HomeMy WebLinkAboutStaff Report-) CALIFORNIA —
TI. NAL CIr' r
INCORPORATED ✓
City Council Staff Report
January 21, 2014
ITEM
Staff Report: Presentation of the City of National City Three -Year Operating Plan for Fiscal
Years 2015 through 2017; presentation of high level findings from a recent community survey
report; and request for authorization for the development and drafting of a proposed ballot
measure to extend the City's existing voter -approved ten-year district sales tax beyond 2016 to
maintain the City's public safety services, prevent cuts to police and fire services and ensure
adequate funding for parks, libraries and other City services, with no tax rate increase.
PURPOSE
The City of National City currently receives revenue from a district sales tax. The tax measure,
known as Proposition D, was passed by voters in 2006, adding a one percent (1%) tax to the
purchase of taxable goods' and services in National City, with all proceeds staying in National
City — none of these proceeds can be taken by the State. As written and enacted, this district tax
has a built in sunset and will expire in September 2016 (Fiscal Year 2017). Due to current
economic factors that could not be foreseen when the measure was adopted, the discontinuation
of this vital funding is projected to have a significant impact on the City's ability to provide the
level of police, fire and other services on which National City residents and local businesses rely.
Based on forecasts using currently available data, the City will not be able to maintain the
current level of service provided to National City residents and businesses, including fire and
police protection services in the foreseeable future. The purpose of this report is to discuss the
projected impact of the loss of this local revenue through the presentation of a three-year
operating plan for Fiscal Years 2015 through 2017 and recommend options moving forward.
BACKGROUND
Resulting from factors such as State of California takeaways, stagnant property tax revenue and
increased pension obligations (resulting from Ca1PERS investment losses), the City of National
City's annual General Fund operating budget for Fiscal Year 2005 forecasted a $4 million
structural deficit; and the Fiscal Year 2006 budget forecasted a $6.7 million structural deficit. As
the City Council is aware, police and fire services comprise the largest component of the General
Items such as groceries (non -prepared food), prescription medication, rent, mortgage and utilities are exempted
from the district sales tax.
Page 2
Staff Report — Presentation of Three -Year Operating Plan
January 21, 2014
Fund, representing over 70% of the General Fund budget. Required by law to present a balanced
budget, with the authorization of the City Council, staff closed the budget gaps through the use
of reserves and other one-time revenue sources. City services were cut by 20% across the board
and 51 positions were frozen City-wide, including the shuttering of library hours and the
reduction of 17 fire and police personnel.
In response to the above, in June, 2006, National City voters approved a ballot measure to levy a
one cent sales tax with the provision that the tax expire or sunset after ten years (September
2016). With the locally -enacted funding in place, the City began to restore programs and services
critical to the safety and well-being of National City residents including restoring fire and police
personnel, ensuring adequate funding for parks, libraries and other City services while
maintaining local control over these funds.
The City also developed and executed policies and practices to maintain fiscally conservative
spending plans, while cultivating new revenue streams such as the initiation of redevelopment
projects. Cost cutting included local pension reform (preceding State measures). Revenue -
generating projects such as the development of the Marina Gateway, the Plaza Bonita expansion
and planned residential and commercial projects (i.e. the opening of a Costco, the opening of a
Lowes Home Improvement store and the redevelopment of the downtown corridor) were
initiated.
Due to circumstances outside of its control, the City faced additional fiscal challenges, beginning
in 2008 with the onset of the global recession, the recovery from which still is not complete, and
including, in 2011, the State -mandated dissolution of redevelopment agencies — eliminating
millions in state funding that National City has relied on for economic development, anti -blight,
and other programs. The recession and Sacramento money grabs created significant challenges to
the City through the loss of investment income and revenue streams intended to bring projects to
National City that would increase the City's tax base.
The impacts of the recession have global and unprecedented and National City has not been
immune. The City's primary sources of revenue are taxes received from auto sales, retail sales,
and the lumber industry. The crippling of the economy led to job loss, thus slowing the purchase
of "luxury" items (new cars) and discretionary goods (retail sales) and bringing construction to a
near halt. , and the City's lumber industry suffered. In addition, retailers closed existing stores
and terminated plans for expansion, further impacting National City with the loss of both
existing revenue and new revenue. Local big box stores Circuit City, two Mervyns, and Ralphs
closed. And plans for new national chain and home improvement store openings in National City
and elsewhere were called off. The anticipated new businesses would have generated additional
revenue for the City; this revenue was expected to replace the district sales tax revenue.
In 2011, at the half -way point of the district sales tax, as required by the ballot initiative, an
evaluation committee composed of financial experts from outside of National City was
2 The City's main operating fund that pays for basic City services that use most of the City's tax revenue, such as
fire and police safety, inspection services and recreation programs. The General Fund is also supported by fees from
licenses and permits, fines, and investment earnings.
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Staff Report — Presentation of Three -Year Operating Plan
January 21, 2014
convened. This independent committee was charged with determining whether the sales tax
should remain in effect or whether the City Council should reduce the rate of the tax or terminate
it altogether. After reviewing the City's financial records and interviewing members of the
executive staff, the committee concluded that, despite the City's many efforts at fiscal
sustainability, continuation of the district sales tax for the second five-year period was necessary,
based on the City's continued revenue needs. In its report to the City Council recommending the
continuation, the committee stated:
"Although the lists below are not comprehensive, the selected actions provide a sampling
of the range and magnitude of the actions taken to adequately confront and prevent the
structural deficit challenge from spiraling out of control. It seems clear that despite all of
the actions taken to close the City's recurring structural deficit it would spiral out of
control without the revenues temporarily being provided by the District Tax. For this
reason the District Tax should remain in effect." (Report attached)
During the development of the Fiscal Year 2014 budget, at the request of the City Manager, the
City's financial advisor analyzed other available revenue streams as possible replacements for
the existing, voter -approved district sales tax. The report of the analysis, presented during the
May 14, 2013 budget workshop concluded it was unlikely any other measures would generate
the same level of revenue. As importantly, some of the other measures (i.e. utility user tax,
benefit assessment district, community wide benefit assessment, and business license fee
increase) would transfer the tax burden solely to National City residents and businesses. In
contrast, the district sales tax is paid in significant part by visitors shopping and dining in
National City.
Today, the City continues to be fiscally conservative and frugal with our use of taxpayer dollars.
Departments have been consolidated, workflow efficiencies implemented, public private
partnerships formed, and spending and hiring practices closely monitored. Savings and
efficiencies have been realized through such measures as a partnership with the YMCA to
provide aquatic and recreation programs on the City's behalf. Staff is currently negotiating a
leasing agreement to modernize the City's fleet of light duty vehicles, which is intended to
realize reduced replacement costs and generate savings in fuel and maintenance expenses.
While the current year's budget is projected to be stable with a modest General Fund operating
surplus, during preparation of the budget and the City's five-year strategic plan, staff raised
concerns about future years. Expenditures are expected to significantly increase while revenues
are expected to decrease leading to a deficit by Fiscal Year 2017. It is also important to note that
the City's Facilities Maintenance and Equipment Replacement Reserve Funds are underfunded.
As a cost savings measure, the City as deferred repairs to several of its buildings and
replacement of the City's fleet of light and heavy duty vehicles. If we further put off these repairs
and replacements, the costs will continue to escalate.
Consistent with Element 2b of the City Council adopted five-year strategic plan, staff committed
to return to the City Council in January 2014 with a three-year operating plan outlining how the
City's service delivery will be affected with the loss of $9.7 million in revenue.
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Staff Report — Presentation of Three -Year Operating Plan
January 21, 2014
DISCUSSION
The existing, voter -approved district sales tax provides approximately 22% of the General
Fund's operating revenue. City staff has begun the process of developing an action plan to
address this significant reduction in revenue. Using the current fiscal year as a baseline, all City
departments were asked to prepare a three-year operating plan through Fiscal Year 2017. The
premise of the plan is to project revenues and expenditures over the three year review period and
illustrate the impact on service delivery as a result of those changes.
After factoring considerations such as the impact of internal service charges and the margin of
error in estimating revenues and expenditures, all departments, including Fire and Police, were
directed to plan for a 24% reduction in general fund operating revenue in Fiscal Year 2017 when
it is expected that the City will be dealing with the more than 2700 parolees that the State will
have released in our region. Our City has continuously made public safety a top priority to
address the fact that National City still has one of the highest crime rates in the County. We
simply cannot afford to cut public safety services further by reducing gang and drug prevention,
police officer staffing at local schools, neighborhood police patrols, and graffiti removal.
Further we must maintain firefighter/paramedic staffing and keep the Euclid Fire Station open.
The district sales tax is a General Fund revenue. Therefore, the revenues and expenditures
contained in the three-year plan are limited to the General Fund. All figures represented for
Fiscal Years 2015 through 2017 are estimated based on data currently available and historic
trends. All projected revenues and expenditures are, of course, preliminary and subject to
change.
Relative stability in revenues is forecasted for Fiscal Years 2015 and 2016 with modest increases
in Bradley Burns' and District Sales Taxes (see table below). In those same years, pension
obligation payments are anticipated to increase. The California Public Employees' Retirement
System (CaIPERS) announced a plan to address the system's under funding through changes in
actuarial and investment assumptions. These changes are anticipated to result in significant rate
increases in Fiscal Years 2016 through 2020. As a result, most City departments show no
changes in projected budgets for Maintenance and Operations in these two years, with increases
in personnel costs related to negotiated step increases, pension costs and health care.
3 The State-wide local sales and use tax imposed under the Bradley -Burns Uniform Sales and Use Tax Law with
6.5% distributed to the State, 0.75% to the local jurisdiction and 0.25% to local Transportation Fund.
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Staff Report — Presentation of Three -Year Operating Plan
January 21, 2014
Property and Sales Tax Projections
FY 2014
FY 2015
FY 2016
FY 2017
Bradley Burns
$11,358,170
$12,122,001
$12,533,894
$17,300,786*
District Sales Tax
$9,418,000
$9,506,405
$9,707,493
$2,497,249**
Property Tax
$3,361,383
$3,463,904
$3,533,182
$3,603,846
Property Taxes
Allocated
($1,481,210)
($1,526,386)
($1,556,914)
($1,588,053)
Property Tax in Lieu
of Sales Tax
$4,093,008
$4,219,170
$4,177,965
0*
Property Tax in Lieu
of VLF
$5,185,350
$5,452,625
$5,561,678
$5,672,911
Other
$10,413,689
$9,167,536
$9,319,517
$9,478,232
Total
$42,348,390
$42,405,255
$43,276,815
$36,964,971
Sales tax projections provided by HdL
* assumes that the Triple Flip deduction will sunset in FY 2016.
** reflects final district sales tax distribution.
Under the terms of the existing, voter -approved measure, the district sales tax will expire in
September 2016 (Fiscal Year 2017). In estimating revenues to expenditures for Fiscal Year 2017,
factoring in the loss of the district sales tax, staff projects a structural deficit of $8 million.
In completing this exercise, departments were directed to back internal services charges out of
their budget projections prior to calculating the 24%. Likewise, departments could not apply
reductions in internal service charge expenditures towards the 24% goal. Instead, departments
that are funded, in whole or in part, through internal services charges were required to realize the
reductions in their budgets4. Those departments receiving internal service charges are
Management Information Systems, Public Works and Risk Management.
A 24% reduction in the Fiscal Year 2017 estimated General Fund Operating budget of
$41,997,742 is significant with major impacts on staffing and services. A 24% reduction equates
to a loss of $10,079,458. As a result:
• All City departments project significant reductions in operations in Fiscal Year 2017.
• Maintenance and Operations (M&O) budgets are projected to decrease by 3.2%.
• Personnel budgets are projected to decrease by 22.3%
• Personnel is projected to decrease by 30.65% City-wide, the full-time equivalent of 90.56
staff positions. Full-time equivalent (FTE) is defined as a total of 2,080 working hours
per fiscal year. FTE's and people do not match up on a one for one basis. Some of the
positions proposed to be eliminated are part-time positions (Community Services,
Housing & Grants and Library). Reaching the value of one FTE (2,080 hours) requires
the elimination of multiple part-time staff.
• In actuality, 90.56 reduction in FTE's will result in the loss of 109 employees.
4 Internal Services Charges present 12.77% of the General Fund Operating Budget expenditures.
Page 6
Staff Report — Presentation of Three -Year Operating Plan
January 21, 2014
These reductions in M&O and Personnel will result in reductions in service levels. Service level
reductions include but are not limited to:
• Fire — closing of Fire Station 31 (one of only two National City fire stations)
• Police — elimination of Gang Enforcement, SWAT, Traffic and Community Services
Units; elimination of the drug prevention program and school police officers; reduction
in the number of neighborhood patrols; and a general reduction in police officers
• Neighborhood Services — elimination of the Graffiti Removal program
• Housing and Grants — elimination of the staff run Senior Nutrition Program (return the
program to the County to find other partners/grantees)
• Library — a 23% reduction in Library hours; elimination of the Literacy Program
• Community Services — closure of community centers and associated programs, closure of
Casa de Salud and the Manuel Portillo Youth Center teen program; closure of the El
Toyon Recreation Center and the Tiny Tots program.
As demonstrated through this exercise, based on forecasts using currently available data, the City
will not be able to maintain the current level of service provided to National City residents and
businesses, including fire and police protection services in the foreseeable future. Without
continuing current local funding, there is a possibility of having to outsource both police and fire
services. We strongly recommend that appropriate planning be undertaken to prevent any
possibility of closing our City -run Police and Fire Departments and contracting with another
jurisdiction to provide these services.
To address the City's fiscal challenges, the City commissioned a comprehensive community
survey of 400 residents to determine the public's service priorities and their willingness to
continue to pay for those priorities with no increase in current tax rates. An overwhelming 78%
of respondents believe that there is a need for continued funds to provide the current level of city
services such as neighborhood police patrols and police officers, gang and drug prevention
programs, 9-1-1 emergency medical response, fire protection and firefighters/paramedics, graffiti
removal, street and pothole repair, and senior and youth library services. In addition, the survey
found that 72% of respondents stated their support for the continuation of existing, voter
approved funding in 2014 and felt very strongly that without the extension National City would
be forced to eliminate police, firefighters and medical paramedics, further increasing emergency
response times. This response is well above the simple majority threshold necessary for passage
of a no -tax rate increase extension measure.
Alternative
The above stated analysis, as described, included reductions across all City departments,
including the Fire and Police Departments. As an alternative approach, a scenario was conducted
exempting said public safety departments from reductions. When internal service charges are not
factored in, Fire and Police account for 71% of the general fund operating budget. As such, the
impact of absorbing the loss of the district sales tax across the remaining City Departments is
5 Saturday closure (in addition to the current Friday closure) and reduced hours Sunday through Thursday.
Page 7
Staff Report — Presentation of Three -Year Operating Plan
January 21, 2014
quite significant. The estimated budget for the other City departments is $14,625,493. Removing
the estimated district sales tax reduces this number to $4,546,035, a reduction of 69%.
