HomeMy WebLinkAbout2/16/2005 - STAFF REPORTS (35) CITY COUNCIL
LEGISLATIVE CALENDAR - Item &A
Subject: Revised Contingency Budget
FEBRUARY 16, 2005
Summary:
This measure represents the City Manager's continuing efforts to
balance the City budget and provide for a long term fiscal recovery plan
through a combination of personnel actions including combining positions,
deleting positions, reclassifications and freezing various vacancies. The net
result is the elimination or freezing of seven positions, with an annual savings
of about $600,000.
Recommendation:
Recommending Council approve Amendment Number 5 to the Allocated
Positions and Compensation Plan adopted June 9, 2004 for the 2004-2006 fiscal
year by Resolution Number 20974.
Staff Analvsis:
Over the past two fiscal years, Palm Springs, like many other California
cities, has struggled with budget deficits. The deficits are a consequence of
several factors: reductions in State funding; significant increases in the public
employment retirement system (CALPERS) costs; escalating health care
expenditures; and continual increases in worker compensation insurance.
Responding to this budget situation, the 2003-2004 fiscal year budget
was submitted with a reduction of 16.5 positions. These reductions included
two executive positions (the Director of Information Technology, vacant due to
retirement, and Risk Manager), library positions and the privatization of street
sweeping operations. Further, to prevent reductions in safety services, two
positions, the Family Intervention Officer and Police Activities League (P.A.L.)
Officer, were civilianized. This measure reduced costs and allowed two
uniformed police officers to be reassigned to patrol operations.
The actions taken for FY 03-04 succeeded in producing a small surplus
in the Operating Funds (approximately$350,000). However, it was apparent
that costs in FY 04-05 would go up faster than revenue. Additional personal
cuts of 3.5 positions (Director of Procurement & Contracting, Deputy City Clerk
and 1.5 Library positions) were recommended, along with a number of revenue
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enhancements. Even with these cost reductions and revenue increases, the
projected deficit when the budget was adopted was $ 2.2 million.
To close this gap, a temporary 3% increase in the Utility Users Tax rate
was proposed on the November, 2004 ballot, which if approved, would
eliminate the need for further staff reductions and allow for replacing several
positions already eliminated in police, parks, recreation and the library. That
measure failed to pass. The Council is now faced with implementing all or
some of the contingency budget which was approved on September 22, 2004.
That budget contemplated the elimination of 27.5 positions, including 8 police
safety positions, and 6 firefighter positions, which would have necessitated
closing a fire station. The Director of Finance's current estimate of the FY 04-
05 Operating Fund deficit is about $1.6 million. Although most revenue
sources are trending higher than estimated, it does not appear that they will
grow fast enough to eliminate the shortfall.
Continuing our efforts to mitigate the requirement to reduce services,
we have taken several interim steps to address the current situation and
promote a long term financial recovery plan. First, the Fire Chief advocated
management reorganization by downsizing the vacant Assistant Fire Chief's
position to an Emergency Services Coordinator at an annualized savings of
about $126,000. Also, a Police Commander's position was eliminated, saving
about $200,000 per year. The Council-approved Quimby Act Park Fees have
accumulated $646,000 to date, and can be used for future enhancements to
parks or recreation facilities. The City is also in the process of analyzing the
benefits of forming Community Facilities Districts (CFDs) for new development
projects that will help pay for future staff increases in the Police and Fire
Departments.
All of the City's labor bargaining units have foregone a pay raise in
either this year or last. Additionally, the Firefighters Unit agreed to reduce
minimum manning in the event the City decided to close a fire station; the
General Unit agreed to increase their contribution to health care costs; and the
MAPS Unit agreed to cap their leave banks. These contract changes are
significant given the reality that public employees have traditionally not been
asked to "go backwards" during the bargaining process. Their cooperation
and assistance with reducing our budget deficit is appreciated and is
acknowledged here.
However, these and other measures may not be sufficient to close the
budget deficit gap. The revised contingency budget action before Council
proposes a number of position reclassifications, the net elimination of one
position, and the freezing (or unfunding) of six additional positions. This will
save about$500,000 annually.
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The Police Chief has submitted a management reorganization plan
which eliminates the remaining four Commander positions, and replaces them
with a 2 Captain/3 Lieutenant structure. The reorganization will save money
and better serve the span of control ratio for the Chief's daily operations.
Other changes in this revised contingency budget include: reducing the
City Clerk salary range from a level 70 to level 65, and reclassifying several
positions, including reducing the Library Senior Secretary to an Account Clerk;
Building and Safety Manager raised to Building Official; and the Community
Preservation Coordinator raised to Code Compliance Supervisor. Finally, there
are proposed changes in Procurement that represent changes required to fill
duties and responsibilities left by positions previously vacated. For example,
the Procurement Director's position that was eliminated reduced the
department staffing from five to four. The classification increases allow for
increasing responsibilities and job descriptions to accommodate a reduced
staffing level and still perform the required functions.
Additionally, this revised contingency budget contains six vacant
positions that will be "frozen" including: a Code Compliance Officer; Executive
Services Specialist; Human Resources Specialist II; two Police Officers; and a
Community Service Officer. The total net savings from the proposed changes
is approximately$500,000. Depending on revenue trends for FY 04-05 later
this year, additional position reductions from the original contingency budget
may be reflected in the 2005-2006 budget presented to Council in May 2005.
Moreover, the above actions represent only a part of the financial
alternatives and actions we are pursuing that will contribute to the city's long
term financial recovery.
