HomeMy WebLinkAbout2012 02-04 CC HA SA ADJ MINBook 94 / Page 33
02-04-2012
MINUTES OF THE ADJOURNED REGULAR MEETING OF THE CITY
COUNCIL / SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT
COMMISSION AS THE NATIONAL CITY REDEVELOPMENT AGENCY /
COMMUNITY DEVELOPMENT COMMISSION — HOUSING AUTHORITY
OF THE CITY OF NATIONAL CITY
February 4, 2012
The Adjourned Regular Meeting of the City Council / Successor Agency to the
Community Development Commission as the National City Redevelopment
Agency / Community Development Commission — Housing Authority of the City
of National City was called to order at 9:00 a.m. by Mayor / Chairman Ron
Morrison.
BUDGET WORKSHOP
ROLL CALL
Council / Board members present: Morrison, Natividad, Rios, Sotelo-Solis,
Zarate.
Administrative Officials present: Dalla, Deese, Duong, Manganiello, Norrdin,
Parra, Rodriquez, Raulston, Silva, Smith, Stevenson, Williams.
Others present: City Treasurer Mitch Beauchamp.
PLEDGE OF ALLEGIANCE TO THE FLAG BY MAYOR RON MORRISON
BUDGET WORKSHOP
COUNCIL MEETING PRESENTATIONS 2012 (102-10-6)
1. City Manager Overview
City Manager Leslie Deese, reviewed the proposed meeting agenda
topics and, with the aid of a PowerPoint Presentation, provided a detailed
mid -year budget overview. (All presentation materials are attached. See
Exhibit 'A')
2. Finance Presentation
Presentations were made by staff members Deese, Norrdin, Raulston,
Manganiello, Stevenson, Ramirez, Parra, Amedee and Consultant Michael
Bush highlighting the following topics:
FY 2011-12 Mid -Year General Fund
FY 2011-12 Community Development Commission Budget
Book 94 / Page 34
02-04-2012
BUDGET WORKSHOP (cont.)
2. Finance Presentation (continued).
FY 2012-13 Estimated General Fund Budget
Capital Improvement Program/Bond Program Update
California State Budget Update
Redevelopment Update
Proposition D Sales Tax/Independent Committee Report
Achieving Fiscal Sustainability:
a) Cost Cutting & Efficiency Measures
b) Revenue Enhancements
c) Significant accomplishments
d) Cost Reduction & Revenue Efficiency (CARE) Committee
RECOMMENDATION: The City Council approve the mid -year budget
adjustments for the General Fund and Community Development
Commission.
TESTIMONY: None.
ACTION: Motion by Sotelo-Solis, seconded by Natividad, to
approve staff recommendation. Carried by unanimous vote.
A recess was called at 11:19 a.m.
The meeting reconvened at 11:35 a.m.
All members were present.
3. Public Oral Communication
Jacqueline Reynoso, President and CEO of the Chamber of Commerce,
encouraged the Mayor and Council to continue alliances and maintain
communication with the business community and to be open to
partnership opportunities.
4. Mayor and Council
Vice Mayor Sotelo-Solis said she enjoyed the presentations and would like
to see the entire listing of CIP projects.
Member Rios thanked everyone for the presentations and said she was
very proud of our code enforcement program.
Member Zarate thanked everyone for their hard work.
Book 94 / Page 35
02-04-2012
BUDGET WORKSHOP (cont.)
4. Mayor and Council (continued).
Mayor Morrison commented on the fact that there is increasing pressure
on the City to do things that we don't have the resources to do that others
have abandoned and that there are limitations on how much our reduced
staff can be expected to do. The Mayor said overall the City is doing
relatively well and thanked everyone for their support and hard work.
ADJOURNMENT
Motion by Sotelo-Solis, seconded by Rios, to adjourn the meeting to the next
Regular Meeting of the City Council / Successor Agency to the Community
Development Commission as the National City Redevelopment Agency /
Community Development Commission — Housing Authority of the City of National
City to be held Tuesday, February 7, 2012 at 6:00 p.m. at the Council Chambers,
National City, California. Carried by unanimous vote.
City Clerk '/ Secretary
The foregoing minutes were approved at the Adjourned Regular Meeting of
August 7, 2012.
