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Home My WebLink AboutBudget Task Force Committees Findings and Recommendations - 3�0.20 City of Huntington * Beach �. 2000 MAIN STREET CALIFORNIA 92648 J A-T s30 TO: Honorable Mayor and City Council Members FROM: Phillip Inglee, Chairman of the Citizen's Budget Review Task Force DATE: February 18, 1992 SUBJECT: Update Budget Review Task Force 1992/93 Budget Deficit Elimination Presentation REFERENCE: 1. Budget Task Forces 1992/93 Budget Plan dtd. 1/18/92 2. City Administrator' 1992/93 Budget Plan dtd. 1/24/92 Attached is an updated copy of the referenced Budget Task Force's Budget Elimination Plan (Reference 1), as originally submitted during the City Council study session of January 15, 1992. The only change from the original report is the most recent City 1992/93 budget deficit estimate, as presented by the City Administrator to the City Council on January 24th 1992 (Reference 2). However in the event our personnel cost savings scheme, as outlined in our Primary Plan of Reference D is not accepted, we plan to present an alternate expense reduction contingency in the future to replace it. Our presentation this evening will focus upon the key differences between the two plans, rather than just repeating our original City Council briefing of January 15th. Although the city's 1992/93 budget presentation tended to trivialize these difference, we believe otherwise. Where the city places more emphases on placing additional cost on the taxpayers in the form of fees to cure the deficit, the Task Force places its emphasis on reducing the cost of government. Where the city uses "best case scenarios" to project future revenue, we believe in a more conservative and cost cutting approach to balancing the budget. Where the city recommends using one time financial win fails to support trendy and costly capital projects, the Task Force recommends that excess funds, beyond a prudent 5% general fund revenue, be used first to correct infrastructure priority projects, such as storm drains, gutters and sewers. Finally, while some may find it more comfortable to point out those predictable budget areas where the two plans agree, the members of the Task Force firmly believe that over time our true value to the city and its taxpayers, is where we greatly differ. PI:lp 5080a Telephone (714) 536-5202 City of Hunt'ington Beach Budget Review Task Force S 5.0 Million Budget Deficit General Fund Analysis Detail by Department Savings -------------- Public Works 5% salary increase reduced to 2% (332,282) Transfer expense to transportation fund (149,543) Elim Bldg Maint Super, Crew Leader and 8 Temps (170,998) Eliminate Crew Leader and 8 Temps, and downgrade 2 postions (137,017) Reduce agriculture/irrigation materials (93,160) Reduce general purchases (60,000) Reduce civc center janitorial services (19,000) Cut contract services (83,632) -------------- (1,045,632) -------------- Totals (4,638,936) -------------- -------------- Revenue Sources: Property Taxes 0 Other Local Taxes 0 Licenses 8 Permits 0 Fines/Forfts/Penatlies 0 Use of Money 8 Property Jail Rental 0 Revenue from Other Agcy 0 Charges for Current Svc Public Works 104,300 Library 23,240 Fire 351,000 Communtiy Services 52,000 Police 330,000 City Clerk 5,850 Community Development 0 -------------- 866,390 Other Revenue Trans from Other Funds Meadowlark Golf Course 25,000 Cable TV Fund 110,000 Fire Joint Powers Authority 100,000 Redevelopment Agency 80,000 -------------- 315,000 -------------- Totals 1,181,390 City of Huntington Beach Budget Review Task Force Secondary Plan S 5.0 Million Budget Deficit -------------- General Fund Analysis Summary City BRTF Proposed Spending Cut Recommended Budget Recommendation % Budget Department Expense 92/93 By Department Cut 92/93 ------------------------ -------------- -------------- ------ -------------- City Council 266,158 (37,250) 14.0% 228,908 Non-Departmental 10,614,825 (622,500) 5.9% 9,992,325 Administration 1,310,276 (468,700) 35.8% 841,576 City Treasurer 820,746 (37,335) 4.5% 783,411 City Attorney 1,641,186 (82,916) 5.1% 1,558,270 City Clerk 422,226 (20,000) 4.7% 402,226 --� Administrative Services 4,469,132 (151,285) 3.4% 4,317,847 Library 3,398,254 (141,601) 4.2% 3,256,653 Economic Development 0 0 0.0% 0 Community Development 3,792,226 (231,680) 6.1% 3,560,546 Fire 16,481,864 (206,000) 1.2% 16,275,864 Police 32,829,076 (983,231) 3.0% 31,845,845 Community Services 7,151,412 (342,189) 4.8% 6,809,223 Public Works 17,278,544 (713,350) 4.1% 16,565,194 -------------- -------------- ------ -------------- General Fund Expense 100,475,925 (4,038,037) 4.0% 96,437,888 Revenue ------------------------ Property Taxes 31,855,000 0 0.0% 31,855,000 Other Local Taxes 35,814,000 0 0.0% 35,814,000 Licenses & Permits 3,455,000 0 0.0% 3,455#000 Fines/Forfts/Penatlies 1,950,000 0 0.0% 1,950,000 Use of Money & Property 6,086,000 0 0.0% 6,086,000 Revenue from Other Agcy 8,890,000 0 0.0% 8,890,000 Charges for Current Svc 4,290,000 866,390 20.2% 5,156,390 Other Revenue 649,000 0 0.0% 649,000 Trans from Other Funds 2,500,000 315,000 12.6% 2,815,000 -------------- -------------- ------ -------------- General Fund Revenue 95,489,000 1,181,390 1.2% 96,670,390 -------------- -------------- -------------- Out of Balance (4,986,925) 5,219,427 232,502 -------------- -------------- -------------- -------------- -------------- -------------- WSR HBGF_FIN.W52 13-FEB-1992 10:35:55 AM City of Huntington Beach Budget Review Task Force $ 5.0 Million Budget Deficit General Fund Analysis Personnel # of Detail by Department Savings Cuts People -------------- -------------- ------ City Council 5% salary increase reduced to 2% 0 Reduce Auth Exp Allow by 1/4 (17,250) Reduce intergovernmental dues/conferences (20,000) " -------------- (37,250) Non-Departmental Self Insurance (100,000) Electric Audit (100,000) Workers Comp (125,000) Combining/merging management such that ratio of mgt to staff remains constant (100,000) (100,000) 1 Reduce visitors bureau, contract svcs (130,000) Interest Savings on $10.2 MM 0 Refinance Civic Center Debt (67,500) -------------- (622,500) Administration 5% salary increase reduced to 2% 0 3% pay cut for all department heads (40,000) Cut PIO and Special Promotions in 1/2 (225,000) (90,000) 2 Eliminate Prod & Research (183,700) (180,000) 3 Reduce conferences expense by 25% (20,000) -------------- (468,700) City Treasurer 5% salary increase reduced to 2% 0 Eliminate bus license dep't position (37,335) -------------- (37,335) City Attorney 5% salary increase reduced to 2% 0 Eliminate one attorney's position (82,916) -------------- (82,916) City Clerk 5% salary increase reduced to 2% 0 Eliminate one Perm Part-Time Depty City Clerk (20,000) -------------- (20,000) Administrative Services 5% salary increase reduced to 2% 0 Information Services Division Positions (56,055) Purchasing/Cent Services Positions (35,626) Personnel Department Postions (59,604) (59,604) 1 -------------- (151,285) _ Library 5% salary increase reduced to 2% 0 Eliminate Library Asst (46,033) Eliminate Library Sr (50,568) Eliminate Temp Personnel Help (10,000) Cut Misc funds (35,000) -------------- (141,601) City of Huntington Beach Budget Review Task Force S 5.0 Million Budget Deficit General Fund Analysis Personnel # of Detail by Department Savings Cuts People -------------- -------------- ------ Economic Development Eliminate position that will increase funds that are repaid to general fund 0 Community Development 5% salary increase reduced to 2% 0 Secretary cut to Part time (24,919) Freeze plan checker (54,550) Eliminate intern (10,600) Cut assoc to asst planner (7,800) Cut 2 asst planner to planng aides (19,900) Reduce contract services (20,050) Eliminate 2 Bldg positions (93,861) (93,861) 2 -------------- (231,680) Fire 5% salary increase reduced to 2% 0 Fire Education - two positions (394) (107,000) (107,000) 2 Hazmat 0 Fire Protection - one position (459) (99,000) (99,000) 1 -------------- (206,000) Police 5% salary increase reduced to 2% 0 Range officer (76,000) Eliminate frozen postions (292,000) Cut one education specialist (364) (44,881) (44,881) 1 Cut info specialist (55,350) (55,350) 1 Consolidate maintenance (45,000) Regional helicopter (300,000) Eliminate