RECOMMENDATION
In the near term (the current fiscal year and Fiscal Years 2015 and 2016), City departments are
reticent to begin long range planning or initiate new programs and services, recognizing that
funding for current programs and services is tenuous beyond Fiscal Year 2016. And as
demonstrated through this exercise, based on forecasts using currently available data, the City
will not be able to maintain the current level of service provided to National City residents and
businesses, including fire and police protection services by Fiscal Year 2017.
The recent survey of National City residents indicates a strong desire for fiscal stability and the
maintenance of core services, with particular emphasis on city -run fire and police services, 9-1-1
emergency dispatchers, school and neighborhood patrols, repairing streets and potholes and
preventing cuts to senior and youth after -school programs.
In order to maintain service levels and achieve fiscal viability; and in order to allow departments
to begin long range planning, staff recommends that the City Council direct the development and
drafting of a proposed ballot measures to extend the previously voter approved one cent district
sales tax beyond its expiration date with no increase in tax rate to maintain the City's public
safety services, prevent cuts to police and fire services and ensure adequate funding for parks,
libraries and other City services. With thousands of people visiting National City every day, the
existing District Measure has ensured that out-of-towners continue to pay their fair share for
police, fire, street repair and other services they use when they visit our City, while not being
applied to food purchased as groceries or prescription medication.
FISCAL IMPACT
Maintenance of the status quo will result in the loss of district sales tax revenue to the City
estimated to be $8 million.
Attachments:
A. Summary of Proposed Reductions
B. Summary of Personnel Reductions
C. Departmental Three -Year Operating Plans
D. Report and Recommendation on Proposition D
Attachment A
CALIFORNIA
NATIONAL CT'Z/
VAV
INCORPORATED
Three Year Operating Plan
Proposed Reductions - In Dollars and Percentages
Department/Program
2017 estimated budget
M&O Reduction
% of Budget
Personnel Reduction
% of Budget
total % Reduction
Building
$474,949
$0.00
0.0%
$158,845
33.4%
33.4%
City Attorney
$712,230
$72,445.00
10.2%
$98,753
13.9%
24.0%
City Clerk
$268,783
$0.00
0.0%
$77,976
29.0%
29.0%
City Manager
$1,069,626
$7,250.00
0.7%
$249,476
23.3%
24.0%
Community Services
$440,198
$11,383.00
2.6%
$94,359
21.4%
24.0%
Engineering/Public Works
$1,308,378
$18,400.00
1.4%
$362,551
27.7%
29.1%
Finance
$1,518,682
$100,354.00
6.6%
$264,161
17.4%
24.0%
Fire
$7,664,303
$0.00
0.0%
$1,850,442
24.1%
24.1%
Housing & Grants
$923,461
$329,350.00
35.7%
$399,622
43.3%
78.9%
Human Resources
$414,368
$29,810.00
7.2%
$69,640
16.8%
24.0%
Library
$944,414
$40,870.00
4.3%
$185,750
19.7%
24.0%
MIS
$1,736,188
$416,685.00
24.0%
$0
0.0%
24.0%
Neighborhood Services
$952,142
$15,000.00
1.6%
$214,557
22.5%
24.1%
Non -Departmental
$742,809
$186,561.00
25.1%
$0
0.0%
25.1%
Planning
$413,477
$0.00
0.0%
$98,035
23.7%
23.7%
Police
$19,707,946
$79,895.00
0.4%
$4,625,000
23.5%
23.9%
Risk Management
$2,705,788
$51,001.00
1.9%
$598,418
22.1%
24.0%
Totals
$41,997,742
$1,359,004.00
3.2%
$9,347,585
22.3%
25.5%
Attachment B
CALIFORNIA
NATIONAL Cflr
C,iRPORATED
Three Year Operating Plan
FTE Counts
Department/Program
Projected FTE Count
Reduction
Revised Total
% Reduction
Building
4
2
2
50.00%
City Attorney
3.5
0.75
2.75
21.43%
City Clerk
2
1
1
50.00%
City Manager
7.8
1
6.8
12.82%
Community Services
13.81
4.91
8.9
35.55%
Engineering/Public Works
37.65
6.25
31.4
16.60%
Finance
14.48
4.5
9.98
31.08%
Fire
43
14
29
32.56%
Housing & Grants
10.5
6.75
3.75
64.29%
Human Resources
3
1
2
33.33%
Library
15.85
5.4
10.45
34.07%
MIS
3
0
3
0.00%
Neighborhood Services
9.05
4
5.05
44.20%
Planning
3
1
2
33.33%
Police
123.82
37
86.82
29.88%
Risk Management
1
1
0
100.00%
Totals
295.46
90.56
204.9
30.65%
Attachment C
CALIFORNIA
NAT'I O NAL CITY
C` IL11.3 INC�pgpOC A't'ED
Departmental
THREE YEAR OPERATING PLAN
Department Name: Building
Department Description: The Building Division protects the public's health and safety by
reviewing each building project for conformance with the requirements of adopted codes and by
providing applicants with comprehensive direction on needed plan modifications. The Division
also performs periodic inspections of all building projects to confirm construction is in
accordance with approved plans and applicable codes and standards.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$497,500
$497,500
$497,500
$497,500
Expenditures
Personnel
$337,708
$347,582
$357,959
$368,649
M&O
$106,300
$106,300
$106,300
$106,300
Total
Expenditures
$444,008
$453,882
$464,582
$474,949
*include all projected changes in expenditures, revenues and staffing (i.e. salary adjustments,
staffing increases or reductions)
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$497,500
$497,500
$295,670
$295,670
Expenditures
Personnel
$337,708
$347,582
$357,959
$209,804
M&O
$106,300
$106,300
$106,300
$106,300
Total
Expenditures
$444,008
$453,882
$464,582
$316,104
Attachment C
Program/Service
Description: Review building projects for conformance with the requirements of adopted codes
and by providing applicants with comprehensive direction on needed plan modifications.
Perform periodic inspections of all building projects to confirm construction is in accordance
with approved plans and applicable codes and standards.
Proposed Changes
Layoff two employees. This scenario is a permanent reduction of 1/2 of the total Building staff.
Program Impacts
• 24% cut will result in the layoff of two employees because 64% of the Building budget is
personnel costs.
o Layoff of (1) Senior Building Inspector and (1) Permit Technician: $158,845 in
FY17
• Increased response times for processing building permits
• Increased response times for processing plans
• Increased dependence on Esgil (contractor) to process building permits/plans
• Potential for non -compliant building structures being built due to lack of ability to
conduct enforcement
• Lost efficiency in processing business licenses that require Building approval
• Large slow down due to staffing reductions
o Building Permits
o Enforcement Fines & Penalties
o Plan Checking Fee
Summary
Total projected Savings: $158,845
Personnel Reductions- Dollar and % Savings: $158,845 (33%) in FY17
FTE Reductions:
Position Title FTE* Count
Senior Building Inspector 1.0
Permit Technician 1.0
Total 2.0
Major community impacts: Tax revenue generated from new development projects will be
delayed due to staff shortages, which will result in less tax revenue income for the City.
Attachment C
CALIFORNIA
N'LO J y
IYCOAPOR �7'
Departmental
THREE YEAR OPERATING PLAN
Department Name: City Attorney
Department Description: Legal
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
n/a
n/a
n/a
n/a
Expenditures
Personnel
$538,519
$548,751
$559,359
$570,180
M&O
$142,050
$142,050
$142,050
$142,050
Total
Expenditures
$680,569
$690,801
$701,409
$712,230
*include all projected changes in expenditures, revenues and staffing (i.e. salary adjustments,
staffing increases or reductions)
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues n/a n/a n/a n/a
Expenditures
Personnel
$ 538,519
$ 548,751
$ 559,359
$ 471,427
M&O
$ 142,050
$ 142,050
$ 142,050
$ 69,605
Total
Expenditures
$ 680,569
$ 690,801
$ 701,409
$ 541,032
Program/Service
The City Attorney is the chief legal officer of the city under the direction and control of the
City Council; and also acts as legal counsel for the Parking Authority, Successor Agency,
and Joint Powers Financing District. Among other things, the city attorney prepares or
Attachment C
Three Year Operating Budget
City Attorney Department
Page 2
revises ordinances, is responsible for all litigation; makes recommendations for ordinances,
resolutions or other documents or procedures affecting the legal position of the city;
provides legal opinions; attends all meetings of the City Council, and other boards and
commissions as necessary; reviews all contracts and instruments to which the city is a
party; enforces city laws and regulations; and reviews and analyzes all state and federal
legislation affecting the city.
Obj ective:
Continue to provide legal advice with the imposition of a 24% budget reduction amounting
to $170,935 ($712,230 - $170,935= $541,295).
Proposed Changes (describe changes including the effective date and any plans to phase in
change or wind down a program if applicable)
Effective 7/1/2016:
1) eliminate senior assistant city attorney position for annual savings of $64,061.
2) reduce deputy city attorney to 3/4 time position for an annual savings of $34,692.
3) reduce M&O by 51% for an annual savings of $72,445.
Program Impacts (impacts include but are not limited to all of the following):
Personnel Reductions
We would eliminate one current position and reduce another position by 25%. Whether we
could retain an attorney in the 3/4 time position is questionable, thus exacerbating the potential
impact to personnel reductions should that position be vacated. A reduction to staffing as
outlined, would most immediately impact legal support provided to City departments.
Service Delivery
Undoubtedly, the reduction in staffing would impair the department's ability to meet the
legal needs of the City. There would be a direct impact to the timeliness of agenda items.
Specifically, all items on the agenda would either require more time for legal review
resulting in items delayed or would forego review resulting in potential legal vulnerability.
A reduction in the legal review of matters exposes the City to greater litigation. For example,
currently, legal staff reviews agenda items for compliance with our policies and law.
Contracts are reviewed for compliance with our bidding requirements, and protests are
reviewed as part of the process. Quasi-judicial matters are reviewed for sufficiency of
evidence in the record before the decision maker, as well as for procedure. Quasi-judicial
matters involve the legislative body to make a decision based on the body of evidence before
them. Insufficient staffing directly affects the ability to review such matters ahead and
provide helpful legal advice. The City Attorney frames all ordinances and reviews them for
legality. Agenda items are reviewed for compliance with the Brown Act. If there is
insufficient staff to review such matters, they may be placed on the agenda with legal
infirmity, leaving the City more susceptible to legal challenge. The types of challenges
Attachment C
Three Year Operating Budget
City Attorney Department
Page 3
described above are generally not covered by the City's insurance carrier. While not every
challenge can be prevented, the risk is certainly minimized by having legal review.
Legal Mandate
As described above, delivery of legal services would be severely impacted. All cities have
either in-house or contract city attorneys. The Government Code requires the city attorney to
advise the elected body in all legal matters related to city business. (Government Code
section 41801). A need for legal services will continue to be needed. The ability to serve
those needs in a timely manner, however, would be severely impacted by a 24% budget
reduction.
Strategic Element
The Strategic Plan sets forth five objectives. Legal support will be needed in reaching these
objectives.
M&O Reductions
The 51% reduction to M&O would reduce our ability to contract with specialists in certain
areas of law. In addition, necessary training would be greatly reduced. Overall, we would
operate on a very reduced budget that would increase the amount of time it would take to
review legal matters, especially in specialized areas of law.
Summary
Total projected Savings: $170,935
Personnel Reductions- Dollar and % Savings: $98,753 14% savings
FTE Reductions: .75
Position Title FTE* Count
Senior Assistant 0.5
Deputy 0.25
Total 0.75
M & 0 Reductions- Dollar and % Savings: $72,445 10% savings
Account Savings
Governmental Purposes $ 1,000
Professional Services $ 46,945
Membership & Subscriptions $ 2,500
Training $ 8,000
Contract Services $ 12,500
Materials & Supplies $ 1,500
Total $ 72,445
Attachment C
Three Year Operating Budget
City Attorney Department
Page 4
Major community impacts:
The primary impacts to the community would be it would take longer for matters of community
interest to be brought to fruition because legal review would take longer. In addition, matters
such as amortization would be affected as there would not be sufficient budget to have the
required legal staffing to move amortization forward. Importantly, reduced legal staffing
resulting in reduced legal review could result in greater exposure to litigation. An increase in
litigation requires an increase to the liability budget, requiring additional monies from the
general fund.
Attachment C
1 ✓
CALIFORNIA
NATIONAL C
Taal
,. W'oRPQRA'18ti
Departmental
THREE YEAR OPERATING PLAN
Department Name: City Clerk / Records Manager
Department Description: The City Clerk / Records Manager, as the Custodian of City
Records, maintains, manages and stores vital City records and documents including
Ordinances, Resolutions, Contracts, Deeds and Bonds; prepares City Council Minutes;
oversees the Records Retention and Document imaging Programs; responds to
information and Public Records requests; administers City Elections; is the Filing Officer
for Campaign Disclosure and Economic Interest Statements; prepares, publishes, posts
and mails legal notices; holds the City Seal; certifies and attests City documents;
administers all Oaths; maintains the Municipal Code; receives and opens bids;
processes all incoming mail; administers interpretation / translation services and
manages the Boards & Commissions application and appointment process.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$600
$600
$600
$600
Expenditures
Personnel
$206,811
$212,000
$217,476
$223,083
M&O
$45,700
$45,700
$45,700
$45,700
Total
Expenditures
$252,511
$257,700
$263,176
$268,783
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$600
$600
$600
$600
Expenditures
Personnel
$206,811
$212,000
$217,476
$145,107
M&O
$45,700
$45,700
$45,700
$40,700
Total
Expenditures
$252,511
$257,700
$263,176
$185,807
Program/Service #1: Responding to and carrying out mandated statutory duties and
responsibilities that serve the public, staff and City.
Attachment C
Description: Most of the activities carried out by the City Clerk/Records Manager are mandated
by Statute and Ordinance. A listing of those responsibilities, duties and activities are as follows:
Acts as Custodian of City Records (Ordinances, Resolutions, Contracts, Deeds, Bonds)
Prepares Minutes
Records documents
Prepares, Mails, Posts and Advertises Public Notices
Maintains, Certifies, Publishes and Codifies Ordinances into the Municipal Code
Responds to information and Public Records Act Requests
Conducts historical research for staff, other agencies and the public
Oversees Records Retention Program
Receives and logs all claims
Acts as City's liaison with other agencies
Scans documents into Records Management System for access & retrieval by public and staff
Certifies and attests City Documents (1200+ per year)
Administers Oaths
Mails all executed contracts to venders
Conducts Elections
Serves as Filing Officer for Campaign, Economic Disclosure and other FPPC filings
Receives and Opens bids
Processes incoming mail / administers out -going mail
Proposed Changes: Reduce staffing in the City Clerk's office by one position. That is the only
way to achieve the targeted reduction.