Mayor / Chairman
EXHIBIT 'A'
City Council Community Planning
& Fiscal Year 2011-12
Mid -Year Budget Workshop
City Council Chambers
Saturday, February 4, 2b12
Workshop Agenda
1. Budget Overview
2. FY 2011-12 Mid -Year General Fund Budget
3. FY 2011-12 Mid -Year Community Development Commission Budget
4. Capital Improvement Program / Bond Program Update
5. California State Budget Update
6. Redevelopment Update
7. Proposition D Sales Tax Independent Committee Report
** Break 10:30 - 10:45a.m. **
8. Achieving Fiscal Sustainability
a. Cost Cutting & Efficiency Measures; Revenue Enhancements, Cost
Reduction & Revenue Efficiency Committee (CARE) Update,
Significant Accomplishments
9. Community Input and Comment
10. City Council Comment & Direction
Community Noticing
• 246 community partners and 37 media outlets
notified via press release
• Chamber of Commerce email blast — 548
businesses/individuals
• National City boards and commissions notified
• City website posting — calendar and homepage
link
• City website email blast — 592 recipients
3
Mid -Year Budget Review
• Work begins in December of each year on
the mid -year budget review
• Mid -year review is an analysis of all city
revenue and expenditure line items during
current fiscal year
• Mid -year financial analysis provides the
financial starting point for next fiscal year's
budget preparation
4
The Foggy Crystal Ball
• National economy grew 2.8% last quarter
2011, falling short of expectations as
spending by consumers, businesses and
governments lower than projected
• Although 2011-12 showed stronger sales tax
recovery in California, most analysts believe
pace of growth will slow in 2012-13 with only
disagreement being over degree of slowdown
• Additional state budget cuts, continued high
unemployment, further declines in home
values and unstable fuel prices part of
uncertainty
The Foggy Crystal Ball
• California Bonds (TABs) on Review for
Downgrade Due to Dissolution of
Redevelopment
— Moody's, Standard & Poor's, Fitch
— 378 California Redevelopment Agencies
have $19.8 billion of tax allocation bonds
outstanding
— Backed by property taxes raised within
redevelopment areas
California Outlook
• California economy poised to
continue slow recovery;
• California creating new jobs, but risks remain;
• Statewide local sales and use tax revenues for
July thru September transactions increased
8.6% over last year's comparison quarter;
— 7th consecutive quarterly gain since beginning of
recovery
• New autos, consumer goods, fast food and
full -service restaurants show growth.
• U.S. - 8.5%
• California -11.1%
• National City -19.3% (March 2011)
National City Today
• Weathering worst economic climate since
Great Depression
• Clean financial audits of City, CDC and
Federal Awards
• City's Standard & Poors Rating is A
• CDC's Standard & Poors Rating is A-
• Limited General Fund Debt
• Continuous review of operating costs and
seeking revenue enhancements
9
National City Today
• Bradley Burns Sales Tax Not Fully Recovered
— High of $16.5 million in 2004
— Low of $8.7 million - 2010
— Projection for 2012 - $9.9 million
• District Sales Tax Stable
— $7 - $9 million projection on target
• General Fund Contingency Reserve on
1/31/11 @ $7 Million
• Future impacts uncertain due to dissolution of
redevelopment '°
FY 2011-12 Mid -Year
General Fund Budget
Financial Services Officer
Tina Norrdin
Estimated FY 2011-12
General Fund Summary
Estimated Revenue $35.6M
Estimated Expenditure ($34.8M)
Over (under) $800k
Capital Projects funded by
General Fund ( $600k)
Mid -Year Adjustments ($650k)
Over (under) ($450k)
12
General Fund - Revenue
2011-2012 FY
Budget
Projected Year -
End Actual
Sales Tax
$ 9,449,369
$ 9,910,824
Prop D District Tax
$ 8,499,000
$ 9,052,000
Property Tax
$ 1,457,243
$ 1,508,472
Property Tax in Lieu of VLF
$ 4,872,739
$ 4,931,254
Property Tax in Lieu of Sales tax
$ 3,235,456
$ 3,403,217
Other Revenue
$ 5,862,949
$ 6,807,779
Total
$ 33,376,756
$ 35,613,546
13
General Fund
- Expenditures
2011-12 FY
Budget
Projected Year
End Actual
Variance
Personnel
Services
$ 27,128,364
$ 24,496,333
$ 2,632,031
9.7%
Maintenance &
Operations
$ 11,349,377
$ 10,325,372
$ 1,024,338
9%
Total
$ 38,477,741
$ 34,821,372
9.5%
14
General Fund Mid -Year Budget
Adjustments
Department
Budget
Adjustment
Adjusted
Budget
Personnel
Compensation
$ 356,900
$ 540,000
$ 896,900
Finance (Contractual
Obligations)
-
$ 108,806
$ 108,806
Total Adjustment
$ 648,806
15
Bradley Burns Sales Tax and
District Sales Tax
General Fund Revenue and Expenditure
Forecast
$
$40
$35
2
Er".
Revenues less District Tax
Revenues with DistrictTax '.