public affairs - 2 pos. (364,329) (90,000) (90,000) 2 Eliminate planning/research - 2 pos. (344,329) (80,000) (80,000) 2 -------------- (983,231) Community Services 5% salary increase reduced to 2% 0 Public art collection (6,300) Cultural affairs division - 20% (26,634) Sister cities (10,555) Project Self Sufficiency (55,000) (55,000) 1 Winter Beach Maintenance (38,700) Cut by 25% Oakview Center Services (35,000) Debt Service on Parking Fund Debt (170,000) -------------- (342,189) City of Huntington Beach Budget Review Task Force S 5.0 Million Budget Deficit General Fund Analysis Personnel # of Detail by Department Savings Cuts People -------------- -------------- ------ Public Works 5% salary increase reduced to 2% 0 Transfer expense to transportation fund (149,543) Elim Bldg Maint Super, Crew Leader and 8 Temps (170,998) Eliminate Crew Leader and 8 Temps, and downgrade 2 postions (137,017) Reduce Pk/Tree/Lndscp purchases (93,160) Reduce general purchases (60,000) Reduce civc center janitorial services (19,000) Cut contract services (83,632) -------------- (713,350) -------------- -------------- ------ Totals (4,038,037) (1,054,696) 19 -------------- -------------- ------ -------------- -------------- ------ Revenue Sources: Property Taxes 0 Other Local Taxes 0 Licenses & Permits 0 fines/Forfts/Penatlies 0 Use of Money & Property Jail Rental 0 Revenue from Other Agcy 0 Charges for Current Svc Public Works 104,300 Library 23,240 Fire 351,000 Communtiy Services 52,000 Police 330,000 City Clerk 5,850 Community Development 0 -------------- 866,390 Other Revenue Trans from Other Funds Meadowlark Golf Course 25,000 Cable TV Fund 110,000 Fire Joint Powers Authority 100,000 Redevelopment Agency 80,000 -------------- 315,000 -------------- Totals 1,181,390 -------------- -------------- TO: Honorable Mayor and City Council Members FROM: Members of the Citizen's Budget Review Task Force DATE: January 15, 1992 (Updated 1/24/92) SUBJECT: Task Force's Findings and Recommendations- 1992/93 Projected Budget Deficit Elimination Plan(Phase 1) Issue: - On September 19, 1991, the Huntington Beach City Council established the Citizen's Budget Review Task Force (Task Force) to: 1) review and make recommendations to eliminate the projected 1992/93 city budget deficit, and 2) to make long-term strategic budgeting recommendations to avoid future deficits. The following report completes the first Council request by detailing the Task force's findings and making both expense reduction and income enhancement recommendations that will eliminate the projected 1992/93 city budget deficit of approximately $5 million. Findings - Since beginning the study, the Task Force has come to the conclusion that the city's ongoing financial problems cannot be corrected by simple cost cutting measures alone. In addition to the expected financial concerns, we have found an urgent need to change the spending culture of the city and the public's perception as to the role of the city government in the lives of its citizens. In this regard, community groups and/or the city management from time to time expect the taxpayers to financially support projects that exceed the established municipal responsibilities of 1) public safety, 2) public works; 3) health and welfare, and 4) basic administration. When the aforementioned during a period of continuing financial adversity, our elected and appointed officials should reconsider their past priorities and adjust them to the economic realities of the 1990's. It appears to the Task Force, that the city's attitude toward spending is a paradigm for continued deficits and rising taxpayer discontent. In this regard, the following is a sample of strongly held views and misconceptions we have heard from civic groups, employee organizations, and city management personnel during our public meetings: o It is felt by many that the Orange County economy is experiencing a normal recession, which is to be expected after an extended period of financial growth. Once over, in early 1992, the financial environment for both the County and the City of Huntington Beach will return to "business as usual". o Most of the individuals and groups with whom we spoke have given lip service to balancing the city budget. However, they also,sincerely believe that their specific areas of interest are unique and, therefore, should generally be immune to any budget reductions. o While the Task Force and the City Council have discussed the potential of reducing currently held city positions if less disruptive personnel savings could not be made, employee groups totally reject this possibility. They have been informally told that the.one-time "PERS Refunds" will be used to avoid near-term layoffs or even reductions in scheduled salary increases and, therefore, they see no reason to discuss the issue. -1- BTF-Findings/ Recommendations Page 2 o Most groups we spoke to assume the aforementioned "PERS Refund" should and will be used to cure the short-term financial problems of the city, rather than using it to address its longer term capital improvement needs. o Regardless of the originally intended use of previously borrowed funds (i.e. $10.2 million COP bonds), any excess dollars resulting from these sources are viewed by many as just another opportunity to rationalize additional spending. o While most aware citizens and city officials truly understand the absolute need to replace and/or repair the city's long ignored infrastructure problems (note the M I Study), few appear even willing to seriously discuss the issue and/or subordinate short-term interest to the longer term viability of the city's structure. o Although perceived at odds over various city labor-management issues, there appears to be, in reality, a club-like atmosphere between management and the employees to ultimately ensure full employment and benefits for all of those currently employed with the city. o Finally, it appears that some elected and appointed city officials find it difficult to differentiate between the need for strict financial restraint and their constituents' demand for city support of activities that should be funded by public donations and not subsidized by the taxpayers as a whole. As we previously noted, these aforementioned observations tend to reflect the views of various groups and individuals we have interviewed over the last several months. In this regard, the Task Force is very concerned that if not altered, the city will continue to sink even deeper into a financial quagmire. Budget Reduction Summary - Before quantifying our 1992/93 budget deficit elimination plan, we believe it is necessary to summarize the reasoning behind our conclusions. First, we will detail both our expense reduction and income enhancement proposals. We will also explain our need to present both a prima re and secondary plan to eliminate the projected $5 million budget deficit. Finally, we will also refer back to our "Findings" section to demonstrate how both community and city governments' strongly held financial paradigms can inhibit constructive budgeting changes. The key elements in our deficit reduction recommendations are as follows: o While many believe the current recession will soon be over and the city's finances will return to "business as usual' both UCLA's and Chapman University's 1992 economic forecasts strongly disagree. Although the recession on a national scale may subside around the second quarter of 1992, California's recovery could lag behind by at least nine months to a year. Additionally, there are some serious structural changes taking place in the Southern California,economy that will have long-term negative effects on Orange County and the City of Huntington Beach (i.e. major reductions in both defense and aerospace spending). It is, therefore, vital that the city budget for 1992/93 be held to truly priority items only and that spending, on less than priority items be dropped, or at least deferred, until the City Council and City Management have better projections on the area's future economy. This is hardly the time to make unnecessary commitments or to believe, without verification, internally produced income projections in order to rationalize popular, low priority civic projects. -2- BTF—Findings/ Recommendations Page 3 o The Task Force is very concerned over the lack of attention being given to the repair and/or replacement of the city's long neglected infrastructure problems as expressed in the recently presented MSI Study. Left unattended, this neglect is both an economic and a liability time bomb. For this reason, we believe the 1992/93 budget should be balanced through current expense reductions and fee income enhancement, rather than using the "PERS Refund" as many expect. This one—time income source should be used to re—establish the city's General Fund Reserve to 5% and the remainder specifically dedicated to making priority repairs on the city's infrastructure. Although more glamorous projects such as the pier area may have strong appeal; left unattended, problem such as sewer maintenance and city public work improvements have major downside risks. o Understanding the conflicting civic and political issues that arise when dealing in the area of budget reform, the Task Force will submit both Primary and Secondary deficit reduction plans. We will also include a contingency list of other expense reduction and income enhancement areas that could be added if the projected budget deficit continues to expand. The Primary deficit reduction plan avoids immediate full—time staff layoffs. We are recommending the elimination of unfilled, and some part—time positions at this time. However, we believe that full—time layoffs during a recession should be avoided if possible. This would also give the Task Force more time to better understand the city's financial structure and then address the issue of other work force reductions in its upcoming long—term budget recommendations. However, if we are unable to make less disruptive personnel expense savings at this time, we are also submitting a Secondary deficit reduction plan for 1992/93 that includes selected personnel reductions. It should be noted that the positions recommended to be dropped in the Secondary plan were taken directly from the city management's early deficit reduction recommendations. Finally, as noted earlier, we strongly recommend against using the "PERS Refund" to avoid short—term layoffs, if necessary. These one—time monies should be dedicated to the maintenance of the city's infrastructure. o Both our Primary and Secondary plans include expense reduction and income enhancement areas. The expense reductions are well balanced and should be simple to review in our attached deficit reduction plans. In the area of income enhancement, we are not recommending any increases in taxes or fees that are in reality defacto taxes. Our income enhancements are truly user directed and should only cover the city's cost for providing specific services to the public. o In regard to the Council's request for the Task Force to make recommendations concerning the retention or refunding of the $10.2 million COP bonds, we have neither the staff nor expertise to verify the recently submitted opinions of the city's investment bankers, Stone & Youngberg, to retain the COP (Stone & Youngberg's letter dtd 12/23/92). However, we are more than qualified to question the wisdom of using this unused city debt to fund five new capital projects during a period of growing budget deficits. The major question in this regard is not if this debt should be defeased, but if the projected income from these or any subsequent projects is valid and sufficient to pay'the interest on the subject funding debt. —3— BTF-Findings/ Recommendations Page 4 To avoid future capital funding fiascos, the following four points should be addressed before any additional self-funding projects are implemented: 1) Is the projected income from a proposed self-funding project valid and not just a rationale to spend anew? 2) In a period of fiscal stress, should the city be obligating funds to further new capital projects, while the issue of infrastructure repair and the lack of General Fund reserves have not been fully addressed? 3) Has anyone researched the planning rationale behind such projects as City Redevelopment and, most recently, the pier financing to insure proposed new projects will not become another drain on the General Fund? 4) Once a self funding project is recommended by the city staff and approved by the City Council, it should then have the concurrence of an objective third party, such as a nationally known accounting firm, before its actually funded. The only alternative to ignoring the aforementioned four points and possibly overstating revenue sources, would be to go to the general Fund for another project bailout which will again put the city budget in further jeopardy. Conclusion - It must be emphasized that the city finds itself in its current financial predicament because in the past city management and City Council have encumbered future resources without a clear understanding of the balance between ongoing income and priority expenses required by prudent financial management. Fortunately, current city management and the City Council have had the wisdom to reach into the community and seek expertise to help them with their tasks. Hopefully, the City Council will heed the voice of the citizens of Huntington Beach. 5080a -4- City,of Huntington Beach Budget Review Task Force $ 5.0 Million Budget Deficit General Fund Analysis <------------Primary Plan-------------> <-----------Secondary Plan------------> Summary City BRTF BRTF Proposed _ Spending Cut Recommended Spending Cut Recommended Budget Recommendation % Budget Recommendation % Budget Department Expense 92/93 By Department Cut 92/93 By Department Cut 92/93 ---=-------------------- -------------- • -------------- -------- -------------- -------------- -------- -------------- City Council 266,158 (38,941) 14.6% 227,217 (37,250) 14.0% 228,908 Non-Departmental 10,614,825 (522,500) 4.9% 10,092,325 (622,500) 5.9% 9,992,325 Administration 1,310,276 (222,056) 16.9% 1,088,220 (468,700) 35.8% 841,576 City Treasurer 820,746 (61,009) 7.4% 759,737 (37,335) 4.5% 783,411 City Attorney 1,641,186 (113,354) 6.9% 1,527,832 (82,916) 5.1% 1,558,270 City Clerk 422,226 (32,683) 7.7% 389,543 (20,000) 4.7% 402,226 Administrative Service 4,469,132 (179,190) 4.0% 4,289,942 (151,285) 3.4% 4,317,847 Library 3,398,254 (210,509) 6.2% 3,187,745 (141,601) 4.2% 3,256,653 Economic Development 0 0 0.0% 0 0 0.0% 0 Community Development 3,792,226 (227,442) 6.0% 3,564,784 (231,680) 6.1% 3,560,546 Fire 16,481,864 (256,187) 1.6% 16,225,677 (206,000) 1.2% 16,275,864 Police 32,829,076 (1,333,597) 4.1% 31,495,479 (983,231) 3.0% 31,845,845 Community Services 7,151,412 (395,836) 5.5% 6,755,576 (342,189) 4.8% 6,809,223 Public Works 17,278,544 (1,045,632) 6.1% 16,232,912 (713,350) 4.1% 16,565,194 -------------- -------------- --- -------------- -------------- -------- -------------- General Fund Expense 100,475,925 (4,638,936) 4.6% 95,836,989 (4,038,037) 4.0% 96,437,888 Revenue --------------------------------------- Property Taxes 31,855,000 0 .0.0% 31,855,000 0 0.0% 31,855,000 Other Local Taxes 35,814,000 0 0.0% 35,814,000 0 0.0% 35,814,000 Licenses & Permits 3,455,000 0 0.0% 3,455,000 .0 0.0% 3,455,006 Fines/Forfts/Penatlies -1,950,000 0 0.0% -1,950,000 0 0.0% 1,950,000 Use of Money & Propert 6,086,000 0 0.0% 6,086,000 0 0.0% 6,086,000 Revenue from Other Agc 8,890,000 0 0.0% 8,890,000 0 0.0% 8,890,000 Charges for Current Sv 4,290,000 866,390 20.2% 5,156,390 866,390 20.2% 5,156,390 Other Revenue 649,000 0 0.0% 649,000 0 0.0% 649,000 Trans from Other Funds 2,500,000 315,000 12.6% 2,815,000 315,000 12.6% 2,815,000 -------------- -------------- -------- -------------- -------------- -------- --------------- General Fund Revenue 95,489,000 1,181,390 1.2% 96,670,390 1,181,390 1.2% 96,670,390 -------------- -------------- -------------- -------------- -------------- out of Balance (4,986,925) 5,820,326 833,401 5,219,427 232,502 WSR HBGF_FIN.W54 10-JAN-1992 08:28:28 AM CitV'of Huntington Beach Budget Review Task Force Primary Plan S 5.0 Million Budget Deficit ------------ General Fund Analysis Summary City BRTF Proposed Spending Cut Recommended Budget Recommendation % Budget Department Expense 92/93 By Department Cut 92/93 ------------------------ -------------- -------------- ------ -------------- City Council 266,158 (38,941) 14.6% 227,217 Non-Departmental 10,614,825 (522,500) 4.9% 10,092,325 Administration 1,310,276 (222,056) 16.9% 1,088,220 City Treasurer 820,746 (61,009) 7.4% 759,737 City Attorney 1,641,186 (113,354) 6.9% 1,527,832 City Clerk 422,226 (32,683) 7.7% 389,543 Administrative Services 4,469,132 (179,190) 4.0% 4,289,942 Library 3,398,254 (210,509) 6.2% 3,187,745 Economic Development 0 0 0.0% 0 Community Development 3,792,226 (227,442) 6.0% 3,564,784 Fire 16,481,864 (256,187) 1.6% 16,225,677 Police 32,829,076 (1,333,597) 4.1% 31,495,479 Community Services 7,151,412 (395,836) 5.5% 6,755,576 Public Works 17,278,544 (1,045,632) 6.1% 16,232,912 -------------- -------------- ------- -------------- General Fund Expense 100,475,925 (4,638,936) 4.6% 95,836,989 Revenue ------------------------ Property Taxes 31,855,000 0 0.0% 31,855,000 Other Local Taxes 35,814,000 0 0.0% 35,814,000 Licenses & Permits 3,455,000 0 0.0% 3,455,000 Fines/Forfts/Penatlies 1,950,000 0 0.0% 1,950,000 Use of Money & Property 6,086,000 0 0.0% 6,086,000 Revenue from Other Agcy 8,890,000 0 0.0% 8,890,000 Charges for Current Svc 4,290,000 866,390 20.2% 5,156,390 Other Revenue 649,000 0 0.0% 649,000 Trans from Other Funds 2,500,000 315,000 12.6% 2,815,000 -------------- -------------- ------ -------------- General Fund Revenue 95,489,000 1,181,390 1.2% 96,670,390 -------------- -------------- -------------- Out of Balance (4,986,925) 5,820,326 833,401 -------------- -------------- -------------- WSR HBGF_PEO.W51 13-FEB-1992 10:38:35 AM City 'of Hunti'ngton Beach Budget Review Task Force S 5.0 Million Budget Deficit General Fund Analysis Detail by Department Savings -------------- City Council 5% salary increase reduced to 2% (1,691) Reduce Auth Exp Allow by 1/4 (17,250) Reduce intergovernmental dues/conferences (20,000) -------------- (38,941) Non-Departmental Self Insurance (100,000) Electric Audit (100,000) Workers Comp (125,000) Combining/merging management such that ratio of mgt to staff remains constant 0 Reduce visitors bureau, contract svcs (130,000) Interest Savings on $10.2 MM 0 Refinance Civic Center Debt (67,500) -------------- (522,500) Administration 5% salary increase reduced to 2% (27,056) 3% pay cut for all department heads (40,000) Cut PIO and Special Promotions in 1/2 (135,000) Eliminate Prod & Research 0 Reduce conferences expense by 25% (20,000) -------------- (222,056) City Treasurer 5% salary increase reduced to 2% (23,674) Eliminate bus license dep't position (37,335) ---(61,009) City Attorney 5% salary increase reduced to 2% (30,438) Eliminate one attorney's position (82,916) -------------- (113,354) City Clerk 5% salary increase reduced to 2% (12,683) Eliminate one Perm Part-Time Depty City Clerk (20,000) -------------- (32,683) Administrative Services 5% salary increase reduced to 2% (87,509) Information Services Division Pos. (56,055) Purchasing/Cent Services Positions (35,626) Personnel Department Postions 0 -------------- (179,190) Library 5% salary increase reduced to 2% (68,908) Eliminate Library Asst (46,033) Eliminate Library Sr (50,568) Eliminate Temp Personnel Help (10,000) Cut Misc funds (35,000) -------------- (210,509) City of Huntington Beach Budget Review Task Force 8 5.0 Million Budget Deficit General Fund Analysis Detail by Department Savings -------------- Economic Development Eliminate position that will increase funds that are repaid to general fund 0 Community Development 5% salary increase reduced to 2% (89,623) Secretary cut to Part time (24,919) Freeze plan checker (54,550) Eliminate intern (10,600) Cut assoc to asst planner (7,800) Cut 2 asst planner to planng aides (19,900) Reduce contract services (20,050) Eliminate 2 Bldg positions 0 -------------- (227,442) Fire 5% salary increase reduced to 2% (256,187) Fire Education - two positions (394) 0 Hazmat 0 Fire Protection - one position (459) 0 -------------- (256,187) Police 5% salary increase reduced to 2% (620,597) Range officer (76,000) Eliminate frozen portions (292,000) Cut one education specialist (364) 0 Cut info specialist 0 Consolidate maintenance (45,000) Regional helicopter (300,000) Eliminate public affairs - 2 pos. (364,329) 0 Eliminate planning/research - 2 pos (344,329) 0 -------------- (1,333,597) Community Services 5% salary increase reduced to 2% (108,647) Public art collection (6,300) Cultural affairs division - 20% (26,634) Sister cities (10,555) Project Self Sufficiency 0 Winter Beach Maintenance (38,700) Cut by 25% Oakview Center Services (35,000) Debt Service on Parking Fund Debt (170,000) -------------- (395,836) City of Huntington Beach Budget Review Task Force Alternative Cuts To Be Considered Page 1 Budget Savings -------------- Revenue Increases: ------------------ Property Taxes 0 Other Local Taxes 0 Licenses & Permits 0 Business License Fee Increase 160,000 Oil Barrel Tax 50,000 -------------- 210,000 Fines/Forfts/Penatlies 0 Use of Money & Property 0 Revenue from Other Agcy 0 Charges for Current Svc Public Works 400,700 Library 0 Fire 0 Communtiy Services 0 Police 0 City Clerk 0 Community Development 533,570 -------------- 934,270 Other Revenue 0 Trans from Other Funds 0 -------------- Totals 1,144,270 -------------- -------------- Expenditure Reductions: ----------------------- Non-Departmental Reduce Allocation - Contract Services (40,000) Reduce Allocation - Contingency (40,000) Employee pay $50 per month toward dep medical (360,000) -------------- (440,000) Administration No Bonuses (10,000) Records retention (6,300) -------------- (16,300) City Treasurer 0 -------------- 0 _ City Attorney Reduce operation by 25% (400,000) -------------- (400,000) City Clerk 0 -------------- 0 City of Huntington Beach Budget Review Task Force Alternative Cuts To Be Considered Page 2 Budget Savings -------------- Administrative Services Real Estate Services (206,910) -------------- (206,910) Library Book Reductions (59,000) Reduce branch operations (53,838) -------------- (112,838) Community Development Miscellaneous per DH (18,550) -------------- (18,550) Fire Fire Reserves (108,000) -------------- (108,000) Police Shut down Shank Substation (100,000) -------------- (100,000) Community Services Privatize Huntington Harbor Life Guard (30,000) City gym (165,349) Park surveillance (90,208) Remaining 80% Cultural/Arts (106,534) Exhbt/Perf/Events (89,832) Miscellaneous per DH (70,000) -------------- (551,923) Public Works Maintenance Cuts (68,000) Flood Pump Contract Services (29,057) Library branch maintenance (3,000) -------------- (100,057) -------------- Total Expenditure Reductions (2,054,578) -------------- Total Additional Budget Savings 3,198,848 CITIZENS BUDGET REVIEW TASK FORCE 1992/93 BUDGET DEFICIT ELIMINATION PLAN SUMMARY (As Originally Submitted on 1/15/92) THE PROBLEM A Projected $5 Million 1992/93 Budget Deficit THE SOLUTION 1.) Reduce the Cost of City Government during 1992/93 by $4.7 Million 2.) Increase Truly Non-Tax, User Fees by $1.2 Million THE RESULTS . Reverse a Projected $5 Million 1992/93 Deficit to An Approximate 900 0 1992/93 Budget Surplus CITIZENS BUDGET REVIEW TASK FORCE 1992/93 BUDGET DEFICIT - ELIMINATION PLAN SUMMARY (Continued) How to Accomplish Reduce the Cost of City Government by One of the Follow!": Primary Plan Secondary. Plan 1. Reduce Expenses by $4.7 Million 1. Reduce Expenses by $4.7 Million Without Staff Layoffs Which Includes 19 Staff Layoffs Enhance the City's Income by Truly Non Tax, User Fee Income By Approximately $1.2 Million (for Both Plans) Alternative Expense Reductions & Income Enhancements In the event portions of either of the Task Force plans are not accepted, the following Expense Reduction and Income Enhancement values are available: Expense Reduction Income Enhancement Alternatives Alternatives $2.1 Million $1.5 Million THE TWO KEY DIFFERENCES BETWEEN THE BUDGET TASK FORCE AND THE CITY'S 1. The Task Force Emphasis is to Reduce the Cost of City Government. vs The City Staff Emphasis is to Increase the Taxpayers Cost of Fee Services Expense Reduction: Income Enhancement From Fees The Task Force - $4.7 'Million The Task Force - $1.2 Million VS VS The City Plan - $2.7 Million The City Plan - $2.6. Million . THE TWO KEY DIFFERENCES BETWEEN THE BUDGET TASK FORCE AND THE CITY'S (Continued) 2. Use of the PERS Refund