,774,270
51,777,900
53,572,320
Proposed Expenditures:
Transfers -Out to other funds
721,790
823,200
828,100
Expenditures
47,473,570
49,603,300
50,683,800
Total Expenditures
48,195,360
50,426,500
51,511,900
Revenue Over Expenditure
1,578,910
1,351,400
2,060,420
Transfer to Equipment
0
(1,351,400)
(2,060,420)
Replacement Fund
Ending Fund Balance
$ 11,380,910
$ 11,380,910
$ 11,380,910
The overall expenditure budget of the General Fund is proposed to increase 2.04 %.
Where possible, expenditures have been cut in areas that would not directly affect
services to the public. Increases to the expenditure budget are primarily the result of
contractual labor agreements and the addition of new programs designed to effectively
meet service demands.
Revenue projections have been forecasted to increase 3.54% with an improved outlook
in comparison to the prior Fiscal Year based on improvements in the housing industry
and increasing consumer confidence.
As shown in the table above, the proposed Budget anticipates a surplus of $1.35 million
available to be transferred to the Equipment Replacement Fund at the end of the Fiscal
Year. The sections below summarize how this was accomplished.
DISCUSSION
Status of FY 2012 -13 Budget
At the time of the FY 2012 -13 General Fund budget adoption in June 2012, a deficit of
$1.5 million was projected. In recent years, surpluses have consistently materialized at
ADOPTION OF FY 2013 -14 OPERATING BUDGET & 5 -YEAR CAPITAL
IMPROVEMENT AND EQUIPMENT PLAN
June 4, 2013
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the end of each fiscal year as significant expenditure savings were achieved in the
areas of salaries and benefits. Due to these previous experiences, the City Council
approved the Proposed Budget with the belief that careful management of expenditures
would again bring a balanced budget at the fiscal year's end.
Since the FY 2012 -13 budget adoption, the economy has continued to improve and
significant salary savings and other decreases in expenditures have again materialized.
As a result, it is now expected that the City will experience a $1.6 million surplus for the
fiscal year ending June 30, 2013.
On the revenue side of the ledger, the largest increases have come from Property Tax
and Property Transfer Tax. The City received one -time payments totaling $865,000
from the State Department of Finance due to the dissolution of the Arcadia
Redevelopment Agency. Property Transfer Tax was the second largest increase and is
expected to exceed budget by $118,780. The increase is attributed to the overall
improvement in the housing market and continuing historically -low mortgage rates that
have spurred home improvements and considerable demand for Arcadia properties.
Additionally, an unexpected payment of $558,000 came to the City through settlement
of a Property Tax Administration Fee case with the County of Los Angeles. As a result
of these unexpected one -time payments and modest improvements in overall revenues,
it is expected that General Fund revenues will surpass the adopted budget by
$1,564,780.
On the expenditure side, it is expected that the organization will complete the year by
under spending allotments by $1,601,597. The largest of these savings are achieved in
the salaries and benefits line items, totaling $1,319,831.
Vacancy Factor
As stated above, there is a consistent trend of departments under spending allocated
budgets in the area of salaries and benefits. This is because the City has traditionally
budgeted all positions as being fully occupied throughout the year. In reality, there is
natural turnover that occurs when employees retire or move to other organizations. It
typically takes several months to hire a replacement, during which time other employees
temporarily absorb the workload and /or temporary replacements are brought on at a
lower rate than the employee who left. In addition, it is quite common for long -term
employees, who are at the top of their salary range, to be replaced by promoted or
newly -hired employees at the entry level of the salary range.
The result of this natural movement and replacement process is salary and benefits
savings. Over the past four years, this has averaged 3.42% of budgeted allocations. In
order to provide for a more fully transparent document, the proposed Budget has
ADOPTION OF FY 2013 -14 OPERATING BUDGET & 5 -YEAR CAPITAL
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incorporated a citywide vacancy factor of 2% to try to account for this reality, while still
remaining conservative in the first year of its use. The vacancy factor of 2% will reduce
the overall budget by $772,340.
FY 2013 -14 Proposed Revenues
GENERAL FUND REVENUE SOURCE BY CATEGORY
FY13 -14 BUDGET
Recreation
] Charge Current 2% '1 Other Revenue
❑ Revenue Other Services 1% Transfer -In
Agency
10%
■ Use Mc
Prop
4`.