On the revenue side, we have engaged MuniFinancial Company, the
consultants who analyzed the City's development fee structure, to look at all
other City fees for services. The goal is to recapture all or most of the City's
cost of providing discretionary services (e.g. facility rentals, parking, etc.). In
addition, the above noted CFDs would help to pay for future police and fire
costs. Also, we will be recommending a contract with an outside consultant
to provide grant-writing services. The only up-front cost to the City for this
service is a$5,000 retainer fee which includes a "grants strategic plan"
tailored to the requirements of Palm Springs. All other costs are contingent
upon the City's successful application for grants.
On the expenditure side, we are mindful that about 70% of the total
Operating Funds' costs are labor related. To achieve expenditure reductions,
the Personnel Review Committee (City Manager, ACM, Personnel Director,
and Finance Director), in conjunction with department heads, will continue to
reevaluate vacant positions for possible elimination by combining job
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classifications. Also, we will be negotiating with all bargaining units this year
and will explore benefit and salary increases tied to revenue increases.
This current year and next fiscal year are likely to be financially difficult.
If we are able to address the structural deficit as outlined above, which is only
about 1.6% of the combined revenue and expenditures, the budget discussions
for Fiscal Years 2006-07 and later should be a little easier. The costs of
pension benefits should start to level off, and maybe even decline, by that
year. The City's $900,000 "contribution" to the State's budget problems ends
in FY 05-06. The additional sales tax from Wal-Mart and other major retail
outlets, and additional Transient Occupancy Tax generated by the expanded
Convention Center, should provide increases to those two major revenue
sources.
There are, of course, major caveats to these projections. The State may
impose new demands on local governments. Natural or man-made disasters
could have a devastating effect on our tourism economy. A major stock market
decline could push Ca1PERS pension rates upward. However, on balance,
there appears to be reason for optimism.
The City Manager and staff are committed to continued scrutiny of
expenditures, pursuing creative avenues for new revenues, and overall budget
adjustments as required to maintain fiscal responsibility. Further, it is
recommended that a new policy of quarterly meetings with the Council
Finance Committee and staff take place for the purpose of building consensus
on budget estimates and review of City Manager recommendations.
David H. Read
City Manager
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RESOLUTION NO. r , ?
OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, APPROVING AMENDMENT #5 TO THE
ALLOCATED POSITIONS AND COMPENSATION PLAN,
ADOPTED BY RESOLUTION 20974.
WHEREAS an Allocated Positions and Compensation Plan was adopted June 9, 2004, for
the 2004-05 fiscal year by Resolution No. 20974; and
WHEREAS the City Council desires to amend said 2004-05 Allocated Positions and
Compensation Plan.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs, that
the Allocated Positions and Compensation Plan for positions in the City Service for fiscal year
2004-2005 is hereby amended as follows:
SECTION 1 — TITLE CHANGES ONLY
Department Classification Unit/Range
Building 001-4161 from Community Preservation Officer G 41
to Code Compliance Officer G 41
Engineering 001-4171 from Associate Civil Engineer PS 51
to Engineering Associate PS 51
Engineering 001-4171 from Traffic Engineering Coordinator G 43
to Engineering Assistant/Traffic G 43
& Development
SECTION 2 — RECLASSIFICATIONS TO AUTHORIZED POSITIONS
I Department # Positions Classification Unit/Range '
Building 001-4161 1.00 from Building & Safety Manager MX 63
to Director of Building & Safety EX 67
Building 001-4161 1.00 from Community Preservation Coordinator G 52
to Code Compliance Supervisor PS 53
City Clerk 001-1150 1.00 from City Clerk EX 70
to City Clerk EX 65
Finance 001-1330 1.00 from Procurement Specialist II PS 48
to Senior Procurement Specialist PS 54
Finance 001-1330 1.00 from Procurement Specialist II PS 48
to Procurement Specialist I PS 43
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Department # Positions Classification Unit/Range I
Finance 001-1330 1.00 from Administrative Secretary PSC 39
to Procurement Administrative Coordinator PSC 41
Library 001-2710 .50 from Senior Secretary G 33
to Account Clerk G 27
SECTION 3 —ADDITIONS OR DELETIONS TO AUTHORIZED POSITIONS
I Department Add/delete Classification Unit/ Range
Fire Admin 001-3520 delete 1.00 Fire Marshal MXF 67
Fire Admin 001-3520 delete 1.00 Fire Battalion Chief MXF 67
Fire Admin 001-3520 add 1.00 Fire Division Chief MXF 73
Library 001-2710 delete .50 Library Assistant G 23
Library 001-2710 delete 1.00 Community Services Coordinator PS 47
Library 001-2710 add .50 Family Literacy Specialist (Grant funded) G 23
Police 001-3010 delete 4.00 Police Commander (a) MXP 71
Police 001-3010 add 2.00 Police Captain MXP 73
Police 001-3010 add 3.00 Police Lieutenant MXP 66
SECTION 4— FREEZE VACANT AUTHORIZED POSITIONS
IDepartment #of Positions Classification Unit/ Range '
Building 001-4161 1.00 Code Compliance Officer G 41
City Manager 001-1100 1.00 Executive Services Specialist PSC 39
Human Resources 540-5903 1.00 Human Resources Specialist II PSC 44
Police 001-3010 2.00 Police Officer (b) P 45
Police 001-3010 1.00 Community Service Officer G 30
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(a) In Amendment #4, dated December 1, 2004, one Police Commander was deleted
bringing the Police Commander count from five (5) to four (4) FTEs.
(b) Currently, in the 2004-05 budget there is one unfunded Police Officer position, this will
bring unfunded Police Officer positions to a total of three (3).
Total authorized positions 2004-2005 Budget (Amendment#4) 449.25
Total authorized positions 2004-2005 as amended (Amendment#5) 448.25
Total authorized (unfilled) and frozen positions 2004-2005 6.00
ADOPTED THIS day of 2005.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
CITY CLERK CITY MANAGER
REVIEWED & APPROVED AS TO FORM
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