Expenditures
National City Sales Tax
(by Sector)
6.43% 4.10%
• Autos and Transportation
• General Consumer Goods
s Restaurants and Hotels
• Fuel and Service Stations
e Business and Industry
s Food and Drugs
31.83%
NOTE: f%point of sale sales.tax (Brad..11ey B.urnsj. Does not inClu.de transact ons t
General Fund
Contingency Reserve
General Fund Policy: ... range between 25% and 50%
of a single year's General Fund operating
expenditures
• FY 2011-12 estimated General Fund expenditures =
$34.8 million
• Reserve projected at $7.5 million (21 %), which is
$1.2 million below target level of $8.7 million
($34.8 million x 25%)
19
12-
10
8
6
4
2
0
82 8.7
General Fund
Contingency Reserve
9.4 9.7 9.4
ii1111111111
03/04 04/05 05/06 06/07 07/06 08/09 09/10 10/11 11/12
*Reserve -.-25% GoaLl20
FY 2011-12 Mid -Year
CDC (TI/Low-Mod) Fund Budget
Financial Services Officer
Tina Norrdin
CDC Mid -Year
Budget Adjustments
Budget
Adjustment
Adjusted
Budget
CDC Bond Interest 2011
1,054,513
1,282,516
2,337,029
CDC Bond Interest
11,250
11,250
Low Moderate Housing
$0
42,000
42,000
Tax Increment -Non -Dept
Expert & Consultant
$0
430,000
$430,000
Tax Increment -Non Dept
Contract Services
$0
$55,000
$55,000
22
City Council Direction Requested
• Staff Recommendation: City Council
Approve Mid -Year Budget Adjustments
for:
— General Fund Budget
— Community Development Commission
(Tr/Low Mod) Budget
23
Budget Calendar - Next Steps
• February 21, 2012 Council item to summarize
recommendations and reflect mid -year changes in FY
11-12 Budget
• FY 2012-13 Budget Preparation in Feb -Mar
• Community Outreach in April
— City Council Workshop
— Neighborhood Council Meetings
— Format to be Determined
• Draft Budget to City Council in May
• Finalize Budgets for City and Successor Agency in June
• Adopt FY 2012-13 Budget no later than June 30, 2012
24
Capital Improvement Program
and Bond Update
Brad Raulston, Community Development Director
Stephen Manganiello, Acting City Engineer
tWDDxtatuatemotr
2011 Tax Allocation Bond
• CDC Sold Approximately $40 million in
Redevelopment Bonds in 2011
— $34 million available after issuance costs and
reserves
— $15 million for housing and $19 million for Capital
Improvements
— Provides major funding for CIP, but is restricted to
Redevelopment Project Area
• ABx1 26 is not Expected to Effect Use of
Proceeds (Further Oversight will be Required)
• Proceeds must be Committed within 3 Years
27
Capital Improvement Program
• Five-year Budgeting Process for Establishing
Capital Priorities
— Approximately $120 million in capital needs
identified over the 2011-2016 period
— Housing projects were included in the CIP with a
total of $59 million in needs identified
— Approximately 40 Capital Projects are currently
"active" with approximately $40 million in funds
available
— Funding sources for Capital Projects often have
restrictions (scope, timeline for expenditures, etc.)
28
Capital Improvement Program
• Capital Priorities were Established through
Criteria Based Evaluation, Community Input
and Long -Range Planning
- Key criteria considered: health & safety, project
costs & funding, General Plan consistency,
ongoing maintenance costs, & Community support
- General Plan Update was completed in 2011 and
provided blueprint for public improvements
throughout National City
- Projects were also derived from other Tong -range
planning efforts such as the City's Strategic Plan
and Specific Area Plans
29
Key Projects
• Housing
- WI-TOD (Westside Infill Transit Oriented Development)
Approved 200 new affordable family homes along Paradise
Creek (Phase 1 funded for 108 affordable family homes)
• Facilities, Parks & Recreation
— Kimball Park Improvements
— Las Palmas Park Improvement
— Aquatic Center
• Infrastructure/Community Corridors
- 8th Street Smart Growth Enhancements / SR2S
— Coolidge Ave Community Corridor / SR2S
— D Ave Community Corridor (Roundabout) / SR2S
• Economic Development
— SR-54 Gateway Project (Sudberry Development) 30
Project Funding Allocations
Current Allocations — All "Active" CIP Projects
(Including TAB 2011 Capital Improvements)
Balance.
$28,356,348.59
- - „
Expencatures,
$2,024,745.05
Total = $32,729.785.32
Encumbrances,
$2,348,685.68
laEncumbtances
• Expenditures
I 0 Bebnce
31
Skiaiiaitrr
Project Funding Allocations
Current Allocations — Tax Allocation Bond 2011
(Capital Improvements)
, . .. ....
. . Balance, •-
;$10,661,610.00 '
.., 4.
Expended.
$788,794.73
Total = $12.490.375.58
Encumbered,
31,039,970.55
• Encumberad
• Expended
O Balance
32
Governor Brown's 2012-13
Budget Proposal
• Provides for
— $92.6 billion of GF expenditures
— $39.8 billion of spending from state special funds
— $5.0 billion of bond fund expenditures
— Assumes $73 billion of federal funds
• Proposes over $10 billion of budget -balancing
actions to address $9.2 billion gap
— $4 billion 2011-12 deficit
— $5 billion shortfall for 2012-13
35
Key Budget Proposals
• Plan assumes Voters approve Governor's Tax
Initiative in November 2012
— Would temporarily increase personal income tax
(2%) on upper income filers for 5 years;
— Temporary one-half cent sales tax increase;
— Provides some constitutional protection for funds
dedicated in 2011 to counties and local law
enforcement to fund realignment of various state
responsibilities to local level.