❑ Fines
Penaltl
1%
■ L
❑ Taxes
58%
While revenue forecasts continue to be cautious, the outlook is more optimistic than in
recent years. For FY 2013 -14, total General Fund revenues are expected to increase
3.54 %. When removing one -time revenues from the current year's budget, revenues
are expected to increase by 6.9 %. This is largely due to the increase in utility users tax
discussed later in this report. The key revenue areas of Property Tax, Sales Tax,
Transient Occupancy Tax, and Motor Vehicle License Fees are shown in the table
below.
FY 2012 -13
Description FY 2013 -14 YE Estimate Difference % Change
Property Tax
$10,085,400
$
9,697,535
$
387,865 3.85%
Sales Tax
$ 9,762,800
$
9,432,630
$
330,170 3.38%
Transient Occupancy Tax
$ 2,859,700
$
2,736,600
$
123,100 4.30%
Motor Vehicle License Fees
$ 5,072,500
$
4,990,990
$
171,510 3.50%
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Other major revenue categories such as Franchise Tax and Licenses and Permits are
projected to have little change as compared to FY 2012 -13. Although Building and Plan
Check fees are not expected to increase, the trend for significant single family
residential development is expected to continue. All other revenue categories for the
General Fund are expected to have modest growth for the coming Fiscal Year.
FY 2013 -14 Proposed Expenses
GENERAL FUND EXPENDITURE BY DEPARTMENT
FY13 -14 Budget Development
Public Worl<s Services
Services / 7%
Fir
26`
Police
36%
Services
5%
reation &
nmunity
ervices
6%
-y & Museum
Services
6%
ty Manager
1%
City Clerk
1%
;ity Attorney
1%
Seneral City
3%
The overall expenditure budget in the General Fund is proposed to increase 2.04 %.
This year's budget continues to be a challenge as increases result from medical
premiums, CalPERS pension rates, and obligations of contractual labor agreements.
These personnel line items have increased 3.7% as compared to the previous year's
budget. FY 2013 -14 will be the last year of this three year labor agreement and the
year in which all City employees will be paying 100% of their share of retirement costs.
All other expenditure categories were further reviewed and refined with an eye toward
reducing costs where possible without negatively impacting services to the community.
Through this process, overall controllable expense line items have been reduced. As
an example, the Contract Services line item was reduced by $361,000 citywide when
compared to the prior fiscal year.
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Baseline Budget
When including the factors described above, before adding any new programs, the
proposed Budget would have a small surplus of $2,400.
FY 2013 -14 Baseline Budget
Base Revenues $ 50,102,900
Base Expenditures (including Vacancy Factor) (50,100,500)
Net Baseline Budget $ 2,400
Proposed New Programs
Added to the proposed Budget this year are a number of new programs totaling
$326,000. They consist of purchases for automation and increasing staffing levels
slightly to meet service demands. They are as follows:
• Development Services Staff Reorganization ($106,800). The Development
Services Department is requesting to redistribute current staff and add a new
Assistant Planner position to assist with design review, public counter assistance,
and provide staffing to reduce project response times. This would return the
department staffing to pre -2006 levels. Design review submittals are at their
highest levels ever. In addition, the new neighborhood noticing policy coupled
with the size and complexity of the projects currently being proposed are
requiring more staff time than is currently available. This has resulted in three to
four month delays in the review process. The addition will reduce those
processing times considerably.
• Reorganize Arcadia Zoning Code ($80,000). This would allow for a
comprehensive reorganization of the Arcadia Zoning Code. Zoning standards
are currently found in several locations in the City Code, are frequently outdated
and counter - intuitive, and are somewhat contradictory. The revision would make
it easier for staff and applicants to implement the vision of the General Plan for
the community and would provide a better legal standing for implementation and
enforcement.
• Automated Web -based Recruitment System ($10,000). Purchase of this
software system will help automate and allow the Human Resources Division to
accept job applications through the City's web page and also track applicants
throughout the recruitment process. This will reduce overall staff time and speed
up the recruitment process.
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• Upgrade Fire Administrative Assistant Position ($20,400). This would
enhance the current position in the Fire Department from a 3/4 time employee to a
full -time employee. This is also related to the high levels of business and
development activity experienced in recent years and would allow for timelier
processing of applications for development and other revenue generating
activities in the Department.