Program Impacts: The loss of one position would be a 50% reduction in staffing taking it to
the lowest level in over 40 years. The service delivery obligations of the City Clerk/Records
Manager all have Statutory and functional deadlines. Those deadlines could not be met with a
50% reduction in staffing. Failure to meet those deadlines would have serious consequences
both financially and operationally.
The administration of the Board & Commission application and appointment process would no
longer be possible by the City Clerk's Office and would need to be re-evaluated or re -assigned to
another department.
Summary
Total projected Savings: $82,975
Personnel Reductions- $77,976 (29%)
FTE Reductions: 1.0
Position Title FTE Count
Administrative Secretary 1.0
Total 1.0
Major community impacts:
A Reduction in personnel would cripple the ability of the City Clerk's Office to carry out its
responsibilities under the law to the detriment of the public and community. The resulting
consequences could be very costly both legally, administratively and functionally.
Attachment C
CALIFORNIA
N 10NAL atint
INCORPUnnatS{
Departmental
THREE YEAR OPERATING PLAN
Department Name: City Manager
Department Description: The City Manager provides the overall administration, leadership,
and direction for the City organization. The City Manager's office identifies for the City Council
community issues and needs requiring legislative policy decisions, assures that programs and
services are effectively and efficiently provided, and fosters public awareness of municipal
programs, services and goals.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$982,217
$1,003,993
$1,026,875
$1,050,306
M&O
$19,320
$19,320
$19,320
$19,320
Total
Expenditures
$1,001,537
$1,023,313
$1,046,195
$1,069,626
Revised General Fund Budget:
2014
Adopted
201.5
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$982,217
$1,003,993
S1,026,875
$800,830
M&O
$19,320
$19,320
$19,320
$12,070
Total
Expenditures
$1,001,537
$1,023,313
$1,046,195
$812,900
Proposed Changes
Eliminating one and one half positions with across the board cuts to Maintenance & Operations
budgets.
Attachment C
Program Impacts
The elimination of the Community Development Executive Director position will be appropriate
since the wind down of the redevelopment agency should be complete by 2016. We don't expect
to budget that position in the future.
Reduction of one Senior Office Assistant position to a halftime position will impact the
department and put greater demands on administrative staff throughout the City..
Cutting the majority of the M&O budget would greatly reduce the levels of support the City
Manager's office can contribute to overall city efforts and would limit the professional
development opportunities for the department.
A partial reduction of memberships & subscriptions is due to the need to be included with ICMA
for additional resources and support.
Summary
Total projected Savings: $ 256,726 (24%)
Personnel Reductions: $249,476 (23.3%)
FTE Reductions: 1.5
Position Title FTE* Count
Senior Office Assistant 0.5
Comm. Development Exec. Director 1.0
Total 1.5
M & 0 Reductions- Dollar and % Savings: $7,250 (0.7%)
Account Savings
212: Governmental Purposes $250
213: Professional Services $2,250
222: Memberships & Subscriptions $1,000
226: Training, Travel, Subsistence $2,750
264: Promotional Activities $1,000
Total $7,250
Attachment C
CALIFORNIA *
NA1'1�Ctry
INCORPORATE') ..J
Departmental
THREE YEAR OPERATING PLAN
Department Name: Community Services
Department Description: The Community Services provides high quality facilities, services
and cost effective programs which enhance the quality of life and encourage healthy living for
community residents. Our mission is to provide excellent customer service and planning for the
City's open space and facilities and celebrate the community's diversity through social, cultural,
and civic activities for youth, adults, and senior citizens. The Community Services Department
consists of Recreation, Senior Services, Neighborhood Councils, and Cultural Arts.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$97,000
$97,000
$97,000
$97,000
Expenditures
Personnel
$445,577
$385,592
$389,138
$392,767
M & 0 (minus
capital outlay)
$47,431
$47,431
$47,431
$47,431
Total
Expenditures
(minus capital
outlay)
$493,008
$443,023
$436,569
$440,198
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$77,000
$77,000
$77,000
$77,000
Expenditures
Personnel
$445,577
$385,592
$389,138
$298,408
M & 0 (minus
capital outlay)
$47,431
$47,431
$47,431
$36,047
Total
Expenditures
(minus capital
outlay)
$493,008
$443,023
$436,569
$334,550
Attachment C
1. Program/Service
Description: Casa de Salud and Manuel Portillo Youth Center teen program.
Objective: The Supreme Teens Program provides a variety of positive youth development
programs and recreational activities that stimulate and generate interest in healthy leisure
pursuits, and provide a safe, well supervised, interactive environment free of gang activity with
positive adult role models. It includes a physical fitness aspect- teens will participate in a
variety of sports such as tennis, basketball, racquetball, swimming, hiking, bowling, fishing and
other healthy activities. The program offers new experiences for teenagers and stimulates their
interest in wholesome cultural activities such as attending plays, art exhibits, and athletic
competitions. Teens also receive mentoring assistance by learning new computer software,
receiving assistance with homework, as well as a variety of other development programs and
recreational activities. The Supreme Teens program can help to develop an interest in hobbies
such as ceramics, model cars, water coloring, drawing, and arts and crafts. The program
promotes community volunteerism by encouraging teens to be more involved in City
government and various other civic duties.
Proposed Changes: Close Casa de Salud Recreation Center and discontinue associated
programs including the teen program. If possible, expand on partnership with the YMCA to
include teens. Eliminate part time staffing positions related to the program as well as
maintenance and operating costs associated with operating the building.
Program Impacts
• This would impact four part time personnel as well as admin support.
• This would be in line with strategic plan element 2e. Build cooperative partnerships with
community organizations, schools, and other public agencies in the efficient and cost
effective delivery of services. If possible, expand on partnership with the YMCA to
include teens.
• Estimated Savings- The estimated City savings would be $35,286.
2. Program/Service
Description: El Toyon Recreation Center and Tiny Tots program
Objective: The main goal of the Tiny Tot program is to enhance the toddlers overall social,
physical and intellectual development in a classroom setting in preparation for kindergarten and
elementary school. The children learn their alphabet, numbers, songs, manners/etiquette,
playacting, months of the year, arts/crafts and other essential skills to prepare them for the first
year of school.
Proposed Changes: Close El Toyon recreation center and discontinue associated programs
including the tiny tots program. Partner with the Boys and Girls Club to provide the Tiny Tots
program. Eliminate part time staffing positions related to the programs as well as maintenance
and operating costs associated with operating the building.
Program Impacts
• Personnel- This would impact four part time personnel as well as admin support.
Attachment C
• Eliminate part time staffing positions related to the program as well as maintenance and
operating costs associated with operating the building.
• If possible, expand on partnership with the Boys and Girls Club to manage the Tiny Tots
program. This would be in line with strategic plan element 2e: Build cooperative
partnerships with community organizations, schools, and other public agencies in the
efficient and cost effective delivery of services.
• Estimated Savings-$39,916.
3. Program/Service
Description: Neighborhood Council Maintenance and Operating budget
Objective: NHC M & 0 budget funds the Neighborhood Council breakfasts, special events such
as Tower of Terror support, Christmas at Brick Row event, Movies in the Park series, and more.
Proposed Changes: Reduce Neighborhood Council Maintenance and Operating budget thereby
eliminating two of the four movies in the park events and two of the four Neighborhood Council
(NHC) breakfasts. In addition, eliminating the budget associated with the Tower of Terror
costume contest.
Program Impacts
• This would reduce part time personnel hours used for special events. It would also
reduce administrative costs associated with putting these events on. Ultimately, it would
reduce the City sponsored special events.
• This would not be in line with strategic plan element 3c: Help organize community events
and support social gatherings that benefit the total community.
• If possible, expand on partnership with ARTS to cover the Tower of Terror costume
contest. This would be in line with strategic plan element 2e: Build cooperative
partnerships with community organizations, schools, and other public agencies in the
efficient and cost effective delivery of services.
• Estimated Savings- The estimated City savings would be $3,883 in M & O.
• Estimated Personnel and Admin savings- $17,512
4. Program/Service
Description: Community and Police Relations Commission Maintenance and Operating budget
Objective: The Community and Police Relations Commission Maintenance and Operating
budget funds are primarily for the membership to National Association for Civilian Oversight of
Law Enforcement (NACOLE) and the costs to attend the annual conference.
Proposed Changes: Eliminate Community and Police Relations Commission Maintenance and
Operating budget.
Program Impacts
• This would not impact personnel.
Attachment C
• NACOLE serves as a resource and tool to both the Commission and City Staff, including
the City Attorney's Office. The impact would be less knowledgeable/untrained CPRC
commissioners and staff.
o The annual NACOLE training conference increases the knowledge and skills of
staff members and volunteers who work in oversight.
o NACOLE membership provides technical assistance and advice to jurisdictions
with oversight bodies.
o NACOLE membership identifies best practices as they emerge from the
experiences of members.
• Estimated Savings- The estimated City savings would be $7,500.
5. Program/Service
Description: Kimball Senior Center outside organization usage
Objective: Kimball Senior center is used by outside organizations for room rentals which affects
Community Services and Public Works staff hours.
Proposed Changes: Eliminate outside organizations using the Kimball Senior Center facility on
the weekends thereby saving the City personnel funds to staff the building and extra maintenance
costs. Currently there are two non -City groups, Spearhead and Operation Samahan, that meet on
the weekends at a cost of 156 staff hours annually. These are City Council approved groups that
pay rental fees.
Program Impacts
• This would reduce the hours of one part-time position as well as additional public works
hours spent cleaning and setting up/tearing down the facility.
• Estimated Savings- The estimated City savings would be personnel costs of $1,644.
Summary
Total projected Savings: $105,742
Personnel Reductions- Dollar and % Savings: $94,359 (21.4%)
FTE Reductions:
Position Title FTE Count
Recreation Aide 3.21
Recreation Specialist 1.44
Recreation Leader 0.26
Total 4.91
Attachment C
M & 0 Reductions- Dollar and % Savings: $11,383 (2.6%)
Account Savings
NHC $3,883
CPRC $7,500
Total $11,383
Major community impacts:
• Closure of two recreation centers
• Elimination of Tiny Tots program
• Elimination of Teen program
• Reduction of City sponsored special events
• Elimination of NHC breakfasts
• Possible liability increase with no CPRC M & 0
• Elimination of outside organization usage of the senior center on weekends
Attachment C
CALIFORNIA
NATIOONAL J y
IYCOAPOR �7'
Departmental
THREE YEAR OPERATING PLAN
Department Name: Engineering & Public Works
Department Description: Responsible for delivery of capital improvement projects,
maintenance of public facilities, environmental compliance, plan reviews and permitting.
General Budget:
2014
Adopted
2015
Estimated
2016
Estimated
2017
Estimated
Revenues*
$3,454,079
$3,454,079
$3,454,079
$3,454,079
Expenditures
Personnel
$796,759
$773,970
$797,385
$821,478
M&O
$486,900
$486,900
$486,900
$486,900
Total
Expenditures
$1,283,659
$1,260,870
$1,284,285
$1,308,378
* Revenues shown reflect General Fund revenues only.
Revised General Fund Budget:
2014
Actual
2015
Estimated
2016
Estimated
2017
Estimated
Revenues*
$3,454,079
$3,498,994
$3,567,824
$2,688,686
Expenditures
Personnel
796,759
703,297
725,350
458,927
M&O
486,900
479,900
479,900
468,500
Total
Expenditures
$1,283,659
$1,183,197
$1,205,250
$927,427
* Revenues shown reflect General Fund revenues only
Attachment C
Program/Service: Engineering
Description: Responsible for delivery of capital improvement projects, environmental
compliance, plan reviews and permitting.
Proposed Changes: Change in personnel to occur at the start of FY 2015, with full reduction by
the start of FY 2017. Reduction in M&O to occur at the start of FY 2015 and remain fixed
through FY 2017.
• Personnel:
o July 1, 2014 — Freeze Project Officer position, which was vacated due to
employee retirement in FY 2014.
o July 1, 2016 — Freeze Assistant Director of Public Works / Engineering,
Management Analyst II and Civil Engineering Technician positions.
• Maintenance and Operations: $7,000 from various accounts
Program Impacts:
• Service Delivery: Reduction in personnel will impact scope of capital improvement
program, ability to apply for and management capital grants, and review time for plan
checks and issuing permits.
o Capital Improvement Program (CIP): Engineering currently manages a $50
million 5-Year CIP for the City. The Assistant Director of Public Works /
Engineering and Management Analyst II are essential personnel for managing a
CIP of this size. Without these positions, the CIP would need to be reduced by
approximately 50% as staff will not have the capacity to aggressively apply for
competitive grants (which include extensive reporting and delivery requirements)
and effectively provide project accounting and management services. Programs /
projects such as Safe Routes to School will be minimized.
o Plan checks and permits: Elimination of the Assistant Director of Public Works /
Engineering and Civil Engineering Technician will impact review times for plan
checks and issuance of permits for grading and work within the public right of
way. Review times are estimated to increase from 30 days or less to 45 days or
less.
o Customer Service: Elimination of a Civil Engineering Technician will impact
customer service, which will result in longer wait times at the service counter and
response times to requests for information. Staff estimates a 25% reduction in
customer service.
• Legal Mandates: The City is legally required to maintain environmental compliance.
Elimination of the Assistant Director of Public Works / Engineering will impact staff s
ability to maintain environmental compliance in stormwater, wastewater and HAZMAT.
Attachment C
Engineering will need to increase Contract Services for environmental support to assist
staff with program management, reporting and inspections.
• Estimated Savings: Reduction in personnel and M&O will result in an estimated savings
of approximately $305,600 (-27%) in General Fund.
Summary:
Total Projected Savings:
• Personnel Reductions (Dollar and % Savings):—$298,600 and —43%
• FTE Reductions:
Position Title FTE (General Fund)
Assistant Director of Public Works / Engineering 0.50
Project Officer 0.85
Civil Engineering Technician 0.90
Total 2.25
• M & 0 Reductions (Dollar and % Savings):—$7,000 and —2%
Account Savings
Professional Services $20,000
Contract Services $(13,000)*
Total $7,000
* Represents increase in Contract Services for environmental support to assist staff with program
management, reporting and inspections to maintain environmental compliance (legal mandate).
Major community impacts:
• Estimated 50% reduction in CIP will impact the value and amount of public improvement
projects for the community (i.e. Safe Routes to School, pedestrian and bicycle
enhancements, traffic calming, etc.)
• Estimated increase in review time for plan checks and issuing permits from 30 days or
less to 45 days or less.
• Estimated 25% reduction in customer service, which will result in longer wait times at
the service counter and response times to requests for information.
Attachment C
Program/Service: Public Works Operations
Description: Management and administrative support services for Public Works
Proposed Changes: Reduction in M&O to occur at the start of FY 2017.