Windfall: The City The Task Force Build the General Fund Reserve to 5%, Build the General Fund Reserve to 5%, with the Balance to Support Popular, with the Balance to Make True Priority but Not Priority Capital Projects such Infrastructure Repairs EL[gl such as: as: * The Pier Projects * Storm Drains * Beach Improvements Gutters * Repaying for the Pier Reconstruction * Sewers (Water Fund Replenishment) Popular Capital Projects have their obvious value, but until the less trendy, but more important projects, those which affect the health and welfare of the Community, are completed, the other should wait for a vastly improved economy to develop. ADDITIONAL TASK FORCE BUDGET RECOMMENDATIONS - o The City's Oil & Real Estate spending culture of the '60's and 70's must be changed to meet the NEW economic realities of the '90's. o The City must take into consideration both the current recession, which is projected through 1992 in California AND the permanent changes taking place in the Southern California economic structure, before committing to Iona term Capital Projects. o The City must demand VALID income sources before approving capital projects that will reportedly- pay for themselves. o The City must begin a program of repair and/or replacement of HIGH PRIORITY infrastructure areas which, if left uncorrected, could materially affect the health and welfare of the Citizens of Huntington Beach. o The City must correct its growing over dependence on one time financial windfalls, such as Cable TV and the PERS refund, to avoid instituting proper financial discipline into the budgetary process. o After spending $250,000 on the MSI Report, the City should plan for its full implementation and stop using portions of it from time to time to raise fee income in lieu of taxes. o More objectivity and less social and political influence should be used in approving non-essential services and major capital projects. FINALLY o The Budget Task Force is encouraged by the current direction of the City Administrator and his staff concerning the financial direction of the City- 0 It is recommended that the Budget Task Force be reduced in size to three to five Q to 5) permanent members who will rotate annually and work directly in conjunction with the Administration to develop a five year Strategic Plan and act as a budget "Watch Dog" for the Community. TO: Honorable Mayor and City Council Members FROM: Members of the Citizen's Budget Review Task Force DATE: January 15, 1992 SUBJECT: Task Force's Findings and Recommendations- 1992/93 Projected Budget Deficit Elimination Plan(Phase 1) Issue: - On September 19, 1991, the Huntington Beach City Council established the Citizen's Budget Review Task Force (Task Force) to: 1) review and make recommendations to eliminate the projected 1992/93 city budget deficit, and 2) to make long-term strategic budgeting recommendations to avoid future deficits. The following report completes the first Council request by detailing the Task force's findings and making both expense reduction and income enhancement recommendations that will eliminate the projected 1992/93 city budget deficit of approximately $5.6 million. Findings - Since beginning the study, the Task Force has come to the conclusion that the city's ongoing financial problems cannot be corrected by simple cost cutting measures alone. In addition to the expected financial concerns, we have found an urgent need to change the spending culture of the city and the public's perception as to the role of the city government in the lives of its citizens. In this regard, community groups and/or the city management from time to time expect the taxpayers to financially support projects that exceed the established municipal responsibilities of 1) public safety, 2) public works, 3) health and welfare, and 4) basic administration. When the aforementioned during a period of continuing financial adversity, our elected and appointed officials should reconsider their past priorities and adjust them to the economic realities of the 1990's. It appears to the Task Force, that the city's attitude toward spending is a paradigm for continued deficits and rising taxpayer discontent. In this regard, the following is a sample of strongly held views and misconceptions we have heard from civic groups, employee organizations, and city management personnel during our public meetings: o It is felt by many that the Orange County economy is experiencing a normal recession, which is to be expected after an extended period of financial growth. Once over, in early 1992, the financial environment for both the County and the City of Huntington Beach will return to "business as usual". o Most of the individuals and groups with whom we spoke have given lip service to balancing the city budget. However, they also sincerely believe that their specific areas of interest are unique and, therefore, should generally be immune to any budget reductions. o While the Task Force and the City Council have discussed the potential of reducing currently held city positions if less disruptive personnel savings could not be made, employee groups totally reject this possibility. They have been informally told that the one=time "PERS Refunds" will be used to avoid near-term layoffs or even reductions in scheduled salary increases and, therefore, they see no reason to discuss_- the issue. - - -- - - BTF-Findings/ Recommendations Page 2 o Most groups we spoke to assume the aforementioned "PERS Refund" should and will be used to cure the short-term financial problems of the city, rather than using it to address its longer term capital improvement needs. o Regardless of the originally intended use of previously borrowed funds (i.e. $10.2 million COP bonds), any excess dollars resulting from these sources are viewed by many as just another opportunity to rationalize additional spending.' o While most aware citizens and city officials truly understand the absolute need to replace and/or repair the city's long ignored infrastructure problems (note the MSI Study), few appear even willing to seriously discuss the issue and/or subordinate short-term interest to the longer term viability of the city's structure. o Although perceived at odds over various city labor-management issues, there appears to be, in reality, a club-like atmosphere between management and the employees to ultimately ensure full employment and benefits for all of those currently employed with the city. o Finally, it appears that some elected and appointed city officials find it difficult to differentiate between the need for strict financial restraint and their constituents' demand for city support of activities that should be funded by public donations and not subsidized by the taxpayers as a whole. As we previously noted, these aforementioned observations tend to reflect the views of various groups and individuals we have interviewed over the last several months. In this regard, the Task Force is very concerned that if not altered, the city will continue to sink even deeper into a financial quagmire. Budget Reduction Summary - Before quantifying our 1992/93 budget deficit elimination plan, we believe it is necessary to summarize the reasoning behind our conclusions. First, we will detail both our expense reduction and income enhancement proposals. We will also explain our need to present both a primary and secondary plan to eliminate the projected $5.6 million budget deficit. Finally, we will also refer back to our "Findings" section to demonstrate how both community and city governments' strongly held financial paradigms can inhibit constructive budgeting changes. The key elements in our deficit reduction recommendations are as follows: o While many believe the current recession will soon be over and the city's finances will return to "business as usual" both UCLA's and Chapman University's 1992 economic forecasts strongly disagree. Although the recession on a national scale may subside around the second quarter of 1992, California's recovery could lag behind by at least nine months to a year. Additionally, there are some serious structural changes taking place in the Southern California economy that will have long-term negative effects on Orange County and the City of Huntington