• Electronic Patient Care Reporting ($28,800). While not currently compulsory,
electronic reporting in hospitals is quickly becoming the industry standard. This
program would allow all medical transport units in the Fire Department to obtain
handheld devices and software necessary to provide patient records
electronically. This will speed up processing times at the hospitals, decrease
turnaround times for staff, and increase accuracy. There is a small revenue
offset for this program, which is included in the baseline revenue projection in the
Budget.
• Public Access Defibrillation Program ($15,000). This program will be led by
the Fire Department. The goal is provide public access to an automated external
defibrillator (AED) in all public facilities. An AED is an electronic device that can
be used by anyone to assist someone who is having a heart attack prior to the
arrival of safety personnel.
• Chamber of Commerce Increase ($50,000). This would provide $10,000 in
additional compensation to the Chamber of Commerce for services provided on
behalf of the City's economic development efforts and would also provide
$40,000 per year for the next three years for capital improvements to the
Chamber of Commerce building, which the City owns.
• City Hall Basement Storage Renovation ($15,000). This would provide for
funds necessary to refurbish and enhance the storage space for building and
planning files beneath City Hall. While the City is moving toward electronic
storage of records in general, a significant number of documents and items must
be physically maintained. This project would ensure that there is proper space
for those records.
Future Budget Pressures
At the first Budget Study Session, through the 5 -Year Financial outlook model, staff
raised concerns of near- and long -term budget pressures on the General Fund that are
caused by annual inflationary costs, CalPERS policy changes, the continued decline of
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pari - mutuel revenues, and declining balances in the Equipment Replacement Fund. The
discussion below provides a background to these pressing issues.
CaIPERS Policy Change
CalPERS announced a policy change to the employer pension contribution formula in
March 19, 2013, with a long range goal of minimizing large jumps in employer
contribution rates during extreme market conditions and achieving full funding of
retirement plans. Unfortunately, to accomplish these goals, significant increases in
employer contributions will be necessary. Starting in FY 2015 -16, CalPERS plans to
phase in cost increases of 6 -10% of employee salaries over a five year period.
Additionally, in April 2014, CalPERS expects to make further modifications to the
formulas, which would add an additional 4 -6% per year if adopted. In total, these
changes would equate to $2.3 to $3.7 million in additional costs to the City per year
once fully implemented.
Capital Improvement Fund Balance
The 5 -Year Financial outlook as proposed in the Capital Improvement Fund shows that
the fund will retain a $2 million Reserve balance through FY 2017 -18. However, it
should be noted that this is largely due to very few capital projects being budgeted in
the out years. At the budget study session, staff presented a list of unfunded one -time
capital improvement projects that have a present -day cost of $11.9 million. In addition,
a list of needed ongoing maintenance projects was presented with a cost of up to $4
million annually.
Over the years, the City has relied on pari - mutuel revenues received from the Santa
Anita Park to fund various City infrastructure improvements. The City has a policy of
depositing all such revenues in its Capital Improvement Fund. At its peak in the late
1980's, revenue receipts reached $2.5 million annually and supplemental General Fund
dollars were not needed. Today, pari - mutuel receipts are approximately $750,000.
This leaves significantly less funding for maintenance of an aging infrastructure, which
has required staff to change project specifications to stretch available dollars. While this
can be an effective approach in the short -term, over time the deferred maintenance can
result in significant repair and replacement costs.
With declining revenues and increasing costs, it is essential that a form of funding other
than the current pari - mutuel revenues be pursued.
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Equipment Replacement Fund Balance
The Equipment Replacement Fund funds annual procurements of major equipment and
vehicles for daily operational functions. At various points in time, monies were
transferred from the General Fund whenever surpluses were available. As the General
Fund has been challenged to balance its operating budget since the 2007 recession,
there have not been consistent transfers to build up the Equipment Replacement Fund
Balance. This Fund has no other dedicated funding mechanism other than the support
of General Fund Reserves. As the table below illustrates, with each year's proposed
spending on essentials such as police patrol vehicles, paramedic ambulances, and the
like, the Equipment Replacement Fund is projected to run into a deficit fund balance as
early as FY 2015 -16 without additional revenues.