• Maintenance and Operations: $11,400 from various accounts
Program Impacts:
• Estimated Savings: Reduction in M&O will result in an estimated savings of
approximately $11,400 (-7%) in General Fund.
Summary:
Total Projected Savings:
• Personnel Reductions (Dollar and % Savings): None
• FTE Reductions: None
• M & 0 Reductions (Dollar and % Savings): —$11,400 and —16%
Account Savings
Training $4,000
Contract Services $7,400
Total $11,400
Major community impacts: None
Program/Service: Facilities Maintenance
Description: Responsible for maintenance of City -owned buildings, including electrical,
plumbing, HVAC and minor repairs.
Proposed Changes: Reduction in personnel and M&O to occur at the start of FY 2017.
• Personnel:
o July 1, 2016 — Freeze Building Trades Specialist position.
• Maintenance and Operations: $332,500 from various accounts
Attachment C
Program Impacts:
• Service Delivery:
o Elimination of Building Trades Specialist will impact response times to requests
for service and repairs. Staff estimates a 35% reduction in response times.
o Partnership with YMCA to carry out maintenance of Las Palmas Pool and
Camacho Gym is estimated to reduce M&O by approximately 19%.
• Estimated Savings: Reduction in personnel and M&O will result in a reduction of
approximately $338,500 (-17%) in General Fund revenues.
Summary:
Total Projected Savings:
• Personnel Reductions (Dollar and % Savings): —$6,000 and —1%
• FTE Reductions:
Position Title FTE (General Fund)
Building Trades Specialist 1.00
Total 1.00
• M & 0 Reductions (Dollar and % Savings): —$332,500 and —19%
Account Savings
Electricity & Gas $149,000
Water $66,700
R&M Buildings & Structures $80,000
Chemical Products $36,800
Total $332,500
Major community impacts:
• Estimated 35% reduction in response times to requests for service and repairs for City -
owned buildings, including public library and MLK Jr. Community Center.
• Estimated 19% reduction in M&O due to partnership with YMCA to carry out
maintenance of Las Palmas Pool and Camacho Gym.
Attachment C
Program/Service: Equipment Maintenance
Description: Responsible for maintenance of City fleet, which includes vehicles and heavy
equipment.
Proposed Changes: Reduction in M&O to occur at the start of FY 2017.
• Maintenance and Operations: $316,000 from various accounts
Program Impacts:
• Service Delivery:
o Proposed contract with fleet management company for modernization and
maintenance of light and medium duty fleet is estimated to reduce M&O by
approximately 25%.
o Proposed reduction in Police Dept. fleet is estimated to reduce M&O by
approximately 13%.
• Estimated Savings: Reduction in M&O will result in a reduction of approximately
$279,100 (-28%) in General Fund revenues.
Summary:
Total Projected Savings:
• Personnel Reductions (Dollar and % Savings): None
• FTE Reductions: None
• M & 0 Reductions (Dollar and % Savings): —$316,000 and —38%
Account Savings
R&M Automotive Equipment $70,000
Gas, Oil & Lubricants $180,000
Automotive Parts $52,000
Tires $14,000
Total $316,000
Major community impacts:
• Estimated 25% reduction in M&O due to proposed contract with fleet management
company for modernization and maintenance of light and medium duty fleet.
Attachment C
Program/Service: Parks
Description: Responsible for maintenance of City parks, landscaped medians and trees within
the public right of way.
Proposed Changes: Reduction in personnel and M&O to occur at the start of FY 2017.
• Personnel:
o July 1, 2016 — Freeze Park Superintendent, one Park Caretaker and both Seasonal
Park Aide positions.
• Maintenance and Operations: $4,350 from various accounts
Program Impacts:
• Service Delivery:
o Responsibilities of the Park Superintendent will be carried out by the Director of
Public Works / City Engineer, with the assistance of the Park Superintendent.
o Elimination of Park Superintendent, one Park Caretaker and both Seasonal Park
Aide positions will result in reduction in service levels. Staff estimates a 20%
reduction in service levels, which will primarily impact requests for tree trimming
and maintenance of landscaped medians.
• Estimated Savings: Reduction in personnel and M&O will result in a reduction of
approximately $127,300 (-32%) in General Fund revenues.
Summary:
Total Projected Savings:
• Personnel Reductions (Dollar and % Savings): —$123,000 and —14%
• FTE Reductions:
Position Title FTE (General Fund)
Park Superintendent 1.00
Park Caretaker 1.00
Seasonal Park Aide 0.50
Seasonal Park Aide 0.50
Total 3.00
• M & 0 Reductions (Dollar and % Savings): —$4,400 and —4%
Attachment C
Account Savings
Laundry & Cleaning $500
Wearing Apparel $470
Small Tools $380
Materials & Supplies $2,500
Mobile Tools $500
Total $4,350
Major community impacts:
• Estimated 20% reduction in service levels, which will primarily impact requests for tree
trimming and maintenance of landscaped medians.
Attachment C
CALIFORNIA
ATIONAL J y
atfut
IYCOAPOR �7'
Departmental
THREE YEAR OPERATING PLAN
Department Name: Finance
Department Description: The Finance Department is responsible for City-wide financial
management activities including accounting and financial reporting, accounts payable, accounts
receivable, investments, payroll and procurement.
General Budget:
2014
Adopted
2015
Estimated'
2016
Estimated'
2017
Estimated'
Revenues2
$727,150
$758,700
$790,200
$821,700
Expenditures
Personnel
1,131,549
1,152,273
1,174,825
1,197,835
MandO
320,847
320,847
320,847
320,847
Total
Expenditures
$1,452,396
$1,473,120
$1,495,672
$1,518,682
1. includes projected changes in expenditures, revenues, and staffing
2. includes business licenses, investment earnings, garage sale permits, and administrative fees (dog licenses)
Revised General Fund Budget:
2014
Adopted'
2015
Estimated'
2016
Estimated'
2017
Estimated'
Revenues2
$727,150
$758,700
$790,200
$821,700
Expenditures
Personnel
1,131,549
1,152,273
1,174, 825
933,674
MandO
320,847
314,847
316,772
220,493
Total
Expenditures
$1,452,396
$1,467,120
$1,491,597
$1,154,167
' includes adjustment for reduced audit expenses
2 includes business licenses, investment earnings, garage sale permits, and administrative fees (dog licenses)
Attachment C
Accounting and Financial Reporting, Accounts Payable, Accounts Receivable, Payroll,
Purchasing
Description:
Accounting and financial reporting includes bookkeeping, reporting, and audit and financial
statement preparation. Accounts Payable is responsible for payment of the City's financial
obligations (except for employee salaries and related expenses) and vendor file maintenance.
Accounts Receivable collects, deposits, and posts all revenues received by the City and issues
business licenses and (some) permits. Payroll is responsible for administration of employee
compensation, employment taxes, and other deductions. Purchasing coordinates the City's
acquisition processes, storage and delivery of supplies, and disposal of surplus property.
Proposed Changes
Eliminate three (3) Accounting Assistant positions, one (1) Accountant, and the Stock Clerk /
Storekeeper position. This staff reduction would occur October 1, 2016, (is that what your table
reflects? The decision was for all departments to make all reductions effective July 1) coinciding
with effective date of the elimination of the District Sales Tax, unless required earlier by City
Council or the City Manager.
A reduction of $100,354 in Maintenance and Operations accounts.
Appropriations associated with revenue -generating programs would not be reduced or
eliminated.
These expense cuts would be effective July 1, 2016.
Program Impacts
Although all departmental services and functions are expected to continue, the proposed staff
reductions would result in considerably diminished service and production levels, including:
• significantly increased wait and processing times for business licenses, garage sale
permits, and dog licenses;
• delayed payments to vendors (and possible resulting late fees); and
• an extended audit and financial statement preparation timetable, as well as later account
reconciliations, journal entries, and other adjustments.
In addition, the lack of available support and backup staff is likely to also result in overtime work
or compensatory time accrual, at times of heavy workloads and when important deadlines
approach. (Overtime and compensatory time would need to be factored into future budgets, with
funding probably coming from deeper cuts to Rentals and Leases.) Further, without a Stock
Clerk / Storekeeper, departments may need to coordinate pickup of materials stored or delivered
to the warehouse / storage facility. Finally, many non -essential functions likely would be
suspended or discontinued altogether, in favor of those considered critical.(like what?)
Attachment C
Impacts of Maintenance and Operations cuts proposed:
• important training and educational opportunities likely would be missed (due to the
reduction of the Training, Travel, and Subsistence budget), hampering the department's
ability to stay current on legal updates and generally accepted governmental accounting
practices, thus increasing the City's exposure;
• staff would be required to estimate revenues internally (resulting from elimination of
property tax consultation services [Professional Services]); and
• the ability to produce documents quickly would be diminished (with fewer copiers and
printers [Rentals and Leases]).
Summary
Total projected Savings: $364,515
Personnel Reductions- Dollar and % Savings: $264,161 (22.1%)
FTE Reductions: 4.5 FTE
Position Title FTE Count
Accounting Assistant 3.0
Accountant 1.0
Stock Clerk / Storekeeper 0.5
Total 4.5
M and 0 Reductions- Dollar and % Savings: $100,354 (31.3%)
Account Savings
Furniture and Furnishings $45,000
Professional Services 19,600
Rentals and Leases 16,800
Training, Travel, and Subsistence 14,900
Auditing Services 2,054
Printing and Binding 1,000
Duplicating Supplies 1,000
Total $100,354
Major community impacts:
Significantly reduced service levels, including longer wait times, extended processing times, and
delayed payments to vendors.
Attachment C
CALIFORNIA
NAT'I O NAL CITY
C`OJ'OflA`�
INC�pgpOC A't'ED
Departmental
THREE YEAR OPERATING PLAN
Department Name: Fire
Department Description: The National City Fire Department prevents destructive fires from
starting through public education and code enforcement activities. For those fires that do occur,
the National City Fire Department provides early confinement and extinguishment while
minimizing the risk of further property damage, injury, and death. In addition, the National City
Fire Department provides immediate rescue and medical aid to citizens who become victims of
sudden illness and/or accidents.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$1,334,001
$1,366,607
$1,399,953
$1,434,112
Expenditures
Personnel
$6,080,934
$6,592,355
$6,836,837
$7,091,565
M&O
$572,738
$572,738
$572,738
$572,738
Total
Expenditures
$6,653,672
$7,165,093
$7,409,575
$7,664,303
*includes all projected changes in expenditures, revenues and staffing (i.e. salary adjustments,
staffing increases or reductions)
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$1,334,001
$1,366,607
$1,399,953
$1,434,112
Expenditures
Personnel
$6,080,934
$6,592,355
$6,836,837
$5,241,123
M&O
$572,738
$572,738
$572,738
$572,738
Total
Expenditures
$6,653,672
$7,165,093
$7,409,57.5
$5,813,861
Attachment C
Program/Service
Description: Fire Operations - Operations personnel are staffed twenty-four hours a day, 7-
days a week and are the first responders on all emergencies occurring in the City; responds to
other cities and counties per comprehensive mutual aid agreements; implements a rigorous
training curriculum that includes mandated Federal and State certifications, county -wide in-
service training, and department specific training which includes stringent testing and
promotional certifications; conducts station tours for schools and public service groups;
participates in public events; and maintains fire station facilities and apparatus.
Fire Administration - under the guidance of the Director of Emergency Services, oversees the
operation of the Fire Department: submits and administers the annual operating budget; oversees
all aspects of personnel management including hiring, promotions, on the job injuries, mandated
training, and payroll; completes all Department purchases; responds to inquiries from the public;
maintains a liaison with City government (City Manager, Mayor, City Council) and other City
departments; plans and coordinates public events; attends public functions; establishes and
implements the annual Strategic Plan; and sets goals and determines the future needs of the
Department.
Fire Prevention - under the supervision of the Fire Marshal, is responsible for identifying and
mitigating possible safety hazards and concerns through an aggressive business inspection
program; provides plan check services for fire department related aspects of all construction,
remodels and tenant improvements in the City; coordinates with other City departments to assist
citizens and contractors in complying with City codes; provides a comprehensive public
education program to all age groups from pre-school children to senior citizens; administers a
Juvenile Fire Setter program to respond to the needs of children and adolescents at risk of
causing fire damage and injuries; and responds to complaints regarding code enforcement issues.
Proposed Changes
• Layoff Personnel — a 24% budget reduction can only be achieved by layoffs of
Administrative and Firefighter personnel, thereby closing one fire company. This
scenario is a permanent reduction of 1/3 of the total fire resources of the City.
o Layoff of (3) Captains, (3) Engineers, (6) Firefighters: $1.76 million
o Layoff of (2) Fire Inspectors: $188k
Program Impacts
• Close Fire Station #31
• 24% (or approximately $1.9 million) cut will result in closing Station 31 because 82% of
the NCFD budget is personnel costs
o Layoff of (3) Captains, (3) Engineers, (5) Firefighters: $1.76 million
o Layoff of (2) Fire Inspectors: $188k
o Increased firefighter injuries due to inadequate staffing
• Increased patient pain and suffering; loss of life
• Increased ISO rating results in increased insurance rates by 5-10% for homeowners and
businesses
Attachment C
• Increased property losses
• Non-compliance with NFPA 1710:
o Requires 17 firefighters on fire ground
o Currently a maximum of 13 NCFD firefighters will respond plus 4 firefighters
from other fire departments
o Proposed closure a maximum 9 NCFD firefighters will respond plus 8 firefighters
from other fire departments
o Half of the responding firefighters will be from other fire departments
• Increased reliance on automatic aid
• Increased response times and workload from Station 34
• Increased response times from other fire departments: 15-20 minute response times
• Increased dependence on other fire departments that may not be available for responses
to National City
• Potential for other fire departments to charge for responding to National City
• Reduced productivity and morale may result in increased turnover of firefighters; cost to
recruit, train, and equip (1) firefighter: $15,000
• Lost efficiency on fire ground due to recruit firefighter inexperience — (3) years to fully
train a firefighter
• Potential for no response east of I-805 after a natural disaster such as an earthquake
• Lost Revenue
o Lower Sweetwater Fire Protection District Contract: $275,000 per year
o American Medical Response: $23,580 per year
• Increased response times for processing business licenses
• Increased response times for processing plans
• Increased dependence on Esgil (contractor) to process building permits/plans
• Reduced productivity and morale
• Potential for non -compliant building structures being built due to lack of ability to
conduct enforcement
• Lost efficiency in processing business licenses that require Fire approval
• Potential to lose revenue due to staffing shortages
o Building Permits
o Enforcement Fines & Penalties
o Plan Checking Fee
0
Attachment C
Summary
Total projected Savings: $1,850,442
Personnel Reductions- Dollar and % Savings: $1,850,442 (24%) in FY17
FTE Reductions:
Position Title FTE* Count
Fire Captain 3.0
Fire Engineer 3.0
Firefighter 6.0
Fire Inspector 2.0
Total 14.0
M & 0 Reductions- Dollar and % Savings: N/A
Major community impacts: Closure of Station #31 would result in longer response times,
which will result in increased patient pain and suffering; loss of life, and property damage. Tax
revenue generated from new businesses will be delayed due to staff shortages, which will result
in less tax revenue for the City.
