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City Council Staff Report
September 17, 2013
ITEM
Staff Report: Working outline and timeline for the development of the City of National City
Three Year Operating Plan.
BACKGROUND
The City Council of the City of National City held budget and strategic planning workshops on
April 9, April 30 and May 14, 2013. On June 19, 2013 the City Council adopted the City of
National City fiscal year 2014 operating budget and a five year Strategic Plan. The Strategic
Plan, as adopted, includes initiative 2b, "prepare a 3 year operating plan that prioritizes service
and staffing levels in preparation for sunset of district tax".
On June 6, 2006, National City voters passed a measure increasing the local sales tax by one
percent (1 %) for a period of up to ten years for the restoration of services to the community. The
local, or district sales tax (also known as Proposition D) became effective on October 1, 2006,
with an anticipated sunset date of September 30, 2016. As a provision of the measure, at the five
year mark an independent committee of financial experts was appointed to study the City's use
of the district tax and make recommendations for the second five year period. The final
committee report unanimously recommended that the district tax remain in place for the full ten
years at the full one percent.
During the drafting of the Strategic Plan, it was noted that the sunset is anticipated to occur
during the five year plan period; fiscal year 2017. While the independent committee analyzed the
ten year window of the district taxes existence, initiative 2b is intended to assess the impact of
the aftermath of its loss on services to the community and staffing. The purpose of this report is
to provide the City Council with a brief update on the efforts underway to complete the Three
Year Operating Plan.
DISCUSSION
At the direction of the City Manager, a work plan has been developed for completion of the
Three Year Operating Plan. Actions taken to date include the following:
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Staff Report: Working outline and timeline for the development of the City of National City
Three Year Operating Plan
September 17, 2013
• The City Manager held tailgate meetings with employees in each City department to
introduce the Plan and its purpose.
• A committee was established to provide oversight of this City-wide effort. The
committee members are:
o Stacey Stevenson, Director of Administrative Services
o Brad Raulston, Executive Director
o Manuel Rodriguez, Chief of Police
o Frank Parra, Director of Emergency Services
o Mark Roberts, Director of Finance
• One on one meetings were held with each department head to explain the exercise.
• Departmental instructions and worksheets were disseminated.
The district sales tax is a General Fund Revenue. In the current operating budget, the projected
district tax revenue accounts for 24% of the City's General Fund Revenue. Using the current
fiscal year as a base line, department heads have been provided with projected expenses
(personnel, and maintenance and operation) for the next three fiscal years; fiscal years 2015,
2016 and 2017. With the district sales tax accounting for close to one quarter of the City's total
General Fund Revenue, the loss of such funding is anticipated to have a significant negative
impact on service levels and staffing. As such, the exercise calls for each department to evaluate
the impact of a 24% reduction in General Fund revenue on its ability to meet expenditure
projections. As drafted, the departmental plan worksheets call for an analysis of programs and
services; a detailed description of necessary program changes, including reductions in service;
and an identification of the impacts of such changes, including the impacts on the community,
personnel and legal mandates.
Next steps in the process include:
• Completion of departmental plans on or before October 31, 2013
• A review of all submittals by the oversight committee with recommendations to the City
Manager
• Development of a City-wide Plan based on the departmental plan exercise
• Presentation of a Three Year Operating Plan to the City Council at the second City
Council meeting in January, 2014.
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Staff Report: Working outline and timeline for the development of the City of National City
Three Year Operating Plan
September 17, 2013
Project Timeline
Action
Date
Departmental Tailgates
July 31 — August 30
Department Head meetings
Week of August 26
Departmental Work Plan development
August 29 — October 31
Framework to City Council
September 17
Review of Work Plans
November 4 — November 22
Work Plan revisions / refinement
November 25 — December 9
Discussion with City Manager
w/o December 16
Presentation of Plan to City Council
January 21
FISCAL IMPACT
There is no fiscal impact associated with this staff report.