4,000,000
2,000,000
0
(2,000,000)
(4,000,000)
(6,000,000)
Equipment Replacement Fund
5 Year Fund Balance Projection
Revenue Enhancement
As noted, future budget pressures will significantly impact the General Fund. Without
addressing these pressures, service levels to the community may be compromised. At
the study sessions, staff presented several alternatives to enhance revenue streams in
order to address and manage these ensuing pressures. Based on the available
options, it was the consensus of the City Council to pursue the reinstatement of the
utility tax rate (UUT) to its original tax rate of 7% in the budget. The UUT rate of 7%
was set by Ordinance No. 1645 on June 30, 1978, for natural gas, electricity, and water.
Following this Ordinance, on May 15, 1979, the City fully suspended the UUT on water.
On June 3, 1980, the City reduced the gas and electricity UUT rate to 5 %. This
2012 -13
2013 -14
2014 -15
2015 -16
2016 -17
2017 -18
• Revenue
116,600
65,700
61,400
53,900
50,000
50,000
• Expenditures
1,609,000
923,625
1,566,342
1,989,207
1,758,022
2,156,055
--i Ending Fund Balance
3,144,900
2,286,975
782,033
(1,153,274)
(2,861,296)
(4,967,351)
Revenue Enhancement
As noted, future budget pressures will significantly impact the General Fund. Without
addressing these pressures, service levels to the community may be compromised. At
the study sessions, staff presented several alternatives to enhance revenue streams in
order to address and manage these ensuing pressures. Based on the available
options, it was the consensus of the City Council to pursue the reinstatement of the
utility tax rate (UUT) to its original tax rate of 7% in the budget. The UUT rate of 7%
was set by Ordinance No. 1645 on June 30, 1978, for natural gas, electricity, and water.
Following this Ordinance, on May 15, 1979, the City fully suspended the UUT on water.
On June 3, 1980, the City reduced the gas and electricity UUT rate to 5 %. This
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proposed UUT reinstatement would apply to natural gas, electricity, and water utilities.
Telecommunications are exempt from the increase as that 5% rate was set by Measure
A when it was approved by the voters in June 2009. Once the reinstatement becomes
effective, a full year's annual revenue is projected to provide approximately $2 million to
General Fund operations and allow for additional funding support to the Capital
Improvement and Equipment Replacement Funds. As there will be a phasing in of the
UUT rates, the projected revenues for FY 2013 -14 are set at $1.675 million.
Net Budget Summary
As shown in the table below, when all factors are included, there is expected to be a
surplus of $1,351,400 at the end of FY 2013 -14. This amount is proposed to be
transferred into the Equipment Replacement Fund to begin replenishment of this
depleted account.
FY 2013 -14 General Fund Budget Summary
Base Revenues
Additional UUT Funds
Total Revenues
Base Expenditures (including Vacancy Factor)
New Programs
Total Expenditures
$ 50,102,900
1,675,000
51,777,900
(50,100,500)
(326,000)
(50,426,500)
Net Available to Transfer to Equipment $ 1,351,400
Replacement Fund
Capital Improvement and Equipment Plan Expenditures
The FY 2013 -14 Capital Improvement Plan proposes 42 separate projects totaling
$7.23 million in expenditures, of which $1.19 million would be paid for from the Capital
Outlay Fund balance. The remaining $6.04 million would come from grants, state
subventions, and local special funds such as the Parks & Recreation Fund. The table
below summarizes some of the major proposed projects.
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FISCAL YEAR 2013 -14 MAJOR CAPITAL IMPROVEMENT PROJECTS
Project Description
Project Budget
Funding Source
Annual Slurry Seal Program
$500,000
Capital Improvement & Gas Tax
Annual Meter Replacement Program
$500,000
Water Fund
Sixth Avenue Sewer Capacity Improvement
$600,000
Sewer Fund
Project - Construction
Civic Center Parking Lot Improvements
$435,000
Capital Improvement Fund
Foothill Boulevard Concrete Repairs
$500,000
PROP C Fund
Intersection Widening Project
$667,400
Transportation Fund & MTA Grant
Pavement Rehabilitation @ 1st Ave. & 10th Ave.
$550,000
Gas Tax, Water, and STP -L Grant
Gold Line Facilities Betterments
$323,000
PROP C Reserve
Recreation & Parks Master Plan
$200,000
Park & Recreation Facilities Fund
In the Equipment Replacement Fund, there are 29 separate acquisitions totaling $1.3
million. Of that, $903,000 will come from the exiting fund balance. The most significant
expenditures come from vehicle replacements in various departments, computer
upgrades throughout the City, and safety radio equipment replacements.