36
Impacts to National City
• Public Safety - Maintains state subvention grants
for law enforcement
— COPS / SLESF
— Booking Fees
• Economic Development
— Enterprise Zone Reform
• Library Programs
— Tier 1 Trigger Cuts in effect since January 1, 2012
• Grants include: California Library Services Act, California Library
Literacy Services, Public Library Foundation;
— NCPL currently losing almost $90,000 this year (Literacy)
37
Further Trigger Cuts
• Over $5 Billion of Additional Cuts if
Voters Reject Tax Measure
— January 2013 if measure rejected
by voters
— K-12 schools, higher education, courts, fire
protection and a variety of park services would see
significant reductions
38
Michael P. Busch, President, Urban Futures, Inc.
ABx1 26 IS EFFECTIVE, WHAT'S NEXT?
• Where are we now?
• How does this affect local government?
• Developing your game plan
• Fiscal and Operational Impacts
• Q & A Session
WHERE ARE WE NOW?
• ABx1 26, the RDA Dissolution Bill was upheld by the Supreme
Court
• Redevelopment activities continue to be frozen
• Certain time limits contained in ABx1 26 were extended by 4
months
• RDAs are now set to dissolve on February 1
• Successor Agencies and Oversight Boards will continue to
satisfy enforceable obligations of RDAs and administer wind
down procedures
• Successor Agencies are activated on February 1
• Oversight Boards must be seated by May 1
PROHIBITED RDA ACTIVITIES
RDAs can no longer engage in any of the following:
• Incurring new debt or restructuring existing debt;
• Making loans or grants;
• Entering into contracts or amending existing
obligations;
• Renewing/extending leases or other agreements;
• Disposing of, or transferring, assets;
• Forgiving loans; and
• Acquiring real property
UNKNOWNS REGARDING
ADMINISTRATION
• Staffing Requirements
• Payroll
• Benefits
• Post Employment Obligations
• Unclear when funds will be disbursed to
successor agencies to cover administrative costs
incurred
ADMINISTRATIVE COST ALLOWANCE
Successor agencies are entitled to receive an administrative cost allowance
• Up to 5% (Approximately $700k for National City) of property tax
allocated to successor agency for FY 2011-12
• Up to 3% of property tax allocated to successor agency each fiscal year
thereafter
• Not less than S250,000 for any fiscal year (unless successor agencies agree
to a lesser amount)
• Only allocated after all other funding obligations have been met
• 1sr—Pass-Through Payments
• 2nd — Debt service payments
• 3rd — Revenue bond payments with Agency pledges
• 4th — Debts and Obligations listed in the ROPS
• 5th — Successor Agency administrative costs
• 6th — Remaining money paid to taxing agencies as property taxes
HOUSING FUNCTIONS AND ASSETS
• Cities may adopt a resolution electing to retain housing assets and functions
previously performed by the RDA
Alternately, if the sponsoring jurisdiction elects not to retain such assets
and functions, it may select a local housing authority in the jurisdiction
of the former RDA to receive housing assets
• All rights, powers, duties and obligations of the former RDA would be
transferred to the entity retaining its housing assets and functions
Starting 2/1/12, the entity assuming the housing functions formerly
performed by the RDA may enforce affordability covenants and perform
related activities pursuant to applicable provisions of Redevelopment
Law
• Inconsistent provisions re: transfer of unencumbered balance remaining
in the LMI Fund; SB 654 (Steinberg)
HOW DOES THIS AFFECT US?
Effective, February 1st:
• RDAs are dissolved
• Successor agencies take over
• Properties and assets of the RDAs are under control of the
successor agencies
• Includes cash or cash equivalents and any amounts owed to
the RDA as of 10/1/11
• Loans, agreements between RDAs and their sponsoring
jurisdictions generally invalid
• Exception for certain loans from sponsoring jurisdictions to
RDAs related to the establishment of the RDA
• Only within two years of the establishment of the RDA
AFTER FEBRUARY 1ST - LIFE GOES ON
• Successor agency creates a Redevelopment Obligation Retirement Fund
within its treasury to be administered by the successor agency
• Successor agency continues to make scheduled payments for only those
enforceable obligations included on the EOPS
• EOPS will need to be adopted by the Oversight Board as soon as it is formed
• Successor agencies are prohibited from accelerating payments on EOs or
making lump sum payments intended to prepay loans unless accelerated or
lump sum payments were required prior to 10/1/11
• Successor agencies wishing to enter or reenter into agreements with
sponsoring jurisdictions must request approval of their respective oversight
board
• Includes administrative agreements, budgets, etc.