Attachment C
CALIFORNIA
S Jf
INCORPURAT'BS7{
Departmental
THREE YEAR OPERATING PLAN
Department Name: Housing, Grants & Asset Management
Department Description: The department works to process grants, improve housing conditions,
provide a senior wellness program, and administers real property asset management services for
properties owned by the City of National City.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
County Contract
$ 270,000
$ 270,000
$ 270,000
$ 270,000
General Fund
$ 405,663
$ 405,663
$ 405,663
$ 405,663
Program Income
$ 99,000
$ 99,000
$ 99,000
$ 99,000
Other
$ 31,500
$ 31,500
$ 31,500
$ 31,500
Total Revenues
$ 806,163
$ 806,163
$ 806,163
$ 806,163
Expenditures
Personnel
$ 523,392
$ 525,033
$ 538,134
$ 551,611
M&O
$ 106,850
$ 106,850
$ 106,850
$ 106,850
Food/Supplies
$ 265,000
$ 265,000
$ 265,000
$ 265,000
Total Expenditures
$ 895,242
$ 896,883
$ 909,984
$ 923,461
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
County Contract
$ 270,000
$ 270,000
$ 270,000
$ 0
General Fund
$ 405,663
$ 405,663
$ 405,663
$ 80,649
Program Income
$ 99,000
$ 99,000
$ 99,000
$ 99,000
Other
$ 31,500
$ 31,500
$ 31,500
$ 20,000
Total Revenues
$ 806,163
$ 806,163
$ 806,163
$ 199,649
Expenditures
Personnel
$ 523,392
$ 525,033
$ 538,134
$ 151,989
M&O
$ 106,850
$ 106,850
$ 106,850
$ 42,500
Food/Supplies
$ 265,000
$ 265,000
$ 265,000
$ 0
Total Expenditures
$ 895,242
$ 896,883
$ 909,984
$ 194,489
1
Attachment C
Program/Service #1 — Nutrition Center
Description: The objective of the program is to promote better health through good nutrition, reduced
isolation, sound education and information to meet the needs of older adults.
The George H. Waters Nutrition Center (Nutrition Center), located at 1415 D Avenue, National City, is
an anchor in the National City community where a wide segment of older adult population have outlived
their social circles and for whom isolation is a critical issue; those that may be exhausted by the idea of
meal preparation; those that have lost their sense of taste and have become indifferent to cooking; and
all of whom need one warm, well -balance meal daily.
The Nutrition Center served its first meals in both the congregate setting and home delivered meals in
1979. For many years the center has provided meals to the Adult Day Health Care Centers under the
auspices of Adult Protective Services. Home delivered meals have been a part of the center program
since 1980 serving over 100 homebound, frail or otherwise disabled or handicapped seniors. The
Nutrition Center is funded thru the Older American Act Title III. This federal program is administered
by both State and County and is regulated by the California Department of Agriculture (CDA.)
There are two components fundamental to the operation of the Nutrition Center: One is to recognize that
wholesome food is essential to maintain a sense of physical well-being and two, to create an atmosphere
where food is a shared social experience that offers companionship, creates a sense of daily comfort and
security, and encourages fellowship through peer involvement.
Since its inception, the Nutrition Center has provided hot meals to thousands of senior residents at
reduced costs. The Nutrition Program offers one on -site (congregate) nutritionally balanced meal per
day for senior adults sixty (60) years and older. In 2013, the average congregate meal count has been
one -hundred sixty-seven (167) per day and another one -hundred (100) meals delivered through the
Home Delivery Program. Meals are prepared on -site by an Executive Chef and a team of food service
professionals.
Proposed Changes
In order to achieve the required savings and maintain services, the Nutrition Center should be considered
for outsourcing to a third party contractor to assume all obligations of the County of San Diego contract
including all operational food service management responsibilities. There are private operators of
similar programs that produce high volumes of meals per day on a national level. This model provides
operators with enormous buying power for raw food product and considerable expertise in cost effective
production techniques. The County contract allows the City Nutrition Center to disentangle services and
transition to a new third party service provider.
The City of National City entered into the current contract with the County of San Diego on July 1,
2010. The contract cannot be extended beyond June 30, 2014. The contract requires the City's Nutrition
Center Program to provide 38,400 congregate meals and 29,700 home delivered meals. The contract
also requires the City to maintain an adequate number of qualified persons to assure satisfactory
implementation of: program planning, provision of nutrition services, outreach and other services,
2
Attachment C
volunteer activities, financial and contractual management, and data collection for required federal, state
and county reports and records.
On July 1, 2014, the City and County may be entering into a new one (1) year contract with a County
option to extend for three (3) increments of one (1) year each for a total of three (3) years beyond the
expiration of the initial term. The term of the contract potentially could be extended to June 30, 2018.
As with the current contract, the new contract will require the City maintain an adequate number of
qualified persons to assure the delivery of services.
Though the Nutrition Center has been providing an excellent nutritional program for seniors, it has a
history of operating with a funding deficiency. For many years, the City has provided an operating
subsidy to the Nutrition Center program. The City/County agreement is not structured to allow a
contractor, such as the City, to maintain a fully staffed kitchen without some form of additional revenue.
Listed below are the annual subsidy amounts funded from the City general fund over the last four (4)
years.
FY 10 -$320,589
FY 11 -$366,260
FY 12 -$269,349
FY 13 -$308,499
The city general fund annual subsidy averaged $317,468 over the past four years. The City's Finance
Department estimates the general fund operating subsidy to increase to slightly over $405,663 in FY
2014. Furthermore, due to federal budget cuts related to federal sequestration for Fiscal Year 2013-14,
the FY 2014 budget was reduced by $58,642 by the County Department of Aging and Independent
Services. Future reductions to the County contract are uncertain at this time.
A competitive solicitation should be authorized in the first quarter of calendar year 2016 to procure a
qualified and experienced operator interested in accepting the operational obligations of the George H.
Waters Nutrition Center beginning July 1, 2016. Outsourcing of the program would allow the City of
National City to continue this valuable service at a substantial savings.
Should the food preparation component be outsourced, the home delivery and congregate meal dining
room may only require approximately three (3) part-time positions to operate at a salary/benefits costs of
approximately $105,340 and $4,500 in maintenance/operations. The City may be able to negotiate with
the County of San Diego to retain program income (estimated at $99,000 plus) or a portion thereof from
customer donations.
Program Impacts
If a 24% reduction is proposed, a cutback in the operating budget would make it highly improbable that
the Nutrition Center could meet the County contract requirements listed above.
As stated above, the objective of the program to promote better health through good nutrition, reduced
isolation, sound education and information to meet the needs of older adults would continue. The dining
3
Attachment C
room would remain open to create an atmosphere where food is a shared social experience that offers
companionship, creates a sense of daily comfort and security, and encourages fellowship through peer
involvement. Additionally, seniors would continue to receive wholesome food from a reputable third
party provider both in the dining room and through the Home Delivery Program.
Customers, however, may notice a change to the quality of food. Food would undoubtedly be prepared
in a larger commercial kitchen with, perhaps, less emphasis on food quality.
The outsourcing of the food preparation component of the Nutrition Center Program would result in the
closure of the kitchen and the elimination of six and three quarter (6 3/4) part/full time positions with a
total savings of approximately $360,973.
There are no other public or private entities in the South Bay who duplicate the Nutrition Center's
program for the benefit of the seniors. The only other meal service in the area, St. Jude's Catholic
Church, discontinued services in June 2013. According to the Nutrition Center Program Manager, the
Nutrition Center inherited many of the clients from St. Jude's Catholic Church.
The Nutrition Center Program is consistent with Strategic Plan Objective 5e) which reads "Advance
National City wellness programs for youth, families, seniors, and City employees that encourage a
healthy lifestyle."
Summary
Total projected Savings: $424,723
Personnel Reductions: $360,973
% Savings 79%
FTE Reductions: 6
Position Title
Nutrition Center Manager
Executive Chef
Sous Chef
Home Delivered Meals Coord
Office Assistant
Food Service Worker
Food Service Worker
Food Service Worker
Dishwasher
Total
FTE* Count
1.0
1.0
1.0
0.25
1.0
0.5
0.75
0.75
0.5
6.75
Savings
$113,064
$ 70,426
$ 57,862
$ 13,964
$ 52,686
$ 10,636
$ 22,793
$ 10,089
$ 9,453
$360,973 (75% Savings)
4
Attachment C
M & 0 Reductions- Dollar and % Savings:
Account Savings
Electricity and Gas
Permits and Licenses
Kitchen Equipment
Consumable supplies
Total
$20,000
$ 250
$ 3,000
$40,500
$63,750 (93% Savings)
Major community impacts:
1. Outsourcing of jobs and loss of employment by kitchen staff.
2. Loss of local control on the way service is managed and how decisions are made.
3. Possible decline of food quality.
4. Possible loss of customers because of decline of food quality.
5. Possible loss of customers because they feel disconnected with new provider.
6. Loss of County contract funding due to loss of customers.
5
Attachment C
Program/Service #2 - Department Administration
Description: The purpose of the Director is to plan, organize, and direct the activities of the Housing,
Grants, and Asset Management department, including the supervision, training, and evaluation of
employees; provide professional leadership for the department and participate as an effective executive
team member.
Proposed Changes
The general fund has supported 50% of the Director's position because he oversees both the Nutrition
Center and Asset Management responsibilities that are funded partially through the general fund.
Community Development Block Grant funds, HOME funds, and Low Mod Housing Funds (Account
532) are restricted funds and should not be used entirely to fund a position that has general fund
responsibilities. The department has also brought in approximately $2,074,940 in revenues to the general
fund this year. Additional lease revenues to the general fund of $75,000 are anticipated from lease
payments beginning in FY 17. Nevertheless, the general fund portion for this position may be reduced
to 25%. Beginning on July 1, 2016, the Director's position will be budgeted at 25% from the general
fund rather than 50%.
Should the City Council decide to sale some of its real estate portfolio, a substantial amount of revenue
will accrue in the city's general fund account. It is estimated that the sale of city property may increase
general fund revenues substantially over the next 2-3 years. Should these revenues come to fruition, then
the general fund proportionate share for salary/benefits for the Director, Division Manager, and Property
Agent should increase proportionately as general fund revenues increase.
Program Impacts
No impacts will be experienced by the programs currently being administered by the Department of
Housing, Grants, and Asset Management.
In FY 17, by appropriating 25% of the Directors position cost to account 532 (Low Mod Housing Fund),
the city general fund would save approximately $42,649.
To avoid any audit findings, the City must be careful not to fund positions disproportionately to the
percentage to activities associated to federal grants and local activities.
This program is consistent with Strategic Plan 4) "Enhance Housing and Community Assets."
Summary
Total projected Savings: $42,649 (50%)
Personnel Reductions- Dollar and % Savings: $42,649 (50%)
FTE Reductions: .25
Position Title FTE* Count Savings
Executive Director .25 $42,649
6
Attachment C
M & 0 Reductions- Dollar and % Savings:
Account
Professional Services
Training, Travel
Loan Settlements
Materials & Supplies
Total
Major community impacts:
None
Savings
$ 24,000
$ 1,000
$ 12,500
$ 500
$ 38,000 (0%)
7
Attachment C
CALIFORNIA
% t.0NAL Cirr
INCORPUnnatS{
Departmental
THREE YEAR OPERATING PLAN
Department Name: Human Resources
Department Description:
The Human Resources Department has overall responsibility for the recruitment and
examination of all job applicants, administration of the of the City's classification and
compensation system, labor negotiation and contract administration, and administration of the
equal opportunity program. In addition, the Department manages employee benefit programs and
investigates possible disciplinary actions. While working closely with the Civil Service
Commission, the Human Resources Department provides technical assistance to other
departments regarding staffing, discipline, organizational structure, and the interpretation of
Civil Service Rules and State and Federal personnel laws and regulations.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$332,068
$339,556
$347,441
$355,498
M&O
$58,870
$58,870
$58,870
$58,870
Total
Expenditures
$390,938
$398,426
$406,311
$414,368
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$332,068
$339,556
$347,441
$285,858
M&O
$58,870
$58,870
$58,870
$29,060
Total
Expenditures
$390,938
$398,426
$406,311
$314,918
Three Year Operating Plan — Human Resources
Page 1 of 3
Attachment C
Program/Service
Description:
Recruitment and selection; employee training and development; and customer service.
Objective:
To ensure compliance with local, State and Federal laws as they pertain to the selection,
retention and separation of the City of National City labor force, in a manner consistent with the
City's core values and strategic objectives.
Proposed Changes
Human Resources proposes to reach the 24% reduction in fiscal year 2017 through a
combination of Personnel and Maintenance and Operation (M&O) reductions.
Personnel: elimination of 1.0 Administrative Secretary for an estimated savings of $69,640.
M&O: a reduction of $29,810 from various line items.
Program Impacts
Personnel
The Human Resources Department is composed of 2.0 full-time positions: 1.0 Management
Analyst II and 1.0 Administrative Secretary. Staff is managed and additional professional level
administrative support is provided by the Director of Administrative Services. At full staff, the
department has 4.0 positions: 1.0 Management Analyst II, 2.0 Executive Assistant II and 1.0
Administrative Secretary. The current staffing presents a 50% reduction in total staffing and a
100% reduction in paraprofessional staffing (the loss of the 2.0 Executive Assistants II). With the
proposed reduction of 1.0 Administrative Secretary, the department will experience a 75%
reduction in staffing. Impacts will include:
• "Dark hours" wherein the offices are closed to the public (both telephone and walk-ins)
due to insufficient staffing levels. Dark hours are anticipated to be not less than 8 hours
per week.
• Delays in processing new employees and volunteers
• Delayed response to requests for service from employees and the public
• Delays to reporting to regulatory agencies such as the Employment Development
Department and CaIPERS.
Maintenance and Operation
• The loss of training dollars will hamper the department's ability to stay abreast of current
trends and legal mandates which may result in increased litigation costs.
• The loss of medical services, professional services, advertising, and promotional activity
dollars:
o Will restrict the department's ability to recruit, test and process new hires and
promotional candidates for safety sensitive and other critical positions.
Three Year Operating Plan — Human Resources
Page 2 of 3
Attachment C
o All non -legally mandated training City-wide training (ie customer service
training) will be suspended.
• The loss of governmental purposes dollars will result in a suspension of the employee
service award program.