Additional Considerations
Water Fund Additional Appropriation
Subsequent to finalizing the proposed FY 2013 -14 Budget, it became apparent that the
City will require an additional funding appropriation of $1 million to the Water Operating
Fund Budget for Fiscal Year 2013 -14. Due to decreasing groundwater levels in the
area, the City will need to purchase additional replacement water from the Main San
Gabriel Basin Watermaster in the coming year. Specifically, members in the Raymond
Groundwater Basin will be subjected to a decrease of approximately 34% annually in
the amount of water that can be pumped from the basin. Typically, the City purchases
approximately 2,500 to 3,000 acre feet of replacement water every year. However, due
to the pumping restrictions, the City will have to purchase an additional 1,000 to 1,500
acre feet of groundwater from the Main San Gabriel Basin. It is anticipated that this will
cost approximately $1 million in FY 2013 -14. The currently - proposed rate adjustment
and reserve levels in the Water Fund will be sufficient to manage the additional
expenditure in replacement water costs; however an appropriation is necessary for the
expenditures.
Reallocation of General Fund Reserves
In October 2012, when the City Council held an all -day planning session, direction was
provided to establish as a policy goal maintaining an Emergency Reserve Fund of 20%
of ongoing operating revenues. At the end of the Fiscal Year, based on FY 2013 -14
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revenue projections, the fund will be at approximately 14.1 % of revenues. Funds will be
available in the General Fund Operating account to make the transfer to reach the
established goal.
Over the past several years, the General Fund has accumulated surplus balances at the
end of each Fiscal Year, yet no transfers were made into the various General Fund sub
accounts, which have annual expenditures and no established revenue sources beyond
the General Fund. These would include the Liability/Worker's Compensation Fund,
Capital Improvement Fund, and Equipment Replacement Fund. As noted in the
Equipment Replacement and Capital Improvement Fund discussions above, these
funds are generally diminishing. The table below recommends transfers to be made
during the Fiscal Year to replenish the various General Fund accounts. Should the City
Council approve these transfers as proposed, the General Fund Operating budget will
retain approximately $4.9 million, or 9.48% of its annual budget, which will be sufficient
to manage cash flow needs during the Fiscal Year and respond to any unanticipated
needs that may occur; the Emergency Reserve Fund will fully meet its established
policy goal; the Liability/Workers Compensation Fund will be considered fully funded;
and the Equipment Replacement and Capital Projects funds will be better funded.
Proposed Transfer of Funds for FY 2013 -14
Fund Description
Projected FY
2013 -14
Ending Fund Transfer
Balance From
Transfer
To
Ending Fund
Balance
After Fund
Transfers
% General
Fund
Operating
Budget
General Fund (Operating)
$11,380,910 $(6,473,780)
-
$4,907,130
9.48%
Emergency Reserve Fund
7,280,200 -
3,075,380
10,355,580
20.00%
Liability /Worker's
601,600 -
1,398,400
2,000,000
3.86%
Compensation Self -
Insurance Fund
Capital Improvement
Fund
Equipment Replacement
Fund
Net Total
State Budget
2,039,510
- 1,000,000
3,039,510
5.87%
3,664,875
- 1,000,000
4,664,875
9.01%
$ 24,967,095 $(6,473,780) $6,473,780 $24,967,095
At this time of year, the City Budget is prepared without knowing what actions the State
may take that could impact local government finances. In the Governor's May Revision
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of his FY 2013 -14 proposed budget package, the administration projected a surplus of
approximately $800 million based on an ongoing economic recovery and voter -
approved temporary tax increases. The budget remains to be reviewed, revised, and
adopted by the Legislature, which is expected in mid -June.
Based on the Governor's budget priorities and current outlook, it appears that no State
takeaways will occur for cities. However, any actions by the State that are a major
departure from the presently proposed Budget will be brought to the City Council for
discussion and resolution at that time.
CONCLUSIONS
As presented, the FY 2013 -14 General Fund Operating Budget is projected to end the
Fiscal Year with a surplus of $1,351,400, which is recommended to be transferred to the
Equipment Replacement Fund to address future equipment needs of the organization.