All successor agency actions subject to Oversight Board approval
AFTER FEBRUARY 1ST - LIFE GOES ON
• County Auditor -Controller creates a Redevelopment Property
Tax Trust Fund for each former RDA in the County treasury
to be administered by the County Auditor -Controller
• If no local agency elects to serve as successor agency, a
"designated local authority" will be formed in the County
"immediately," and Governor will appoint 3 County residents
to serve as governing board of the authority
OVERSIGHT BOARD ACTIVITIES
• All Oversight Board decisions subject to DOF approval
• DOF has 3 days to request info and 10 days to disapprove
• County Auditor -Controller audits of each RDA's assets and
liabilities to State Controller by July 15 (March 15 in
subsequent years)
• Upon approval by State Controller and DOF, tax increment goes
into a Redevelopment Property Tax Trust Fund for each former
RDA in the County treasury to be administered by the County
Auditor -Controller
• Other tax increment and RDA revenues and asset proceeds paid
to the County, the school districts, and other taxing agencies
• Fiduciary responsibilities to holders of enforceable obligations
and taxing agencies
OVERSIGHT BOARD SELECTION
• Oversight Board is required to be seated by 5/1/12
Membership must be reported to DOF
Governor can fill any Oversight Board vacancies that remain on 5/15/12
• Successor agency staff should consider their role in coordinating the
establishment of the oversight board
ABx1 26 does not clearly designate who is responsible for this task
• Important fiscal implications
• Horse trading may be unavoidable
• Oversight Board members serve without compensation or reimbursement for
expenses
• Seek out individuals who will work together for the good of the community
OVERSIGHT BOARD MEMBERSHIP
• Various taxing agency interests will be represented
• One member appointed by the Mayor
• One member appointed by County BOS
• One member appointed by largest special district, by property tax share,
with territory in boundaries of former RDA
• One member appointed by Chancellor of California Community
Colleges
• One member appointed by County Superintendent of Schools or County
Board of Education
One member of the public appointed by the County BOS
One member appointed by Mayor from the recognized employee
organization representing the largest number of former RDA employees
employed by the successor agency
UPDATED ROPS
• Draft ROPS to be provided to successor agency and County by 3/1/12
• Should be based upon updated EOPS document finalized prior to 2/1/12
• Must describe anticipated funding source for each EO, which may include:
• LMI Fund
• Bond proceeds
• Reserve balances
• Administrative cost allowance
• Redevelopment Property Tax Trust Fund
Other income (rent, concessions, asset sale proceeds, interest earnings,
etc.)
• Required to cover time period from 1/1/12 through 6/30/12; include fall debt
service payment(s)
UPDATED ROPS (coNT.)
• Must be adopted by the Oversight Board as soon as it has been seated
• Must be submitted to SCO and DOF by 4/15
• ROPS becomes fully effective on 5/1/12
• Successor agencies are limited to making scheduled payments toward
only those enforceable obligations listed on the ROPS
• ROPS supersedes the Statement of Indebtedness
HOW DOES THIS AFFECT US?
• Unused bond proceeds may be liquidated
• Oversight process will make it harder to implement projects
• Bonds may go into default
• ABx1 26 makes bond payments subordinate to taxing
agency payments
• Potential for different agendas regarding former RDA assets
DEVELOPING YOUR GAME PLAN
• Get ready to negotiate!
• Unused bond proceeds may be liquidated
• Oversight process will make it harder to implement projects
• City loans will generally go unpaid, affecting fund balances
• Revenues will be reduced for the foreseeable future
• Bonds may go into default
• ABx1 26 puts bond payments behind taxing agency payments with a
savings feature; it may fail
• Oversight Board members may disagree with City re: disposition of buildings
and other assets to devoted to governmental uses
• Admin money may be less than 5%/$250,000
• Let your City Council know it is going to take a long time to recover
DEVELOPING YOUR GAME PLAN
• Take an active role in the selection of the Oversight Board
• Develop a cash flow plan
• Consider delaying or eliminating capital projects
• Avoid funding projects that will require ongoing operating costs
• Determine a hard estimate for employee costs and pension obligations
• Review your employee agreements in case layoffs are required
• Determine if there is any interest in retaining any former RDA properties
• If so, start working on your pitch to the Oversight Board
• Compensation agreement would be required with other taxing entities
for the value of the property retained; if no agreement reached, property
value would be based on fair market value as of 2011 tax lien date as
determined by County assessor
• Possible other treatment for properties devoted to governmental use
DEVELOPING YOUR GAME PLAN
• Consider City budget item for successor agency admin, if necessary
• Develop a realistic staffing proposal for the Oversight Board
• Taxing agencies may be willing to provide financial assistance to the
successor agency if they understand how they benefit
• Start considering other funding mechanisms for economic development and
capital improvements
• Infrastructure Financing Districts
• Business Improvement Districts
• Mello -Roos and other assessment districts
• Many other options are out there!
FISCAL AND OPERATIONAL
IMPACTS TO NATIONAL CITY
QUESTIONS?
Proposition D Sales Tax
Independent Committee Report
Human Resources Director
Stacey Stevenson
National City Proposition "D"
District Sales Tax
• One percent (1 %) sales tax passed by voters
(June 2006);
• Ten year sunset (2016);
• Five year review required (2011) by fiscal
experts to:
— Remain in effect at the rate of 1 %;
— Be reduced to a lesser rate;
— Be terminated.