Beach (i.e. major reductions in both defense and aerospace spending). It is, therefore, vital that the city budget for 1992/93 be held to truly priority items only and that spending, on less than priority items be dropped, or at least deferred, until the City Council and City Management have better projections on the area's future economy. This is hardly the time to make unnecessary commitments or to believe, without verification, internally produced income projections in order to rationalize popular, low priority civic projects. -2- BTF-Findings/ Recommendations Page 3 0 The Task Force is very concerned over the lack of attention being given to the repair and/or replacement of the city's long neglected infrastructure problems as expressed in the recently presented MSI Study. Left unattended, this neglect is both an economic and a liability time bomb. For this reason, we believe the 1992/93 budget should be balanced through current expense reductions and fee income enhancement, rather than using the "PERS Refund" as many expect. This one-time income source should be used to re-establish the city's General Fund Reserve to 5% and the remainder specifically dedicated to making priority repairs on the city's infrastructure. Although more glamorous projects such as the pier area may have strong appeal; left unattended, problem such as sewer maintenance and city public work improvements have major downside risks. o Understanding the conflicting civic and political issues that arise when dealing in the area of budget reform, the Task Force will submit both Primary and Secondary deficit reduction plans. We will also include a contingency list of other expense reduction and income enhancement areas that could be added if the projected budget deficit continues to expand. The Primary deficit reduction plan avoids immediate full-time staff layoffs. We are recommending the elimination of unfilled, and some part-time positions at this time. However, we believe that full-time layoffs during a recession should be avoided if possible. This would also give the Task Force more time to better understand the city's financial structure and then address the issue of other work force reductions in its upcoming long-term budget recommendations. However, if we are unable to make less disruptive personnel expense savings at this time, we are also submitting a Secondary deficit reduction plan for 1992/93 that includes selected personnel reductions. It should be noted that the positions recommended to be dropped in the Secondary plan were taken directly from the city management's early deficit reduction recommendations. Finally, as noted earlier, we strongly recommend against using the "PERS Refund" to avoid short-term layoffs, if necessary. These one-time monies should be dedicated to the maintenance of the city's infrastructure. o Both our Primary and Secondary plans include expense reduction and income enhancement areas. The expense reductions are well balanced and should be simple to review in our attached deficit reduction plans. In the area of income enhancement, we are not recommending any increases in taxes or fees that are in reality defacto taxes. Our income enhancements are truly user directed and should only cover the city's cost for providing specific services to the public. o In regard to the Council's request for the Task Force to make recommendations concerning the retention or refunding of the $10.2 million COP bonds, we have neither the staff nor expertise to verify the recently submitted opinions of the city's investment bankers, Stone & Youngberg, to retain the COP (Stone & Youngberg's letter dtd 12/23/92). However,we are more than qualified to question the wisdom of using this unused city debt to fund five new capital projects during a period of growing budget deficits. The major question in this regard is not if this debt should be defeased, but if the projected income from these or any subsequent projects is valid and sufficient to pay the interest on the subject funding debt. -3- BTF-Findings/ Recommendations Page 4 To avoid future capital funding fiascos, the following four points should be addressed before any additional self-funding projects are implemented: 1) Is the projected income from a proposed self-funding project valid and not just a rationale to spend anew? 2) In a period of fiscal stress, should the city be obligating funds to further new capital projects, while the issue of infrastructure repair and the lack of General Fund reserves have not been fully addressed? 3) Has anyone researched the planning rationale behind such projects as City Redevelopment and, most recently, the pier financing to insure proposed new projects will not become another drain on the General Fund? 4) Once a self funding project is recommended by the city staff and approved by the City Council, it should then have the concurrance of an objective third party, such as a nationally known accounting firm, before its actually funded. The only alternative to ignoring the aforementioned four points and possibly overstating revenue sources, would be to go to the general Fund for another project bailout which will again put the city budget in further jeopardy. Conclusion - It must be emphasized that the city finds itself in its current financial predicament because in the past city management and City Council have encumbered future resources without a clear understanding of the balance between ongoing income and priority expenses required by prudent financial management. Fortunately, current city management and the City Council have had the wisdom to reach into the community and seek expertise to help them with their tasks. Hopefully, the City Council will heed the voice of the citizens of Huntington Beach. -4- BUDGET TASK FORCE EXPENDITURE REDUCTION/REVENUE ENHANCEMENT COMPARATIVE SUMMARY <------------Primary Plan-------------> <-----------Secondary Plan------------r City BRTF SRTF Propoaed Spending Cut Recaamldad Spending Cut Recommended Budget Raco w"dation X Budget ReaomwMatIan % Budget Department Expense 92/93 - By Department Cut 92/93 by Department Cut 92/93 ------------------------ -------I------ -------------- -------- -------------- -------------- -------- .............. city Colmit 266,158 (36,941) 14.6% 22T,21T (37,250) 14.0% 228,908 Non.Departmental 9,714,825 (522,500) 5.4% 9,192132S (622,500) 6.4% 99092,325 Administration 1,310,2T6 (22Z0056) 16.9% 1,088,220 (468,700) 35.8X 841,576 City Treasurer 8t0,T46 (610009) 7.4% 759173T (37,335) 4.5X TM3,411 City Attorney 11641,186 013,354) 6.9% 1,527,832 (820916) 5.1% 1,558,270 City Clerk 422,226 (32,653) T.T% 389,543 (20,000) 4.7% 402,226 Administrative Service 40469,132 (179,1") 4.0% 4,289,942 (151,285) 3.0 4,31T,847 Library 3,398,254 (210,509) 6.2% 3,18T,T45 (141,601) 4.2% 3,256,653 Economic Development 0 0 0.0% 0 0 0.0% 0 Community Development 3,792,226 (2270442) 6.0X 3,564,784 (231,680) 6.1X. 3,560,546 Fire 16,451,864 (2560167) 1.6x 16,225,677 (206,000) 1.2% 16,275,a" Police 32,829,076 (1,333,597) 4.1% 31,4",479 (983,231) 3.0% 31,845,845 Community Services 7,151,412 (395,836) 5.5% 6,755,576 (342,189) 4.8% 6,809,223 Public Yorks 1T,278,544 (1,045,632) 6.1% 16,232,91Z (713,350) 4.1% 16,565,194 ----.... -------- -------------- -------------- -------- ------......-- Generat fund Expense 99,575,925 (4,636,956) 4.7% 94,936,989 (4,038,03T) 4.1% 9S,53T,BSS Revenue Property Taxes 31,255,000 0 0.0X 31,255,000 0 0.0% 31,255,000 Other Loot Taxes 3615691000 0 0.0X 36,569,000 0 0.0% 36,169,000 Licenses it PaMita 3#4058000 0 0.0% 3,405,000 0 0.0% 3,405,000 Fines/Forfts/Psnatties 1'"0'000 0 0.0% 1'"0'000 0 0.0% 1,950,000 us* of Money i Propert 5,616,000 450,000 8.0% 6,066,000 450,000 8.O% 6,066,000 Ravww from Other Ape 8,030,000 0 0.0% 8,830,000 0 0.0% a,830,000 Charges for Current Sv 4,175,000 866,390 20.8% 5,041,390 8661390 20.8% 5,041,390 Other Revenue 600,000 0 0.0% 600,000 0 0.0% 600,000 Trww from Other Fumdm 1,600,000 313,000 19.7% 1,915,000 315,000 19.7% 11915,.ND -------------- ----.... -------------- .............. -------- ............. . Generat Fund Revenue 94,000,000 1,631,390 1.T% 95,631,390 1,631,390 1.7% 95,631,390 .........I.... -------------- -------------- Deficit (5,575,925) 6,270,326 694,401 5,669,427 93,502 r� iRFFiRsl..sls== nrsoscC=ssers -a�s�s�aatst !!!levee!!