This surplus budget is largely attributed to the new budgeting methodology of instituting
a vacancy rate factor, identifying cost savings measures where possible, and the
inclusion of additional UUT revenue. The proposed budget reflects modest revenue
growth after adjusting for the new revenue stream. The proposed budget will allow the
organization to continue providing a high level of service to the community while
addressing necessary infrastructure improvements over time. Staff will continue to
operate in the same fiscally responsible manner it has throughout the economic
downturn while also maintaining a commitment to the exceptional service that Arcadians
have come to expect.
Enclosed with this staff report are Exhibits A and B summarizing all City Funds with their
respective Operating Budget and the proposed Five -Year Capital Improvement and
Equipment Replacement Plan.
• Exhibit "A" is the summary of Sources and Uses of Funds for All Funds reflecting
the proposed Operating Budget presented to Council for adoption.
• Exhibit "B" summarizes the proposed Five -year Capital Improvement and
Equipment Replacement Plan.
EXHIBIT A
ALL FUNDS OPERATING BUDGET SUMMARY
FY 2013 -14
SOURCES OF FUNDS
USES OF FUNDS
Ending Fund
Fund Beginning Outside Transfer Total Appropriation Transfer Total Balance
Fund FY13 -14 Sources In Out FY13 -14
General Fund
11,380,910
47,148,700
4,629,200
63,158,810
49,603,300
2,174,600
51,777,900
11,380,910
Narcotic Seizure Federal
388,470
11,900
0
400,370
115,600
0
115,600
284,770
COPS
234,070
100,000
0
334,070
87,800
0
87,800
246,270
Local Law Enforcement
0
50,000
118,200
168,200
168,200
0
168,200
0
Medical /Dental
72,900
0
3,556,600
3,629,500
3,556,600
0
3,556,600
72,900
IRS Task Force
34,600
10,000
0
44,600
10,000
0
10,000
34,600
Worker Compensation /Liability
598,600
3,000
2,188,800
2,790,400
2,188,800
0
2,188,800
601,600
Homeland Security
0
111,000
0
111,000
111,000
0
111,000
0
State Library Grant
72,000
400
0
72,400
30,000
0
30,000
42,400
Misc. P.E.R.S. Employee Retirement Fund
2,703,300
0
0
2,703,300
0
0
0
2,703,300
Emergency Reserve
7,280,200
0
0
7,280,200
0
0
0
7,280,200
Parks & Recreation
2,190,900
1,211,000
0
3,401,900
203,600
0
203,600
3,198,300
Traffic Safety
0
270,000
0
270,000
270,000
0
270,000
0
Solid Waste
676,950
450,000
0
1,126,950
381,800
300,000
681,800
445,150
State Gas Tax
193,820
2,091,250
0
2,285,070
2,124,900
0
2,124,900
160,170
Air Quality Management District
121,920
68,400
0
190,320
107,200
0
107,200
83,120
Community Development Block Grant
0
290,000
0
290,000
290,000
0
290,000
0
Santa Anita Grade Separation
6,473,210
350,770
0
6,823,980
0
0
0
6,823,980
Transit
0
755,140
1,046,760
1,801,900
1,801,900
0
1,801,900
0
Proposition A
465,150
964,800
0
1,429,950
902,260
0
902,260
527,690
Measure R
1,076,760
604,100
0
1,680,860
472,900
0
472,900
1,207,960
Proposition C
0
912,090
0
912,090
791,250
0
791,250
120,840
TDA Article 3 Bikeway
0
72,750
0
72,750
72,750
0
72,750
0
STPL & ITS Special Fund
0
0
0
0
0
0
0
0
Transportation Impact Fund
(76,200)
833,700
0
757,500
757,400
0
757,400
100
Capital Outlay
2,637,900
763,200
0
3,401,100
1,361,590
0
1,361,590
2,039,510
Lighting Maintenance
43,600
470,000
705,000
1,218,600
1,175,000
0
1,175,000
43,600
Parking Districts
35,750
200
0
35,950
18,200
0
18,200
17,750
Kaitlyn Place Landscaping District
0
2,560
0
2,560
2,560
0
2,560
0
Water Fund
30,300,480
10,740,280
0
41,040,760
12,231,905
0
12,231,905
28,808,855
Sewer Fund
2,674,000
1,288,000
0
3,962,000
1,891,700
0
1,891,700
2,070,300
Equipment Replacement
3,144,900
1,437,100
0
4,582,000
917,125
0
917,125
3,664,875
Redevelopment Successor Agency
3,240,700
3,163,900
0
6,404,600
3,163,900
0
3,163,900
3,240,700
General Obligation Bond 2001
276,420
366,900
0
643,320
366,900
0
366,900
276,420