61
Proposition "D"
Independent Committee Report
• Committee Appointed September 2011
• Committee Members:
— Marney Cox, Chief Economist, San Diego Association of
Governments
— Chris Cate, Vice President, San Diego County Taxpayers
Association
— Dale Nielsen, Finance Manager and City Treasurer, City of
Vista
• Committee Recommendation
— National City continue its use of a one -cent sales
tax increase approved by the voters in 2006 62
Proposition "D"
Independent Committee Report
• Report excerpts:
• Root cause of National City's GF structural
deficit stems from three factors:
— Rising GF budget expenditure commitments
beginning in FY 2005-06;
— Fall in sales tax revenue due to the effects of the
Great Recession;
— Revenue that the State has reduced or taken away
from local governments, including National City, to
help cover its own budget deficits.
63
Proposition "D"
Independent Committee Report
• Report Excerpts (continued)
• "...Clearly, two of these factors are beyond the
control of the city, yet the council and staff
must deal with their impacts."
• "...The largest challenge the city faces is
implementing a financial plan that will allow the
city's general fund to free itself from the need
of the Proposition D sales tax revenues by the
time that they expire on September 30, 2016."
64
Assistant Chief of Police
Manuel Rodriguez
✓ Achieving Fiscal Sustainability
• City Council directed the following measures be
taken:
— Cost containment
— Efficiency
— Revenue Growth & Diversity
— Building Reserve Levels
— Reviewing Retirement Obligations
— Implementing new Employee Contribution
Programs (Pension Reform)
— 10-year financial trending, conservative
forecasting
— Assuming limited debt
67
Achieving Fiscal Sustainability
• CARE Committee
— Employee Driven
— Quarterly Newsletters
— Cost Saving Ideas — 900 suggestions
• Purchasing Review Committee
— Any purchase above $500
• Position Review Committee
— Must make business case for each position
requested
68
Cost Cutting & Efficiency Measures
• City has been engaged in continuous
improvement, streamlining the
organization to maximize efficiency &
effectiveness, striking a balance
between controlling costs & meeting
community needs
69
NATlUt &L tI
114,
Cost Cutting & Efficiency Measures
• Innovative Approach
—One-Time Stipends (since 2006)
—City Manager directed Unblended Retiree
Health Care (2009)
— Employee Work Furlough Program (2010
through 2013)
• 40 hour furlough
• Savings of approximately $150,000,
annually
70
Cost Cutting & Efficiency Measures
• Consolidating & Restructuring
— Council directed CDC merger with City (2006)
— Building & Planning merged (2008)
— Housing & Grants created (2008)
— Neighborhood Services created (2008)
— Purchasing consolidated into Finance (2009)
— Planning, Building & Engineering merged (2009)
— Parking Enforcement moved to Neighborhood Services
(2010)
— Abandoned Vehicle Abatement Program moved to
Neighborhood Services (2010)
— Consolidated the organization to 5 departments (2011)
• 18 executive & management level positions eliminated
— Savings of approximately $2,413,710 71
Cost Cutting & Efficiency Measures
• Managed Attrition
— Vacancies occur thru normal attrition, non -essential
positions frozen
— Salary & employee benefits savings
• Employee Voluntary Separation Program
— Innovative Hybrid
— Long term salary & employee benefits savings
— 29 employees separated saving approximately $3
million in salaries & benefits
• 75 positions Citywide
— 60 positions frozen and/or unfunded
— 15 positions vacant
— Annual savings $6,652,784 (includes salary & benefits)
72
Cost Cutting & Efficiency Measures
• Employee Cost Sharing
- 100% of eligible employees contribute to employee share
of retirement costs;
• 2006 — No City employee contributed to their retirement
• 2009 — 89% of City employees contributed to their retirement
• 2011 —100% of City employees contribute to their retirement
— Two -tiered retirement formula for both miscellaneous and
safety employees;
— Equal cost sharing of medical and dental plan premium
increases.
73
Cost Cutting & Efficiency Measures
• No increase in trash service rates for
approximately 5 years. No change
anticipated.
• No increase in sewer service fees for past
6 years, No change anticipated.
74
Director of Emergency Services
Frank Parra
Revenue Enhancements
• Revenues from Prop D temporarily fixed
the fundamental problem of more
money going out than coming in
• Challenges NC to become proactive in
building stable and diverse revenue
sources within next couple of years
• NC continues to pursue new, and
enhance existing revenue sources to
recover cost of providing programs and
services
76
Revenue Enhancements
• Filled 5 Big Boxes
• Marina Gateway Development
— $61 million project
• Plaza Bonita Mall Expansion
— $134 million project
• Paradise Village Senior Housing Project
— 498 housing units
— Largest residential project in NC's history
77
2011-12 Revenue Enhancements
• Fire
— Contract negotiations w/Lower Sweetwater resulted
in new Equipment Fund of $531,439;
— AMR early renewal of contract resulted in net
increase in franchise of $120,000;
— Fire Cost Recovery resulted in $52,540 since
inception.
• Housing & Grants
— Identified and will reallocate next FY $3.1 million in
CDBG and HOME funds.
• Public Works
— Sewer Audit resulted in approx $2 million of refunds
from overcharges;
— Anticipated savings this year at $562,428.
78
2011-12 Revenue Enhancements
• Neighborhood Services
— "Graffiti Tracker" - pending recovery estimated at
$62,000
• Nutrition Center
— Increased average daily attendance equaling
additional grant funds from County of $44,488.