/!N ��a�aa��aaa BUDGET TASK FORCE EXPENDITURE REDUCTION/REVENUE ENHANCEMENT PRIMARY PLAN SUMMARY (Includes Partial Salary Increase Rollback) City BRTF Proposed spending Cut Recommended Budget Recommendation % Budget Department Expense 92/93 By Department Cut 92/93 ------------------------ .... ...------ ...... .............. city Councit 2",158 (38,941) 14.6% 227,217 Ron-0apartmentst 9,714,825 (522,500) 5.4% 9,192,325 Adkini>stration 1.310,276 (222,056) 16.9% 1,08a,220 City Treasurer 820,746 (61,009) 7.4% 759,737 City Attorney 116ii,186 (113,354) 6.9% 10527,832 City Clark 422,Z26 (32,683) 7.7% 389,543 Achinistrative services 4,469,132 (1791190) 4.0% 4,289,942 Library .3,398,254 W0,509) 6.2X 3,187,745 Economic Develgzwt 0 0 0.0% 0 omwity DoYet9pment 307921226 (227,442) 6.0% 3,564,784 Fire 16,481,864 (256,187) 1.6% 16,225,677 Potice 3Z,829,076 (1,333,597) 4.1X 31,495,479 Community services 7,151,412 (395,836) 5.5% 6,755,576 Public WOPKs 17,278,544 (1,045,632) 6.1% 16,232,912 G+eneret fund Expense 99,575,925 (4,638,936) 4.7% 94,936,989 Revenue ........................ Property Taxes 31,285,000 0 0.0% 31.255,000 Other Locat Taxea 36,$69,000 0 O.OX 36,569,000 liceNes 8 Pemits 3,405,000 0 0.0% 3,405,000 Final/Forfts/Psnatties 1,950,000 0 0.0% 1,950,000 Use of Money 6 Property 5,616,000 450,000 8.0% 6,066,000 Revenue from other Agcy 8,830,000 0 0.0% 8,830,000 Charges for Current Svc 4,179,000 866,390 20.8% 5,041,390 Other Revenue 600,000 0 0.OX 600,000 Trans from Other funds 1,600,000 315,000 19.7% 1,915,000 ----------- -------------- ------ ............-- Ganerat Fund Revenue 94,000,000 1,631,390 1.7% 95,631,390 Funds Surplus (Deficit) (5,575,925) 6,2700326 694.401 exessrYY�tarl� �l�I��I�..��c� ecscccaccaccca -6- BUDGET TASK FORCE EXPENDITURE REDUCTION/REVENUE ENHANCEMENT PRIMARY PLAN DETAIL Amount .............. City Council 5% salary increase reduced to 2% (1,691) Reduce Auth Exp At tow by 1/4 (1?,250) Reduce intergovernmental dues/conferences (20,000) (38,941) Mon-Departmental Self Insurance (100,000) Electric Audit (100,000) Workers Carp (125,000) Canbining/marginp mranapement ouch that ratio of e+gt to staff remains constant 0 Reduce vieitore bureau, contract was (130,000) Interest Savings on t10.2 PIN 0 Refinance Civic Canter Debt (67,500) (522,500) Administration 5% salary increase reduced to 29 (27,056) 3% pay cut for all department heads (40,000) Cut P10 and Special Promotions in 1/2 (135,000) Eliminate Prod 8 Research 0 Reduce conferartea expense by 25% (20,000) (zz�,os6) City Treasurer 59 *story increase reduced to 2% (23,674) Eliminate bus tiaense dep't position (37,335) (61,009) City Attorney 5% eatery increase reduced to 2% (30,438) Eliminate one attorney's position (82,916) (113,354) City Clerk 5% votary increase reduced to 2% (12,683) Eliminate one Perm Part-Time Depty City Clark (20,000) Administrative Services 5% salary increase reduced to 2% (87,509) Information Services Division Pos. (56,055) Purchasing/Cent Services Positions (35,626) Personnet Department Postions 0 (179,190) Library 5% &story increase reduced to 2% (68,908) Eliminote Library Asst (46,033) Eliminate Library or (50,568) Eliminate Tang Personnel Help (10,000) Cut Misa funds (35,000) (210,509) -7- Amount -------------- Economic Development Eliminate position-that will increase funds that are repaid to general fund 0 Community Developom t S% eatery increase reduced to 21 (69,623) Secretary out to Part tiles (210,919) Freeze plan checker (54,550) EtImMate intern (10,600) Cut assoc to mast planner (7,800) Cut 2 ozot planner to ptm" sides (19,900) Win contract services (20,050) Eliminate 2 Bldg positions_ 0 (227,442) Fire 5% eatery Ine.resse reduced to 2% (256,187) Fire Eduaation - two positions (394) 0 Hanut 0 Fire Protection - one position (459) 0 .............. (256,187) Police 5% salary increase reduced to 2% (620,597) Range officer (760000) Eliminate frozen postione (292,000) cut one aducation spaialiat (364) O Cut info specialist 0 Consolidate sralntenance (45,000) Regional helicopter (300,000) Etipinete public affairs - 2 pos. (364,329) 0 Eliminate planning/research - 2 pos (344,329) 0 .............. (1,333,597) Community Services b% salary increase reduced to 2% (108,647) Ptbtic art collection (6,300) Cultural affairs division - 20% (26004) sister cities (10,S55) Projoet $olf tuffieioney 0 ♦✓inter beach Nairtenenae (38,700) Cut by 25% Dakview Center Services (35,000) Debt service an Parking fund Debt (170,000) (395,836) I Amount Public Yorks 5% eelary increase reduced to 2% (332,282) Transfer expense to transportation fund (149,S43) Elfin Bide Maint Super, Crew Leader end 8 Temps (1TO,998) Eliminate Crew leader and 8 Twgx, and downgrade 2 postions Reduce sgrtcuttura/irrigation motorists (93.160) Reduce general purchases (60,000) Reduce civc center Janitorial services t19,0003 Cut contract services (83,632) (1,045,632) Totals (4,638,936) Wen ue Sources: Property Taxes 0 Other Local taxes 0 Licenses & Permits 0 Fines/Forfte/Penatties 0 Use of Money 6 Property Jai Rental 450,000 Revenue from Other Agcy 0 Charges for Current Svc Public Yorks 104,300 Library 23,240 Fire 351'000 Coonu:tty Services $2,000 Police 330,000 City Cterk 5,856 Cawmnity Development 0 8",390 other kevenue Trans from Other Funds Mesdowlark Golf Course 25,000 Cable TV Fund 110,000 Fire Joint Powers Authority 1000000 Redevelopment Agency 80,000 3150000 Totals 1,651,390 eaauaauuaaa -9- BUDGET TASK FORCE EXPENDITURE REDUCTION/REVENUE ENHANCEMENT SECONDARY PLAN SUMMARY (Includes Elimination of Nineteen Full-Time Positions) city BRTF Proposed Spending Cut R" mmended Budget Recommendation % Budget DeortMent EXpenn 92/93 By Department Cut 92/93 --------................ -------------- .............. ...... .............. city Council . 266,158 (37,250) 14.0% 228,90$ Non-Departmantat 9J14,825 (622,500) 6.4% 9,092,325 Administration 1,310,276 (468,700) 35.8% $41,576 City Treasurer 820,746 (37,355) 4.5% 783,411 City Attorney 1,641,186 (820916) S.1% 1,55$,270 City Cterk 422,226 (20,000) 4.7!( 402,226 Administrative services 4,469,132 (151,285) 3.4% 4,317,$47 Lfbrary 3,3981254 (141,601) 4.2X 3,2560653 Economla Development 0 0 0.0% 0 Cvawmfty Development 3,792,226 (231,"0) 6.1% 3,560,546 Fir* 16,4810664 (206,000) 1.2% 16,275,864 Potice 3z,8z9,076 (983,231) 3.0% 31,845,845 Community services 7,151,412 (342,189) 4.8% 6,809,223 Public 1lorks 17,278,544 (713,350) 4.1% 16,565,194 -------------- -------------- ------ .............. General, Fund Expense 99057509Z5 (4,038,037) 4.1% 95,537,8w Revenue ...................... Property Texas 31.259.000 0 0.0% 31,255,000 Other Local texas 36,567,000 0 0.0% 36,569,000 License* i Permits 3,405,000 0 0.0% 3,405,000 Fines/Forfts/Penatties 1,950,000 0 0.0% 1,950,000 Use of Noney A Property 5,616,000 450,000 8.0% 6,066,000 Revenue from Other Agcy 8,530,000 0 0.0% 8,830,000 charges for current svc 4,175,000 566,390 20.8% 5,041,390 Other Revenue 600,000 0 0.0% 600,000 Trans from Other Funds 1,600,000 315,000 19.7% 1,915,000 ----- -------------- ------ -------------- General fund Revenue 94,000,000 1,631,390 1.7% 95,631,390 ......... ............ .............. Funds. Surplus (Defi-cit) (5,575,925) 5,669,427 93,502 CC �C�-��cc OC��QccihYWWWW ��W�rW��s��is� -10- BUDGET TASK FORCE EXPENDITURE REDUCTION/REVENUE ENHANCEMENT SECONDARY PLAN DETAIL Personnel M of Amount Cuts People ----------- ............ ...... City Council 5% salary increase reduced to 2% 0 Reduce Auth.Exp Attor by 1/4 MOM). Reduce interaawrnmental dues/conference$ (20,000) (37r250) Non•papartmental Setf Insurance .0001000) Electric Audit (100,000) Workers Comp (125,000) Caabining/merging menagemant such that ratio of mot to staff remains constant (100,000) (100,000) 1 Reduce visitors bureau, contract avca (130,000) interest savings on $10.2 w( 0 Refinence Civic Center Debt (671500) (622,500) Administration 5% satary increase reduced to 2% 0 3% pay. eut for ail department heads (40,000) Cut P10 and SWIM Promotions in 1/2 . (2254000) (90,000) 2 Eliminate Prod i Research (183,700) (180,000) 3 Reduce conferences expense by 25% (20,000) (468,700) City Treasurer, 51 eatery increase reduced to 2% 0 Eliminste bus license doplt position (37,335) -------------- t37,335) City Attorney 5% setary increase roducod to 2% 0 Eliminsts one attorneys position (82,916) (82,9%) City Clark 5X eatery increase reduced to 2% 0 Eliminate one Perm Part-Time Depty City Clerk (20,000) (20,000) Administrative Services 5% salary increase reduced to 2% 0 information services Division Positions (56,055) Purchasing/Cent Services Positions (35,626) Personnel Department Postions (59,604) (59,604) 1 (151,285) Library 5% set" increase reduced to 2% 0 Eliminate Library Asst (",033) Eliminate Library sr (50,568) Eliminate Tamp Personnel Hetp (10,000) cut His& funds (35,000) (141,601) -11- Personnel # of Amount Cuts People ------------ ------ ------ Economic Development Eliminate position that wilt increase funds that are repaid to general fund 0 Community Povetopment 5x salary Increase reduced to 2% 0 Secretary out to Part time (24,919) Freeze plan checker (54,5S0) Eliminate intern (10,600) Cut assoc to asst planner (7,800) Cut 2 east planner to planno aides (19,900) Reduce contract services (20,050) Eliminate 2 Bldg positions (93,861) (93,861) 2 (231,680) Fir* 5% salary Increase reduced to 2% 0 Fir* Education - two positions (394) 0 07,000) (107,000) 2 Harmt 0 Fire Protection - one position (459) (99,000) (99,000) 1 (206,000) Police 5% $story increase reduced to 2% 0 Range officer (76,000) Eliminate frozen postions (202,000) Cut one education specialist (364) ("'WI) (44,M) i Cut info specialist (55,350) (55,350) 1 Consolidate aaintenence (45,000) Repionet helicopter (300,000) Eliminate public affairs - 2 pos. (364,329) (90,000) (90,000) a Eliminate ptaroning/research - 2 pos. (344,329) (80,000) (00,000) 2 (983,231) Community services 5% eatery increase reduced to 2X 0 Public art cotiection (6,300) Cultural affairs division - 2OX (26,634) Sister cities (10,555) Project Self Sufficiency (55,000) (55,000) 1 Winter Beech Maintenance (38,700) Cut by 25% Oakview Center Services (35,000) Debt Service on Parking rued Debt (1T0,000) -------------- (342,189) -12- Personnel # of Amount Cuts paopL. Public Works SX salary increase reduced to 2% 0 Transfer expense to transportation fund (140,543) Elie Btdg Msint Super, Crew Leader and 8 'temps (170,99t3) Eliminate Crew Leader and 8 Tempg, and downgrade 2 post iam (137,017) Reduce Pk/Tree/Lndscp purchaoes (93.160) Reduce general purchases (60,000) Reduce *Iva center janitorial services (19,000) Cut contract services (03,632) (713,350) Totals (4,0384037) (11054,696) 19 .s.rsscasro C'Ceaae....11. R..... Revenue Sources: Property Taxes 0 Other Local Taxes 0 Licenses Z Pamits 0 Fines/Forfts/Penatliea 0 Use of Money & Property Jell Rental 450,000 itevetx+e from Other Agcy 0 Charges for current svc Public Narks 104,300 Library 23,240 Fire 351,000 Coffantly services 52,000 Potice 330,000 City Clerk 5,850 Comamity Development 0 866,390 Other Revenue Trans from Other Funds Meadowlark Golf Course 25,000 Cable TV Fund 110,000 Fire Joint Powers Authority 100,000 Redevelopment Agency $0,000 315,000 Totals 1,631,390 -13- • BUDGET TASK FORCE ALTERNATIVE REVENUE INCREASES E%PENDITURE REDUCTIONS Amount Revenue Increases: ---------------- Property Taxes 0 Other loot Tex" 0 Manses & Permits 0 Business license Fee Increase 160,000 OIL Barrel Tax 50,000 -------------- 210,000 Fines/Forfta/Penatlies 0 Uss of Money 6 Property 0 Revenue from other Agcy 0 Charges for Current Svc Public Works 400,700 Library 0 Fire 0 co muntiy services 0 Police 0 City Clerk 0 Community Development $33,570 -------------- 934,270 other Revenue 0 Trans from Other Funds 0 Totals 1,144,270 w�w�aa�s�■ Expenditure Reductions: ....................... Non-Departmentst Reduce Allocation - Contract services (40,000) Reduce Allocation • Contin0ency (40,000) Employee pay $50 per month toward dep medical (360t000) ------------ (440,000) Administration No Bonuses (10.000) Records retention (6,300) ..........---- (16,300) City Treasurer a 0 City Attorney Reduce operation by 25% (400,000) (400,000) city Clerk 0 .Amount Administrative Services Root estate Services (206,910) (206,910) Library Book Reductions (59,000) Reduce branch operations (53,838) (112,838) Commmity Oavolopment Niecettaneaus per bH (18,550) (1e,55o) Fire Fire Reserves (108,000) (108,000) Pot ice Shut &wn Shank Substation (100,000) (100,000) Community Services Privatire Huntington Harbor Life Guard (30,000) City Ow (165,349) Park surveillance (901208) Remaining 80 Culturst/Arts (106,534) Exhbt/Perf/Events (89,832) Ntscsttaneous per bH (70,000) (551,423> Public Works Naintenance Cuts (68,000) Rood Pump Contract Services (29,057) 4lbrary branch maintenance (3,000) .............. (100,057) TotaL Expenditure Reductions (2,054,578) Grand Total of Alternatives 3,198,848 -15- MEMORANDUM TO: HUNTINGTON BEACH CITY COUNCIL FROM: FRANK -COOPER/TASK FORCE MEMBER DATE: JANUARY IS., 1992 RE: MINORITY REPORT/BUDGET TASK FORCE Each and every member .of. your Budget. Task. Force. Comm.ittee should be complimented for their dedication to the `Governmental process. They have worked long and- hard to .develop a consensus. This Minority Report, however, has been framed for the purpose of leaving the Council with an alternative. The Budget Task Force. w.ill . recommend, for instance that I I ) .PREVIOUSLY NEGOTIATED WAGE INCREASES BE ROLLED-BACK, OR- (2) THAT PAYROLL COSTS BE REDUCED BY THE REDUCTION OF STAFF. The Minority Report will take a slightly-. different approach. The City may have to many employees - they may have to take a. wage reduction, or lay off employees .to compensate - or cut programs,. or change .them - delay purchases and change-procedures or some combination .of reductions to accomodate a balanced budget. Each Department has it's own idiosyncrasies in the total scheme of things and the. Budget Task Force, with it' s part time members and no staff — simply can' t micro-manage each Department and each line item in each budget. This recommendation is intended for the. professional Department Heads to accomplish the line item reductions., within a total budget reduction figure, department by department. The Minority Report. has reviewed the original Department Head budget reduction estimates - the Budget Task Force thoughts - the Staff recommendations and has extrapolated from each of these :to.make it' s suggestions. While the issues are relatively simple - the path to accomplish the objectives is not. One of the first items to be considered is the fact that the CITY HAS NOT:"BALANCED. IT'S BUDGET, FOR SEVERAL YEARS, FROM TOTAL INCOME, but from the accounting acrobatics of using RESERVES and '.'ONE TIME" outs.ide sources of income. If the Council is not willing to "BITE THE BULLET" they will fall into the same trap`.this year - and the day of. reckoning will be delayed another year. Probably as impor.tant .a consideration is the - OFF BUDGET - consideration of the City's lack of recognition. of the continued deterioration of it' s infrastructure. The "ONE TIME" sources of .income and .a per-centage of any MSI income. should be directly allocated-to properly reserve for infrastructure emergencies .- which-will occur. -2- REDUCTION SUGGESTIONS PROPOSED DEPARTMENT BUDGET SCENARIO f " SCENARIO 2 SCENARIO 3 CITY COUNCIL $ 266,000 NON-DEPARTMENTAL 9.714,000 $1 ,000,000 $1 ,000,000 $1.,000,000 ADMINISTRATION 1 ,310,000- 225,000 225,000 225,000 TREASURER 820,000 40,000 40,000 40,000 CITY ATTORNEY 1 ,641 ,000 85,000 100,000 100,000 CITY CLERK 422,000 20,000 20,000 20,000 ADM.SERVICES 4,469,000 500,000 225-1000 225.,000 LIBRARY 3, 398,000 225,000 250,000 250,000 COMM.DEVELOPMENT 3.792,000 225,000 250.000 250,000 FIRE 16,481 ,000 200.000 300,000 POLICE 32,829,000 400,000 600,000 COMM.SERVICES 7, 1319000 350,000 400,000 400,000 PUBLIC WORKS ' .17,278,000 750,000 800,000 800,000 TOTAL $99,575,000 $3,220,000 $3,910,000 $4,210,000 INCOME.. ENHANCEMENT..(MSI) PUBLIC WORKS $ 505,000 LIBRARY 23,000 FIRE 351 ,000 COMM.SERVICES 52,000 POLICE 330,000 CITY CLERK 6,000 COMM.DEVELOPMENT 534,000 TOTAL $1 ,801 ,000 $1 ,801 ,000 $1 ,801 ,000 TRANSFER. OF. FUNDS.-FROM ENTERPRISE TO GENERAL FUND MEADOWLARK/GOLF COURSE $ 259000 CABLE TV/FUND 110,000 FIRE/JOINT POWERS AUTH. 100,000 TOTAL $ 235,000 $ 235,000 $ 235 ,000 FEDERAL PRISONER- HOUSING PROGRAM TOTAL $ 500,00.0 $ 50090.00 $ 500,000 GRAND TOTAL $5,756,WO $6;446,000 $6,746,000