General Obligation Bond 2011
376,630
600,300
0
976,930
600,300
0
600,300
376,630
Total 76,617,940 75,141,440 12,244,560 164,003,940 85,776,440 2,474,600 88,251,040 75,752,900
EXHBIT B
CITY OF ARCADIA
SUMMARY OF PROPOSED FIVE YEAR CAPITAL PROGRAMS
FISCAL YEAR 2013 -14 THROUGH 2017 -18
ESTIMATED
FUNDS
7/1/2013
ESTIMATED
FIVE -YEAR
REVENUE
PROPOSED
FIVE -YEAR
EXPENDITURE
ESTIMATED
FUNDS
6/30/2018
CAPITAL OUTLAY FUND
2,637,900
3,803,500
(4,233,190)
2,208,210
GAS TAX FUND
193,820
8,700,950
(8,132,800)
761,970
PARKS AND RECREATION FUND
2,190,900
6,111,500
(218,000)
8,084,400
PROP C FUND
0
5,630,200
(5,415,340)
214,860
TRANSPORTATION IMPACT FUND
(76,200)
2,120,700
(1,424,800)
619,700
SEWER FUND
2,674,000
6,670,200
(8,786,023)
558,177
EQUIPMENT FUND
3,144,900
1,647,000
(8,440,751)
(3,648,851)
WATER FACILITY RESERVE
25,100,800
1,255,280
(11,110,730)
15,245,350
WATER EQUIPMENT RESERVE
1,607,400
702,995
(662,395)
1,648,000
RESOLUTION NO. 6972
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, ADOPTING A BUDGET FOR FISCAL
YEAR 2013 -14 AND APPROPRIATING THE AMOUNTS
SPECIFIED THEREIN AS EXPENDITURES FROM THE FUNDS
WHEREAS, on June 4, 2013, the City Manager submitted to the City Council a
proposed Budget for Fiscal Year 2013 -14, a copy of which is on file in the Office of the
City Clerk; and
WHEREAS, Section 1204 of the Arcadia City Charter requires notice and hearing
for consideration of a proposed operating budget and its adoption by resolution; and
WHEREAS, the aforementioned proposed Budget includes the budget for the
ensuing Fiscal Year 2013 -14; and
WHEREAS, notice of the public hearing on the proposed Budget and a summary
of the proposed Budget were published on May 20, 2013; and
WHEREAS, the duly noticed public hearing was conducted by the City Council
on June 4, 2013.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. That certain "City of Arcadia Budget, Fiscal Year 2013 -14 ", as on
file in the office of the City Clerk, together with any approved amendments thereto, is
hereby adopted, in pertinent part, as the official budget of the City of Arcadia for the
Fiscal Year 2013 -14 and the amounts specified therein as expenditures from the funds
indicated are hereby appropriated for the purposes specified therein.
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SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of , 2013.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Steph n P. Deitsch
City Attorney
r
Mayor of the City of Arcadia
RESOLUTION NO. 6973
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, ADOPTING A CAPITAL IMPROVEMENT
AND EQUIPMENT PLAN FOR FISCAL YEARS 2013 -14
THROUGH 2017 -18
WHEREAS, on June 4, 2013, the City Manager submitted to the City Council a
proposed plan entitled, "Capital Improvement and Equipment Plan, Fiscal Years 2013-
18 ", a copy of which is on file in the office of the City Clerk; and
WHEREAS, Section 1205 of the Arcadia City Charter requires notice and hearing
for the consideration of a capital program and its adoption by resolution of the City
Council; and
WHEREAS, notice of the public hearing on the proposed Capital Improvement
and Equipment Plan was published on May 20, 2013; and
WHEREAS, the duly noticed public hearing was conducted by the City Council
on June 4, 2013.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. That certain "Capital Improvement and Equipment Plan, Fiscal
Years 2013 -18 ", as on file in the office of the City Clerk, together with any approved
amendments thereto, is hereby adopted, in pertinent part, for Fiscal Year 2013 -14.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
[SIGNATURES ON NEXT PAGE]
Passed, approved and adopted this day of , 2013.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney
0
Mayor of the City of Arcadia