79
N
Cost Reduction & Revenue
Efficiency (CARE)
Committee Update
Homeland Security Manager
Walter Amedee
80
CARE Committee
• City Manager established C.A.R.E.
Committee in 2005
• 2005 — 466 ideas obtained
• 2009 — 706 ideas obtained
• 423 ideas via survey
• 283 ideas via brainstorming sessions
• Eliminated redundant, non -feasible ideas
• Final List — 226 ideas
81
CARE Committee
• 226 ideas submitted for Department
Head review
• Presented at Budget Workshop on
May 25, 2010
• 81 Ideas Submitted By
— Labor Groups
• Police Officers Association (POA)
• Fire Fighters Association (FFA)
• Municipal Employees Association (MEA)
82
Cost Saving Ideas
Ideas Submitted by 1-Time Ongoing
Incentive Based Retirement Options
MEA, POA,
FFA
X
Do not fill vacant positions
MEA
X
Close Recreation Centers one day a
week or reduce hours per day
DH
X
Close Senior Center on Sundays
DH
X
Close Pool on Sundays
DH
X
Charge for "fix it" ticket sign -offs
POA
X
More stringent energy conservation
POA
X
More stringent water conservation policy
POA
X
Surplus obsolete fire and fleet vehicles
DH
X
83
Cost Saving Ideas
Ideas Submitted by 1-Time Ongoing
Ensure tire pressure in vehicles is at
utmost efficient level for fuel economy
POA
X
Apply for COPS Grant available for cities
facing layoffs of police officers & decline
In public safety
POA
X
Recoup DUI -related incident costs from
DUI suspects
POA
X
Temporarily suspend CDBG funding
allocations to outside entities
DH
X
Reduce Department Maintenance &
Operations (M&O) Budgets
All Depts.
X
Reallocate when possible General Fund
salaries to other funds
All Depts.
X
Use recycled paint for graffiti removal
DH
X
84
Cost Saving Ideas
Ideas Submitted by 1-Time Ongoing
Reduce city mailings only as required
DH
X
Renegotiate Lower Sweetwater Fire
Services Contract
FFA, DH
X
Amend Paramedic contract and move
RCCP to pass -through account
FFA, DH
X
Fire response cost recovery
FFA, DH
X
Enhance Fire plan reviews
DH
X
Reduce number of School Resource
Officers by half
DH
X
Restructure Vendor Payment Schedules
MEA
X
Reduce or eliminate sponsored & co-
sponsored special events
POA
X
85
Cost Saving Ideas
Ideas Submitted by 1-Time Ongoing
Fill federally funded task force positions
which could reduce City payroll
POA
X
Drop to 3-firefighter staffing level when
4th person out
Dept.
X
Consolidate summer camps from three
centers to one
DH
X
Coop with other agencies to share costs
of special events (Fireworks, National
Night Out, Public Safety Fair)
DH
X
Reduce TOD Project scope
DH
X
Eliminate quarterly NHC breakfast
mailings
DH
X
Reduce or eliminate NHC Breakfasts
DH
X
86
CARE Impact
• Psychological
• Mental
• Fiscal
• Ideas
— Create Revenue
— Create Efficiencies
— Reduce Expenditures
87
Obarosfe?*D
Significant Accomplishments
FY 2011-12
Assistant City Manager
Leslie Deese
Significant Accomplishments:
Police Department
• Dedicated squad to monitoring sex registrants
(290's). Squad conducted compliance checks
and completed swift follow-up concerning any
290 registrant in violation. This reduced
violation rate from approximately 9% to less
than 2%;
• Residential Burglary reports declined 24% (103
reports in 2011 vs 136 reports in 2010);
• Violent Crime reports declined by 13%
(Homicide, Rape, Robbery, and Aggravated
Assault).
89
Significant Accomplishments:
Fire Department
• Enhanced emergency services to our community
— Paramedic first responders all shifts all units;
— Enhanced public access defibrillation
— Enhanced dispatch with AVL — closest unit dispatch
— Community CERT Classes
— Smoke detector program
— New fire truck
• Completed update of the City's Emergency
Operations Plan
90
NATIO �.at,
Significant Accomplishments:
Library
• National City Public Library continues to be named
"American Star Libraries" by the Library Journal Index
of Public Library Service 3 years in a row since 2009;
• Expansion of volunteer opportunities that can assist
staff with ongoing daily tasks and programs (book
mending, shelving, public service support, activities
and more);
• Collaboration with Southwestern College in mutually
beneficial partnership through which college students
enrolled in the Federal Study Program are placed at
host sites to offer free family literacy services to
community.
91
Significant Accomplishments:
Community Services
• Restructured Neighborhood Councils from 7
monthly meetings to 3;
• Enhanced senior wellness programs
— Monthly blood pressure checks
— Healthier snack options at Kimball Senior Center
— More exercise options at Casa de Salud
• Increased recreational programs
— Adult soccer league (205 residents)
— Contractual classes, i.e., Zumba, Full Body Aerobics,
Ballet Folklorico
92
Significant Accomplishments:
Information Technology
• Upgraded Dispatch 911 backend (Servers
and Directory Services that allow
dispatchers to log 911 calls and provide
information to officers in the field)
• Installed public access Wi-Fi at Public
Library; in process at City Hall, Police
Department, and Martin Luther King, Jr.