Summary
Total projected Savings: $99,450
Personnel Reductions- Dollar and % Savings: $69,640 (16.81%)
FTE Reductions:
Position Title FTE Count
Administrative Secretary 1.0
Total 1.0
M & 0 Reductions- $29,810 (7.19%)
Account Savings
Medical Services $4,000
Technical Services $ 500
Governmental Purposes $7,430
Professional Services $6,000
Training $4,380
Printing $ 500
Advertising $1,000
Promotional Activities $5,800
Office Equipment $ 200
Total $29,810
Major community impacts:
• Significant delays in processing employee applications
• Significant delays in processing new hires
• Delays in Human Resources' hiring processes result in decreased efficiency in other City
departments caused by reduced staffing thus indirectly reducing service levels to the
community
Three Year Operating Plan — Human Resources
Page 3 of 3
Attachment C
CALIFORNIA
Val ()NAL CITY
INCORPORATED
Departmental
THREE YEAR OPERATING PLAN
Department Name: Library
Department Description:
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$944,414
$944,414
$944,414
$944,414
Expenditures
Personnel
$860,304
$860,304
$860,304
$860,304
FT: $532,219
FT: $532,219
FT: $532,219
FT: $532,219
PT: $328,085
PT: $328,085
PT: $328,085
PT: $328,085
M&O
$80,587
$80,587
$80,587
$80,587
Total
Expenditures
$944,414
$944,414
$944,414
$944,414
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$944,414
$944,414
$944,414
$717,755
Expenditures
Personnel
$860,304
$860,304
$860,304
$678,038
FT: $532,219
FT: $532,219
FT: $532,219
FT: $532,219
PT: $328,085
PT: $328,085
PT: $328,085
M&O
$80,587
$80,587
$80,587
$39,717
Total
Expenditures
$944,414
$944,414
$944,414
$717,755
Program/Service #1 - Library Services
Description: Library Services: Circulation, Children's Services, Reference Services, Technical
Services, Technical Support, and Computer Centre Services.
12.2.13 and
Attachment C
Proposed Changes
Effective July 1, 2016, the following cost-cutting measures will be implemented:
1. Reduction in Library Service Hours; 2. Reduction in Staffing Levels
1. Reduction in Library Service Hours
Reduce hours of operation from the current weekly 48 hours to 37 hours with shorter weekday
hours from Mondays to Thursdays and fewer weekend hours.
Current Business Hours: 48 hours
Proposed Business Hours: 37 hours
Monday - Thursday
10:00 am — 8:00 pm
Monday — Thursday
12:00 — 8:00 pm
Friday
Closed
Friday
Closed
Saturday
1:00 — 5:00 pm
Saturday
Closed *
Sunday
1:00 — 5:00 pm
Sunday
12:00 — 5:00 pm
* Plus additional facilities/utilities cost savings
2. Reduction in Staffing Levels
Reducing hours of operation will invariably impact staffing levels. The library will be open
fewer hours and staffing levels will be lower during the hours that it is open. The proposed
business hours schedule translates into a loss of 10 part-time positions or 4.5 FTE positions.
Current PT Positions
Proposed PT Positions
Positions
# of positions
Weekly Hours
# of positions
Weekly Hours
Circulation
10
130
7
70
Children's Services
2
24
1
13
Reference
6
89
4
44
Technical Services
2
30
0
0
Technical Support
1
19
0
0
Computer Centre
4
52
3
37
Total:
# positions: 25
Weekly: 344 h
# positions: 15
Weekly: 164 h
4 Loss: 130 h or
4.5 FTE positions
Program Impacts
• Personnel
• Fewer front line and support staff; or
• "Single -desk service" model
• Increased workload on remaining staff
• Emotional impact on workforce: stress, low employee morale.
• Service delivery
• Service reductions and/or eliminations
• Increase of self-service and online options
• Reduction of direct or one-on-one customer assistance
12.2.13 and
Attachment C
• Longer waiting times, longer handling times, slower workflow
• Fewer new materials purchase; slower turnaround time for new materials
• Elimination of in-house cataloging/material processing service
• Fewer quality databases available at the library and remotely from home
• Technology upgrade and/or technical -related expenses postponement/delay
• Likely to do more customer referrals to peer libraries or other agencies
• Estimated Savings
■ $147,430
Program/Service #2 — Literacy Services
Description: Literacy Services: Adult Literacy, Family Literacy, and Computer Literacy
Services.
Proposed Changes
Effective July 1, 2016: Elimination of Literacy Services.
Currently Literacy Services is supported by Literacy and CDBG grants which cover 70% of the
Literacy Coordinator position; and by the General Fund which covers the Literacy support staff.
Unless other grant opportunities can be identified to fund the operation, Literacy Services will be
discontinued, a loss of 3 positions or 0.90 FTE position.
Current Literacy Hours: 30 hours
Proposed Literacy Hours: 0
Monday - Thursday 11:00 am — 6:00 pm
Service will not be provided
Some weekend hours to accommodate
learners who cannot come in during the week
Current PT Positions
Proposed PT Positions
# of positions
Weekly Hours
# of positions
Weekly Hours
Literacy
3
36
0
0
b Loss: 3 positions or
0.90 FTE positions
Program Impacts
• Personnel
• Loss of 3 positions
• Service delivery
• Elimination of Literacy Services
• Learners to be referred to other Literacy programs in San Diego
• Estimated Savings
• $38,320
12.2.13 and
Attachment C
Summary
Total projected Savings:
Personnel Reductions- Dollar and % Savings:
FTE Reductions:
Position Title
Librarian
Sr. Library Technician
Library Technician
Library Assistant
Office Aide
Total
FTE* Count
1.125
0.30
0.275
1.60
2.10
5.4
M & 0 Reductions- Dollar and % Savings:
Account Savings/reductions
Memberships/Subscription
Printing & Binding
Postage
Contract Services
Magazines/Newspapers
Books Budget
Materials & Supplies
$57
$500
$3,000
$6,850
$1,000
$25,000
$ 4,463
Total $40,870
Personnel: $185,750
M & O: $40,870
Total savings: $226,620
$185,750 NI 19.67% savings
5.40 FTE reductions
$40,870 b 4.33 %
Major community impacts:
The Library offers the community free access to materials, resources, literacy services, quiet
study spaces, computers, and the Internet. People need an Internet connection to access basic
and crucial services for their daily needs such as: applying for government programs, permits,
licenses, jobs online; obtaining health information; taking online classes or completing online
certification programs; paying bills; visiting social networking sites, just to name a few.
Reducing services and operating hours will restrict access to the only free resources people have
come to rely on so heavily and make it more difficult for individuals and families to survive and
weather out the economy crisis.
12.2.13 and
Attachment C
CALIFORNIA
NATIOONAL CITY
IYCOAPOR �7'
Departmental
THREE YEAR OPERATING PLAN
Department Name: Management Information Systems
Department Description:
MIS division advises the City Manager's Office and other City departments on technology
issues. Information Technology staff implements solutions, repairs systems, installs software and
provides support to users in City departments.
General Budget:
2014
Adopted
2015
Estimated
2016
Estimated*
2017
Estimated*
Revenues +
$1,736,188
$1,736,188
$1,736,188
$1,736,188
Expenditures
Personnel
$331,369
$341,275
$351,718
$362,475
M&O
$1,404,819
$1,394,913
1,384,470
$1,373,713
Total
Expenditures
$1,736,188
$1,736,188
$1,736,188
$1,736,188
+stated revenue represents revenue provided to this Internal Service Fund from the General
Fund. This exercise should be based upon a 24% reduction in this figure.
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$1,736,188
$1,736,188
$1,736,188
$1,319,503
Expenditures
Personnel
$331,369
$341,275
$351,718
$362,475
M&O
$1,404,819
$1,394,913
1,384,470
957,028
Total
Expenditures
$1,736,188
$1,736,188
$1,736,188
1,319,503
Three Year Operating Plan — MIS
Page 1 of 2
Attachment C
Program/Service
Description:
Purchase and support of City-wide technology.
Proposed Changes
M&O: a reduction of $416,685 from various line items.
Program Impacts
• Reduced network support which could result in system outages
• 20% reduction in City -issued cellular and smart phones
• 15% reduction in software and hardware purchases
• Suspension of capital outlay projects such as the Library and Police Department service
equipment refresh projects.
Summary
Total projected Savings: $416,685
Personnel Reductions- Dollar and % Savings: n/a
FTE Reductions: n/a
M & 0 Reductions- $416,685 (24%)
Account Savings
Telecommunications & Telephone
and Telegraph $ 29,215
Office Equipment $ 82,500
Contract Services $ 95,570
Computer Equipment Outlay $209,400
Total $416,685
Major community impacts:
Potential impacts to public access of public information via the internet, the Library computer
learning center, and WiFi availability in City facilities
Three Year Operating Plan — MIS
Page 2 of 2
Attachment C
CALIFORNIA "
NATIONAL City
Aar./
NCORPORhTEv
Departmental
THREE YEAR OPERATING PLAN
Department Name: Neighborhood Services Division
Department Description: The Neighborhood Services Division houses the Code Enforcement
Unit, Graffiti Abatement Unit, Parking Regulations Unit, Neighborhood Preservation Program /
Homeless Outreach and the location to apply for Temporary Use Permits. Code Enforcement
tackles quality of life issues, such as property appearance, land use and enforcing the City's
Municipal Code. The Graffiti Removal Unit abates graffiti on our public right-of-ways and
private property. The Parking Enforcement and Vehicle Abatement are responsible for the
enforcement of local ordinances and California Vehicle Code regulations related to the parking
and storing of vehicles. Our goal is to respond to service calls within 48 hours of the request.
NSD also process Temporary Use Permits used for special activities, events, or structures that
are beneficial to the Public for limited periods of time; with coordination of temporary
compliance with building, fire, zoning, and other local codes. In general, any organized activity
that uses public property, facilities, parks, sidewalks, streets, or any public right-of-ways will
require the organizer(s) to obtain a permit. In some cases, activities or events taking place on
private property may also require a TUP. Our Division staff work 6-7 days a week to provide
consistent and responsive service.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$370,000
$385,000
$400,000
$415,000
Expenditures
Personnel
$602,012
$622,612
$644,329
$666,742
M&O
$285,400
$285,400
$285,400
$285,400
Total
Expenditures
$887,412
$908,012
$929,729
$952,142
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$602,012
$622,612
$644,329
$452,185
M&O
$285,400
$285,400
$285,400
$270,400
Total
Expenditures
$1,044,232
$1,064,832
$1,086,549
$722,585
Attachment C
Program/Service #1
Description: Code Conformance
Proposed Changes
Elimination of 1.0 Code Conformance Officer position effective July 1, 2016 (fiscal year 2017).
Program Impacts
The City does have a legal mandate to maintain health and safety codes related to our Municipal
Code and the code conformance goals and elements are a part of our Strategic plan. Service
delivery type for this position is handled at City or agency level and most are either municipal or
county. There are now organizations / businesses within the private sector that offer this type of
position / field service.
Estimated savings would be the full cost of personal for these positions.
Program/Service #2
Description: Graffiti Abatement Staff
Proposed Changes
Eliminate the Graffiti Abatement Program effective July 1, 2016 (fiscal year 2017).
Program Impacts
The City does have a legal mandate to maintain health and safety codes related to our Municipal
Code and promoting a healthy community is part of our Strategic plan. Service delivery type for
this position is handled at City or agency level and most are either municipal or county. There
are now organizations / businesses within the private sector that offer this type of position field
service.
Summary
Total projected Savings:
Personnel Reductions: $214,557 (22.5%)
FTE Reductions: 3.0
Attachment C
Position Title FTE* Count
Code Conformance Officer II 1.0
Graffiti Abatement Assistant 1.0
Graffiti Removal Technician 1.0
Total 3.0
M & 0 Reductions- Dollar and % Savings: $15,000 (2%)
Account Savings
Painting Supplies $15,000
Major community impacts:
Impacts to the community with the elimination of one full time Code Conformance Officer, two
full time Graffiti Abatement positions and one Senior Assistant would be major. Being the first
line of support as it relates to customer service, quality of life issues, property appearance and
municipal code violations, Neighborhood Services would no longer be able to provide 7day
coverage or 24hr to 48hr response time to complaints related to both code enforcement and
graffiti removal. Graffiti service coverage would no longer exist and the phone hotline and email
complaints would be eliminated. No coverage of graffiti removal will lead to longer periods of
time without removal which in turn allows additional tagging's and graffiti markings to go up.
Currently we service several project areas such as the I-54 bike trail and trolley routes that
normally require a two man crew. This elimination would require the configuration of staffing
support from Public Works to assist during the selected work week for damage on public / City
property. The routine maintenance and coverage of our City parks will also be affected by the
personal elimination, currently we able to service all parks and additional areas such as Paradise
Creek, but with no staffing this will be impacted.
Elimination of a Code Conformance Officer would reduce staffing levels back to one full time
code officer with Neighborhood Services Division. Similar to graffiti complaints, our code
enforcement service request response times and caseloads will increase with extended periods of
non-compliance. Code enforcement is responsible for investigating code complaints that affect
the health and safety of residents, and property maintenance by enforcing a number of City
regulations such as the Neighborhood Preservation Ordinance provisions of the Land Use Code,
and Sign Code. These are the codes that ensure owners maintain their properties, which then
helps protect citizens' health, safety and welfare. Reduced code enforcement levels will have a
direct impact on preserving the livability and property values of National City's neighborhoods.
Elimination of a Code Conformance Officer and Graffiti Abatement staff will go against our
strategic objectives of Promoting Healthy Communities by not enhancing our Neighborhood
Services and reducing the ability to improving the quality of life.
Attachment C
CALIFORNIA
N 10NAL city
INCORPUnnatS{
Departmental
THREE YEAR OPERATING PLAN
Department Name: Non -Departmental
Department Description: This budget contains expenditures that affect all depaitinents or the
City as a whole. Examples of City expenditures include memberships, legislative representation,
educational reimbursement program, printing and postage. This fund also provides contributions
to various organizations as recommended by the City Manager and City Council.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
M&O
$742,809
$742,809
$742,809
$742,809
Total
Expenditures
$742,809
$742,809
$742,809
$742,809
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
M&O
$742,809
$742,809
$742,809
$556,248
Total
Expenditures
$742,809
$742,809
$742,809
$556,248
Program/Service
Description:
Proposed Changes
Across the board cuts to M&O
Attachment C
Program Impacts
The reduction of most of the 600 level accounts would eliminate funding for the Chamber of
Commerce sponsorship, 4th of July Fireworks, Miss National City, and Wellness program events.
Subscriptions we would eliminate include the Chamber of Commerce and 211. Programs that
would be cut include Graffiti tracker and the Property Management of S/A properties.
The complete reduction of all non -departmental training, travel, and subsistence would
hinder all City departments that count on these funds to further professional development.