Attachments: Three Year Operating Plan Departmental Worksheet
Departmental Work Plan Instructions
CALIFORNIA
NATIONAL CITy
IYCOAPOR �7'
Departmental
THREE YEAR OPERATING PLAN
Department Name:
Department Description:
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
M&O
Total
Expenditures
*include all projected changes in expenditures, revenues and staffing (i.e. salary adjustments,
staffing increases or reductions)
Program/Service
Description:
Objective:
Proposed Changes (describe changes including the effective date and any plans to phase in
change or wind down a program if applicable)
Program Impacts
• Personnel
• Service delivery
o Do other entities (public or private) perform the same or similar service?
• Legal mandate?
• Strategic element?
• Estimated Savings
[Bullet points are provided as examples of the type of information to be included. The bullets
should not be included in the completed plan document.]
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
M&O
Total
Expenditures
CALIFORNIA
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THREE YEAR OPERATING PLAN
WORKSHEET INSTRUCTIONS
Purpose:
The Three Year Operating Plan is intended to assist the City in identifying and planning for the
impacts of significant changes in projected revenues and expenditures. The attached worksheet is
provided to facilitate your completion of this exercise.
Objective:
Based on projections for the current fiscal year, the District Sales Tax (Proposition D) accounts
for 24% of the City's General Fund revenue. As currently established by a voter approved ballot
measure, said tax is scheduled to sunset in September, 2016. At the direction of the City
Manager, all departments are asked to provide an operational outlook based on the loss of 24%
of General Fund revenue.
Deadline:
Please return the completed worksheet by the close of business October 31, 2013.
Instructions:
1. General Fund Budget — To assist you in this exercise you have been provided with a
budget table.
a. For each fiscal year, provide a projection of your General Fund revenue.
b. Your personnel costs have been projected for you. The current year (2014) is
projected based on current staffing. Fiscal years 2015 — 2017 include projected
increases in personnel related expenses (i.e health care and Workers'
Compensation).
c. Your Maintenance and Operation expenses have been held at the fy 2014 level.
d. If you are an Internal Service Fund, your worksheet will how a revenue figure
reflecting the amount that your receive from the General Fund in lieu of General
Fund expenditures.
If you are aware of any projections that will significantly impact your revenues or
expenses in fiscal years 2015, 16 and/or 17, (i.e loss of a grant, addition of additional
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Three year Operating Plan Worksheet Instructions
staff, increased costs resulting from legislative mandates, receipt of a new funding
stream) please adjust the numbers accordingly, making sure you carry over any
adjustments to future years as appropriate.
2. Program/Service — Describe the program or service that is being impacted by the
adjustment.
3. Proposed Changes — Describe what would change i.e a 10% reduction in supplies and
materials budget; reallocating 3% of personnel costs to a non -general fund revenue
stream; program operating hours reduced from 5 days a week to 3. In all cases, be
specific in describing the change.
Indicate when the change would take effect. The District Tax will expire in September,
2016 (fy 2017). For example, will you begin to effect the change in fy 2016, at the
beginning of fy 2017 (July 1, 2016), or mid -year 2017 (January, 2017)?
Do not propose a reduction in your Internal Service Charges. The Internal Service Funds
are being asked to make adjustments.
4. Program Impacts — Describe in as much detail as you can the impact of the change i.e. the
reduction in staffing will result in a $10,000 loss in fee based revenue on an annual basis;
the reduction will increase response times from 3 working days to 6 working days; the
department will cease to perform the service; the change will result in the loss of 2 staff
positions; the county will assume responsibility for providing the service. In all cases, be
specific in describing the impact.
A spreadsheet listing all of your general fund positions, along with the base salary and
loaded rate for each is provided to assist you. If you are proposing a reduction in staff,
please remember that you are reducing positions, not people. Names of employees are
provided to you so that you can see your current costs of operating your various
programs. If the changes have to be effectuated in the future, the Human Resources
Department would determine which employees are actually impacted based on
established rules.
NOTE: if you are making adjustments in two or more program or service areas, please
repeat steps 3 and 4 for each one. Do not lump them together.
5. Revised General Fund Budget — Once you have completed the exercise, recalculate your
revenue and expenditure numbers and complete the provided chart based on your
proposed adjustments.
Please return the completed worksheet to Stacey Stevenson by the close of business October
31, 2013.
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