Community Center;
• EOC relocation to Fire Station 34 (added
Interactive Smartboard)
93
Significant Accomplishments:
Development Services
• Customer Service
— Streamlining of Business Licenses
— Implemented New Permit Tracking Software
— Improved Customer Service with One Stop
Counter and Timely Inspections
• Community Outreach
— Completed Safe Routes to School Education
& Encouragement Initiative (CPPW Grant) for
all 10 Elementary Schools Citywide
94
Significant Accomplishments:
Development Services
• Projects in Construction:
- Civic Center Data Center / Redundant AC
— City Hall Chiller Replacement
— Citywide Concrete Improvements
• Projects in Final Design:
- 8th Street Smart Growth / Safe Routes to School (Harbor Dr to
Highland Ave)
— 8th Street Safety Enhancements (Highland Ave to Palm Ave)
— Coolidge Ave Community Corridor / SR2S
— D Ave Community Corridor (Roundabout) / SR2S
— Citywide Safe Routes to School (Phase III)
— CDBG Pedestrian / ADA Enhancements
• E. 9'" Street (Euclid Ave to Harbison Ave)
• E. 4th Street at El Toyon Park
• National City Blvd at Public Library
• E. 30th Street at Sweetwater High
95
Significant Accomplishments:
Development Services
• "Competitive" Grants Received
— $500,000 Federal Safe Routes to School Grant for
delivery of a 5-Year Sustainable SRTS Program
Citywide
— $300,000 Community -Based Transportation Planning
Grant to prepare a comprehensive sustainable
transportation systems plan to enhance mobility,
access and safety Citywide and encourage multi -
modal transportation (i.e. walking, bicycling, transit)
— $355,500 Bicycle Transportation Account Grant to
implement bicycle lanes and traffic calming as part of
the 4th Street Community Corridor Project
96
Significant Accomplishments:
City Attorney
• Work on bond team getting 2011 Tax
Allocation Bonds to market in record
time;
• Tow contract RFP completed and
awarded without legal challenge;
• Worked on approximately 300 requests
for legal services in the past year with
reduced staffing.
97
Significant Accomplishments:
Redevelopment
• Comprehensive Land Use Update, which
included a General Plan Update, Land
Use Code Update, and Climate Action
Plan
• Marina District Vision Plan
• Completed Mile of Cars Freeway Signs
98
Significant Accomplishments:
Public Works
• Retrofit civic center HVAC and automation system, City
owned streetlights, and solar thermal installation for
municipal pool
— Estimated savings of $116,499 for first year;
— Annual audits.
• Street lighting retrofit program
— Estimated annual savings of $40,000 in electricity
costs along with $38,600 in energy efficiency rebates
from SDG&E in 2011.
• Water efficiencies:
— Reduced water usage by 25%
— Achieved annual savings of $2,000 by adjusting irrigation clocks,
adding low -flow sprinkler heads, and drought tolerant 99
landscaping.
Significant Accomplishments:
Housing & Grants
• Identified $2,669,905 in CDBG/HOME
program income and $485,000 in
unexpended CDBG/HOME funds;
• Completed construction/rehabilitation of
18 affordable housing units at 1820 G
Avenue (8) and 304 E. Fifth (10);
• Received a SEMAP (HUD Section 8)
score of 96% which placed our agency in
the high performing agency category.
100
Nal
Significant Accomplishments:
Neighborhood Services
• Homeless Program — Implementation of
Enforcement and Abatement Procedures /
Policy
• Vendor & Business License Enforcement
— Delinquent Accounts
— Special Holiday Enforcement
• Vacant/Foreclosed Property Compliance
101
tios
Significant Accomplishments:
Finance Department
• Completed Annual State Controllers' Report and Audited
Financial Report on time with a clean Audit Report
• Established services with Chandler Asset Management and
County of San Diego to provide investment management
services on behalf of the City;
• Completed Banking Conversion with Union Bank on
January 3, 2012 and Payroll on January 18, 2012
102
Significant Accomplishments:
Human Resources
• Completed labor negotiations with all three formal
bargaining groups;
• As a part of the City's cost savings initiative, oversaw
two rounds of employee voluntary separations resulting
in 29 separations with salary savings of $2,147,056
(base salary)
• Implementation of on-line employee benefits system.
— Increase employee access to information;
— Give employees greater control and flexibility in managing their
health care options;
— Reduce Human Resource's manual processing time, allowing
staff to focus on other critical issues.
103
• Significant strides made by all City departments
to cut costs, become more efficient and enhance
revenues
• Significant achievements were made in the
delivery of critical services & programs,
technology and communication
• City Council's priority of public safety and quality
of life were able to be met as a result of
Proposition D revenues
• There's still more work to be done!
City Council
Comment & Direction