A partial reduction of memberships & subscriptions is due to the need for LAFCO and
inclusion in the California League of Cities.
Summary
Total projected Savings:
M & 0 Reductions: $186,561 — 25% Savings
Account Savings
650- Chamber of Commerce $50,000
650- Miss National City $1,450
650- Independence Day Fireworks $7,000
650- Call 211 San Diego $11,800
650- Graffiti Tracker $2,850
650- Wellness Program $10,500
650- Property Mgmt for S/A Properties $60,000
226: Training, Travel, Subsistence $18,000
258: Travel & Subsistence $9,500
222: Memberships & Subscriptions $15,461
Total $186,561
Major community impacts
The major impacts the community would notice include the elimination of the Independence Day
fireworks, Miss National City Pageant. Service reductions for the community would be felt
through the elimination and reductions in programs including graffiti tracker, 211.
Attachment C
CALIFORNIA
NATIONAL C T y.
MeoRFUn NTED
Departmental
THREE YEAR OPERATING PLAN
Department Name: Police
Department Description: Provide Public Safety and Enforcement
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$16,039,224
$16,545,947
$17,106,695
$17,684,781
M&O
$2,023,165
$2,023,165
$2,023,165
$2,023,165
Total
Expenditures
$18,062,389
$18,569,112
$19,129,860
$19,707,946
*include all projected changes in expenditures, revenues and staffing (i.e. salary adjustments,
staffing increases or reductions)
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$16,039,224
$16,545,947
$17,106,695
$13,056,781
M&O
$2,023,165
$2,023,165
$2,023,165
$ 2,023,165
Total
Expenditures
$18,062,389
$18,569,112
$19,129,860
$15,079,946
Program/Service
National City Police Department's mission is to protect and serve the residents of National City,
enhance public safety, reduce the incidents of crimes as well as the fear of crime, while working
with a diverse community to improve their quality of life with duty, honor and integrity, while at
all times holding ourselves to the highest service standards for the citizens and members of the
National City community. We will accomplish this mission by working in partnership with our
community and being committed to providing the highest level of service and public safety. We
will pursue this commitment with an unwavering resolve while always respecting the rights and
dignity of those we serve.
1
Attachment C
Proposed Changes
To obtain an overall reduction of 24% the Department would have to reduce its overall budget
expenditures for 2017 by $4,729,900 ($22,290,139-$2,582,220 internal charges=$19,707,919 X
24%) this is would require a reduction in police officers from the current staffing of 82 officers
to 45 (37 x $125,000) officers for a total savings of $4,625,000 (23.4%). The additional
reduction would be from the Maintenance and Operating account which would be reduced by
$79,895 (.04%). The M&O accounts affected would be Investigations ($5,000); non -Post
Training ($35,000); Ammunition ($ 25,000) Patrol Supplies ($14,895)
Program Impacts
• The major impact would be a reduction in personnel staffing from 82 officers to 45
officers
• Service delivery would be affected by a reduction or elimination in services in the
following areas:
o Gang Enforcement Team would be eliminated: Gang activity could increase.
o Investigations personnel would be reassigned; only violent crimes would be
investigated; homicide investigation might have to be investigated via contract to
the Sheriff's Department: Can result in increase in violent and property crime
rate.
o Traffic Unit elimination: can result in an increase accidents and loss of grants
from the Office of Traffic Safety and Safe Routes to School.
o Community Service Unit elimination: Increase in service to Schools since no
officers would be assigned. No outreach to community for prevention programs
which may result in an increase in the City's crime rate.
o SWAT Team elimination: May reduce Department's ability to respond to major
shootings incidents or barricaded suspects: may decrease community and officer
safety.
• The Department is legally mandated to report the following statistics:
o Crime Reporting
o Sex Crimes
o Missing Persons
• The Department is legally mandated to report and investigate the following :
o Complaints against officers
o Register: Sex Offenders, Narcotic Registrants, Arson Registrants
• The following City Strategic elements would be negatively affected:
o Provide Quality Services: The Department would be unable to fulfill current
requests.
o Improve Quality of Life: Crime rate and gang activity would probably increase
reducing the quality of life for our residents.
2
Attachment C
o Promote a Healthy Community: A possible increase in street crime may deter
residents from walking, biking and participating in community events.
• Estimated Savings are $4,729,900; economic losses to the community cannot be
estimated if people do not feel secure and safe to shop in National City.
Revised General Fund Budget:
Summary
Total projected Savings:
Personnel Reductions-$4,625,000 (23.4%):
FTE Reductions:
Position Title FTE* Count
Police Officer
Total
37.0
37.0
M & 0 Reductions- Dollar and % Savings: $79,895 (.04%)
Account Savings
Investigations $5,000
Non -POST Training $35,000
Ammunition $25,000
Patrol Supplies $14,895
Total $79,895
Major community impacts:
These reductions would have a major impact on the Department's ability to provide basic police
services to the National City community. Response times for emergency services would
probably increase as well as the City's crime rate.
3
Attachment C
CALIFORNIA
NAT'I.00NAL, CfTy
INCOIi,POP A'fE0
Departmental
THREE YEAR OPERATING PLAN
Department Name: Planning Division
Department Description: Current and Advance Planning Functions
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$61,658
$62,274
$62,897
Expenditures
Personnel
$304,390
$311,328
$318,565
$325,989
M&O
$87,488
$87,488
$87,488
$87,488
Total
Expenditures
$391,878
$398,816
$406,053
$413,477
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
$61,047
$61,658
$62,274
$62,897
Expenditures
Personnel
$304,390
$311,328
$318,565
$227,954
M&O
$87,488
$87,488
$87,488
$87,488
Total
Expenditures
$391,878
$398,816
$406,053
$315,442
Program/Service
Description: Advance Planning.
Advance Planning conducts strategic long-range planning and develops policies on land use,
growth and development, infrastructure, facilities and services, the environment and natural
resources, economic development, equity and environmental justice, sustainability, and other
policy areas. The advance planning function is dependent on current and future federal, state,
and regional planning mandates as well as adopted and future local policies, community- and
Attachment C
stakeholder -driven initiatives, changes in market and economic conditions, and fluctuations in
development activity. The extent of advance planning activities is dependent on the allocation of
available resources based on policies and priorities.
Proposed Changes
Reduce staff by one principal planner position beginning in fiscal year 2017.
Program Impacts
The program change would reduce staffing by one principal planner. Advance planning
functions would be eliminated, reduced, and/or assumed by remaining staff. The City would
continue to be subject to current and future statutory requirements and legally mandated
programs that are typically addressed through the advance planning function. However, the City
may not be able to comply with all requirements and mandates in a timely manner with the
reduction of staffing levels. Beginning in 2017, the reduction in staff would result in a savings
of approximately 49 percent (includes revenues of approximately $62,897 previously not
budgeted).
Summary
Total projected Savings: $200,673 (includes $62,897 in revenue not previously budgeted) in
2017
Personnel Reductions- Dollar and % Savings: $98,035 (24%)
FTE Reductions:
Position Title FTE Count
Principal Planner 1.0
Total 1.0
M & 0 Reductions- Dollar and % Savings: N/A
Major community impacts:
The community would be affected by the reduction or elimination of planning policy analysis
and development. Some of the activities, initiatives, and efforts that could be eliminated or
reduced include strategic and comprehensive planning for future growth and development;
coordination of regional and area -wide planning, and implementation of major policies dealing
with sustainability, environmental health, economic development, social equity, etc. In addition,
certain funding sources, e.g. grants, are contingent upon adequate and up-to-date planning
policy. Reduced staffing levels would affect the ability to maintain planning policy and comply
with planning mandates into the future.
Attachment C
CALIFORNIA
NA.TIOONAL CITY
IYCOAPOR �7'
Departmental
THREE YEAR OPERATING PLAN
Department Name: Risk Management
Department Description: Risk Management provides centralized administration of the City's
safety, liability, and Workers' Compensation programs.
General Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$45,617
$47,333
$49,133
$51,001
M&O
$2,654,787
$2,654,787
$2,654,787
$2,654,787
Total
Expenditures
$2,700,404
$2,702,120
$2,703,920
$2,705,788
Revised General Fund Budget:
2014
Adopted
2015
Estimated*
2016
Estimated*
2017
Estimated*
Revenues
Expenditures
Personnel
$45,617
$47,333
$49,133
-
M&O
$2,654,787
$2,654,787
$2,654,787
$2,056,369
Total
Expenditures
$2,700,404
$2,702,120
$2,703,920
$2,056,369
Three Year Operating Plan — Risk Management
Page 1 of 3
Attachment C
Program/Service
Description: see description above
Objective:
To managed the City's liability, workers' compensation and safety programs.
Proposed Changes
Risk Management proposes to reach the 24% reduction in fiscal year 2017 through a
combination of Personnel and Maintenance and Operation (M&O) reductions.
Personnel: elimination of 1.0 Office Assistant for an estimated savings of $51,001.
M&O: a $598,388 reduction in funding to various accounts.
Program Impacts
Personnel
Risk Management is composed of 1.0 Office Assistant and a part-time Risk Management
consultant. The consultant Risk Manager is on site approximately twelve hours per week to
attend meetings, respond to inquiries and process claims. The 1.0 Office Assistant is the only
full-time position associated with the Risk Management Program. Duties include responding to
less complex inquiries in the absence of the Risk Manager, processing and coordinating forms
and other documentation associated with claims, and processing payments. With the elimination
of the Office Assistant, there will no staff coverage of Risk Management for 70% of each work
week, resulting in significantly diminished customer service and protracted response times.
Risk Management is legally mandated to reject to reject improper liability claims within a
specified timeframe. Reduced staffing will make it difficult to do so which may result in the City
paying claims that are not warranted.
Maintenance and Operation
The most significant M&O impact is the reduction of funding to the Liability Claims Costs and
Workers' Compensation Claims Cost accounts. Annually, Liability Claims is realizing an
average savings of approximately $50,000; while Workers' Compensation Claims is averaging
an overage of $50,000 to $100,000 (adjusted via transfers between Risk Management accounts —
typically pulling from Liability to Workers' Compensation). As such, the proposed budgetary
reduction would necessitate drawing down from reserves Maintenance of Liability and Workers'
Compensation reserves are mandated by City Council Policy 201 to fund catastrophic
occurrences.
Three Year Operating Plan — Risk Management
Page 2 of 3
Attachment C
Summary
Total projected Savings: $649,419
Personnel Reductions- Dollar and % Savings: $51,001 (1.88%)
FTE Reductions:
Position Title FTE Count
Office Assistant
Total
1.0
1.0
M & 0 Reductions- $598,418 (22.12%)
Account Savings
Professional Services $110,000
Training $ 100
Contract Services $ 440
Liability Claims Cost $100,000
Workers' Compensation
Claims Cost $387,878
Total $598,418
Major community impacts:
Three Year Operating Plan — Risk Management
Page 3 of 3
Attachment D
CALIFORNIA
NATIONAL CITan�
ZNCORPORATEI3
To: Hon. Ron Morrison, Mayor National City &
Members of the City Council
From: Proposition D Independent Evaluation Committee
Date: November 10, 2011
Re: Report and Recommendation on Proposition D
The Proposition D Independent Evaluation Committee was asked to evaluate and offer a
recommendation as to whether the sales tax increase allowed by the passage of the Proposition
shall remain in effect at the rate of one percent, or whether the City Council should reduce or
terminate the imposition of the tax.
The committee began its work on September 22, 2011, and concluded its evaluation on
November 3, 2011. Committee members met four times in sessions noticed and open to the
public. The evaluation, findings and recommendation from the committee's work is shown in the
attached report. The members of the three person evaluation committee included: Chair, Marney
Cox, Chief Economist, San Diego Association of Governments; Chris Cate, Vice -President, San
Diego County Taxpayers Association; and Dale Nielsen, Finance Manager, City of Vista.
The committee members would like to thank the National City staff members that assisted the
committee with its work; making themselves available to answer inquiries and immediately
responding to the committee's request for additional information.
The committee will present its findings during the November 15, 2011 Council meeting.
Attachment D
Report from the Proposition D Independent Evaluation Committee
Introduction and Recommendation
On June 6, 2006, National City voters passed a one percent District Sales Tax. The measure,
known as Proposition D, requires that "every five years the Mayor, with approval of the City
Council, shall appoint an independent committee" with experience and expertise in municipal
finance to evaluate and offer a recommendation as to whether the sales tax increase allowed by
the passage of the Proposition shall remain in effect at the rate of one percent, or whether the
City Council should reduce or terminate the imposition of the tax. The tax will sunset in 2016.
The committee began its work on September 22, 2011. The City staff provided committee
members with copies of the City's Annual Budget (FY 2006 through FY 2011) and the
Comprehensive Annual Finance Report (FY 2006 through FY 2010, the latest available). In
addition, specific data or information requests from the committee were handled by staff. The
committee is expected to conclude its work on November 3, 2011 with the completion of this
report and recommendation to the Mayor and City Council.
During the first meeting the committee received a presentation from the City Manager, Mr. Chris
Zapata, focusing on the City's General Fund finances and the impact of revenues from the
District Tax (Proposition D). The City Manager indicated that prior to the passage of the District
Tax, the City projected a structural deficit of $4 million for fiscal year 2004-2005; the 2005-2006
budget was out of balance by $6.7 million with reserves and other one-time funds used to fill the
gap. With the passage of the Proposition D in fiscal year 2006-2007, the City began to close its
deficit through a combination of the District Tax and a variety of internal efficiencies and cost
savings measures. In recent years, these efforts have been hampered by the national economic
downturn.
The root cause of the General Fund deficit stems from three factors: rising General Fund budget
expenditure commitments beginning in fiscal year 2004-2005; the fall in sales tax revenue due to
the effects of the Great Recession; and finally revenue that the state of California has reduced or
taken away from local governments, including National City, to help cover its own budget
deficits. Clearly, two of these factors are beyond the control of the City, yet the Council and staff
must deal with their impacts.
Through a combination of actions, discussed in the three sections of the report below, the City
has been able to balance the General Fund budget each year, but the deficit is structural,
returning the next year because revenues are insufficient to cover expenses. Worse yet, the City's
five year budget forecast show these deficits will persist through 2016. In other words, the City is
not expecting to solve the structural deficit problem, although, thanks to revenue from the
District Tax and actions taken to reduce General Fund expenditures, the City does expect to keep
the deficit from spiraling out of control. However, when Proposition D expires in 2016 the sales
tax revenue it has been contributing goes away, at which time the general fund deficit would
balloon by its expected value, estimated to be $9.5 million.
Thus, despite city residents approving Proposition D and the specific actions taken to reduce or
control expenditures, City budgets continue to experience structural deficits that have ranged
between $3 million and $7 million. Each year the City has been able to close the budget deficit
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 2
through one time funding transfers, reductions in department expenditures, not filling vacant
positions and employing contingency reserves.
For these reasons, it is the RECOMMENDATION of the Proposition D Independent Evaluation
Committee that the Mayor and City Council keep the District Tax in effect at the full rate of one
percent.
Section 1: National City General Fund Financial Condition — Then and Now
As National City prepared its annual budget for Fiscal Year 2004/05, a $4 million structural
deficit in the General Fund was projected. As with other California cities, National City faced
continual threat from Sacramento as the State tried to balance its budget. Unfortunately history
has taught us that the State seems to view City revenues as a viable source to balance its own
budget. Also facing National City, as well as all other California cities, is the fact that the ability
for a city to raise revenues is very limited due to the California Constitution and various ballot
measures that have been passed by the California voters over the years.
When a city's general fund is facing a projected budget deficit, there are really only three
choices: 1) Revenues can be increased, 2) Expenditures can be reduced, or 3) A combination of
the first two. In most cases a city's only real choice is to reduce expenditures. Enhancement of
revenues is very difficult and for the most part it is usually due to natural revenue growth, which
generally occurs slowly, or from economic development programs which, in some cases, can
take many years to see results.
In National City's case, Proposition "D" was passed by 59% of voters on June 6, 2006. It was
passed as a general tax and therefore could be used for any general fund purpose that the City
Council deemed appropriate. This 1% addition to the general sales tax rate was put into place for
a period of up to ten years. This would allow the City to address the structural deficit and
provide adequate time to develop and implement a strategic plan to eliminate the structural
deficit. Per the ballot measure "The authority to levy the tax imposed by Proposition "D" would
expire ten years from the Operative Date, unless the City Council prior to that date determines
that the levy and collection of the tax is no longer necessary, in which case the City Council has
the authority to reduce the rate of tax, or terminate the imposition of the tax".
Is the collection of the tax no longer necessary? In order to answer that question a review of the
financial conditions of the General Fund over the time since Proposition "D" was passed is
needed. For the Fiscal Year ended June 30, 2006, National City had total General Fund revenues
of $30,926,229 and total expenditures of $32,768,401 resulting in a deficiency for the year in the
amount of $1,842,172. The table below provides audited revenue information from the 2006
year through 2010.
Revenues
Taxes
Licenses & permits
Fines & forfeitures
Interest & rents
Intergovernmental
Charges for services
Other revenue
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 3
Year Ended June 30,
2006
$ 25, 627, 904
$ 874,854
$ 1,003,262
$ 1,088,901
$ 1,131,714
$ 925,769
$ 273,825
$ 30, 926, 229
2007
$ 31, 375,184
$ 859,430
$ 783,056
$ 2,056,097
$ 1,259,455
$ 1,318,470
$ 430,423
$ 38, 082,115
2008
$ 33, 638, 924
$ 799,452
$ 1,084,647
$ 2,168, 962
$ 802,557
$ 414,298
$ 152,148
$ 39, 060, 988
2009
$ 31, 230, 431
$ 723,913
$ 1,137,181
$ 1,488,925
$ 663,436
$ 564,347
$ 380,627
$ 36,188, 860
2010
$ 29, 007, 351
$ 551,517
$ 1,219,418
$ 432,226
$ 571,308
$ 482,975
$ 593,968
$ 32, 858, 763
As the above table shows, General Fund revenues took a significant upturn in the year ended
2007. It is clear that the majority of the increased revenues from 2006 to 2007 are in the area of
taxes, and most of this is from the implementation of the Proposition "D" sales tax. By 2008 tax
revenues had increased to $33.6 million, with the City's traditional 1% tax of $11.8 million,
combined with the Proposition "D" tax of $8.5 million, providing $20.3 million of the total sales
tax revenues. As of 2008, total general fund revenues had reached $39 million. We all know
what happened next, the recession and housing crisis. Both sales tax and property tax, the
mainstays of most California cities, dropped. The Federal Reserve in order to stimulate the
economy started reducing interest rates in order to jump-start the economy. Investment income
dropped at an alarming rate. By 2009 General Fund revenues were down to $36.2 million, and
by 2010 they had dropped to $32.9 million, only about $2 million more than in 2006.
It should be noted that in 2010, the traditional 1% sales tax combined with the Proposition "D"
sales tax totaled approximately $16.6 million, while in 2004 the City's traditional 1% sales tax
alone was $16.5 million. The recession had taken its toll and the now combined sales taxes have
barely managed to replace just the traditional sales tax revenue when it was at its highs. It is
difficult to imagine what reductions National City would have had to make these last four years
had Proposition "D" not been in place.
What has happened on the expenditure side over the same time period? The table below
provides audited expenditure numbers over the same 5-year period.
Year Ended June 30,
Expenditures 2006
Current:
General Government
Public safety
Transportation
Community development
Culture & leisure
Capital outlay
Debt service:
Principal
Interest & fiscal charges
2007 2008 2009
$ 3,733,413 $ 3,023,335
$ 23,688,513 $ 23,740,549
$ 2,662,781 $ 2,592,419
$ 727,936 $ 754,339
$ 1,363,291 $ 1,340,716
$ 417,755 $ 26,793
$ 113,186 $ 201,600
$ 61,526 $ 61,705
$ 32,768,401 $ 31,741,456
$ 3,215,981
$ 25,393,406
$ 2,678,673
$ 1,128,843
$ 1,527,397
$ 364,946
$ 196,709
$ 66,596
$ 34,572,551
$ 3,931,370
$ 26,673,528
$ 2,726,801
$ 26,934
$ 2,086,779
$ 1,013,344
$ 214,837
$ 57,481
$ 36,731,074
2010
$ 4,578,197
$ 28,402,451
$ 1,777,073
$
$ 1,828,785
$ 301,404
$ 261,174
$ 23,962
$ 37,173,046
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 4
The above table shows that over the five years presented, expenditures have gone from $32.8
million in 2006 to $37.2 million in 2010, an increase of $4.4 million. While most areas shown
have had somewhat marginal increases and decreases, the area of public safety has grown $4.7
million over the time frame presented, thereby indicating that, overall, all of the net expenditure
growth is in this area. Analysis of the audited financial statements indicates that the PERS
Safety contribution rates between 2007 and 2010 varied from 26.870% to 28.806% and covered
public safety payrolls have increased from $8.8 million in 2006 to $11.3 million in 2009. As of
2010, Public Safety expenditures account for 86.4% of the use of total General Fund revenues.
The City appears to continue to look for cost savings measures, such as increasing employee
contribution towards retirement and implementing a two -tiered retirement benefit program.
So is National City's General Fund in a financial position that it could tolerate a reduction or
elimination of the Proposition "D" sales tax? From a purely financial aspect, this writer would
say no. In 2010 expenditures exceeded revenues and the weakened economy continues to have
negative impacts on the City's mainstay revenues of property and sales taxes. The largest
challenge that 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.
Section 2: Financial Trends & Outlook
$45,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
so
National City General Fund Inflows and Outflows FY 1999 - FY 2010
1999 2000 2001 2002
2003
2004 2005
2006 2007 2008 2009
Source: FY 1999 - FY 2010 CAFRs; In 2010 Dollars
�IRevenue a Transfers In •IExpenditure Transfers Out
2010
Between Fiscal
Year (FY) 1999
and FY 2010,
general fund
expenditures for
the City of
National City
have exceeded
revenues in six
of those twelve
years. The City
has recently
experienced
years in which
revenues
declined from
the prior year,
but did not
experience a similar reduction in expenditures. In four of the past twelve fiscal years,
expenditures have been reduced over prior year totals. In general, total general fund
expenditures have increased by an average of 5%
Over the last two years as expenditures have surpassed revenues, the City has also experienced a
decline in budgetary reserves. In FY 2010, the total fund balance for the general fund declined
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 5
from $18.4 million to $11.8 million. The City's Comprehensive Annual Financial Report for
2010 shows that the decline in budgetary reserves was due to a number actions, including the use
of reserves available at the end of fiscal year 2009 to help balance the 2010 budget by covering
the 2010 general fund deficit.
As mentioned previously,
public safety expenditures
accounts for a large
portion of the City's
budget. Since FY 1999,
the percentage of the
budget spent on public
safety services has
increased from 71 % to
78% as of FY 2010.
Overall, staffing levels
for the City have
increased since FY 2003,
but dropped by 1.5%
from FY 2009 to FY
2010. One way to
evaluate compensation of
cities is by reviewing
actuarial valuation reports from the California Public Employees Retirement System (Ca1PERS).
Based on information submitted to Ca1PERS by the City for the period between FY 2006 and FY
2009, the average payroll per employee has increased from $51,585 to $54,671 for non-public
safety employees, and increased from $73,292 to $86,679 for public safety employees (not
adjusted for inflation).
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
s-
National City Pension Costs FY 1999 - FY 2010
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: FY 1999 - FY 2010 CAFRs; In 2010 Dollars
•ARC ■ EPMC
Since FY 1999, the City
has also experienced
rising pension costs. In
an effort to combat these
rising costs, the City is
now requiring employees
to pay their share of
pension costs, as well as
implementing a second,
low -tier pension plan for
new employees. In the
past, the City has spent as
much as $1.8 million on
behalf of employees for
the "employee share" of
pension costs, also
National City Governmental Expenditures by Category FY 1999 - FY 2010
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: FY 1999 - FY 2010 CAFRs; In 2010 Dollars
• General Government • Public Safety ■Transportation ■ Comm unity Development ■ Culture and Leisure
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 6
referred to as EPMC (Employer Paid Member Contribution). Requiring employees to pay for
their share of pension costs provides immediate savings to the City. Unfortunately, due to
accounting methods on behalf of CaIPERS, all cities enrolled with CaIPERS may continue to see
increases in pension costs as they continue to pay for past investment losses. It is expected
pension costs for the City will increase by approximately 17% between FY 2011 and FY 2012,
from $5.4 million to $6.3 million.
The City provides a stipend towards the cost of retiree health care for employees that are eligible
to receive pension benefits and with at least 20 years of service. The City pays for this benefit on
a pay-as-you-go basis, meaning only the cost of providing the benefit for retirees is paid by the
City each year; funding of the benefit for current employees is not being set aside. While the
cost of paying this benefit for retired employees amounts to less than $100,000 each year, the
City's unfunded liability for this benefit will continue to increase if funding is not provided for
current employees that may be eligible to receive the benefit.
Based on projections developed by the City, a deficit is expected each year between FY 2012
and FY 2016, with a projected deficit of $10.9 million for FY 2016. The Proposition D sales tax
increase is scheduled to expire in FY 2016. Between FY 2008 and FY 2011, the City's sales tax
increase has generated an average of $8.15 million each year. By FY 2016, the City's sales tax
could account for nearly $9.5 million of the projected deficit. Voters within National City on
two occasions approved a ten year sales tax increase, and thus the tax should continue. In the
interim, the City will need to continue to introduce reform and efficiency measures to limit
growth in expenditures and reduce reliance on the City's additional sales tax revenue. Finally, in
order to correctly calculate the City's structural budget deficit, it is important to include the costs
of fully funding the City's retiree health care benefits as well as understanding the true costs of
maintaining the City's infrastructure (roads, sidewalks, facilities, etc.) each year.
Section 3: Actions Taken to Improve and/or Stabilize the General Fund
Through a variety of actions the City has been able to balance its annual budget each year since
the General Fund deficit problem first appeared during Fiscal Year 2004-2005 and maintain the
City and the redevelopment agency Standard and Poor's ratings of A and A minus, respectively.
The most effective actions fall into two general areas, revenue increases and controlling
expenditures, which are summarized below. For a fuller appreciation of the actions taken by the
City please refer to the City Manager's Budget Message at the front of City's Annual Budget and
to the Annual Budget presentations available on the City's web site.
Although the lists below are not comprehensive, the selected actions provide a sampling of the
range and magnitude of the actions taken to adequately confront and prevent the structural deficit
challenge from spiraling out of control. It seems clear that despite all of the actions taken to close
the City's recurring structural deficit it would spiral out of control without the revenues
temporarily being provided by the District Tax. For this reason the District Tax should remain in
effect.
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 7
Actions Taken to Increase General Fund Revenue.
• 2006-- Proposition D passed by 59 percent of the voters on June 6, 2006; the measure
increased the local sales tax rate one percent to 8.75 percent from 7.75 percent for a
period of up to 10 years. The City estimated that the additional revenue from the sales tax
rate increase would generate between $7 million and $9 million annually, and to date the
annual collections have been within this range. Cumulatively the City has collected
approximately $30.4 million through fiscal year 2010.
• Marina Gateway Development —since 2010 the project has provided approximately
$772,000 annually in redevelopment and municipal tax revenue. The City invested
(contributed) $2.4 million in property tax increment funds to the $61 million
development.
• Plaza Bonita Mall--$134 million expansion and improvements should lead to additional
sales tax revenue.
• 2010—increased American Medical Response franchise fee by $120,000.
• 2008—internal audit of federal Housing and Urban Development Program resulted in
approximately $3.3 million in recouped program income.
Actions Taken to Control General Fund Expenditures.
Accounting
• Quarterly written financial reports to the City Council and residents of National City
provide data on the revenues generated by the District Sales Tax separate from the City's
general sales tax to increase accountability.
Cost -Cutting
• 2006--reduced expenditures for City services by 20 percent across the board, saving
$984,000 and a managed attrition program was instituted affecting General Fund
positions in 13 departments.
• Since 2006 the city has provided employees with one-time stipends rather than salary
increases. Annual non -pensionable stipends provide a way to limit and control ongoing
salary impacts to the City's budget. Cost of living adjustments are scheduled to begin in
2012 as required in labor contracts.
• 2009--the City unblended retiree health care from active employees resulting in no cost
increases in benefits for that year.
• 2010--the City implemented a 40 hour Employee Work Furlough Program resulting in an
estimated $135,441 savings in salary and approximately $12,000 in energy savings. In
2011 the City negotiated a continuance of the furlough program through 2013 which is
expected to result in $338,383 in savings over the three years.
Consolidating and Restructuring Departments and Divisions
• 2006— the redevelopment agency was placed under the City Manager resulting in the
elimination of managerial positions.
Attachment D
Report from the Proposition D Independent Evaluation Committee
Page 8
• 2008—the Building and Planning Departments were merged, eliminating a department
director position.
• 2009—the Purchasing Division was consolidated into the Finance Department
eliminating a managerial position.
• 2009—the recently merged Building and Planning Department was further consolidated
with the Engineering Department, eliminating a department director position.
• 2011—overall, the City has streamlined its organizational structure from eleven to five
departments, eliminating 20 executive and management level positions.
Managed Attrition
• 2009—the City introduced the Employee Voluntary Separation Program resulting in the
separation of 29 employees.
• 2011—the City reports 71 vacant positions, 61 of these positions are frozen and/or
unfunded and 10 are vacant.
Pension Reform
• 2007—no City employee contributed to their retirement.
• 2009-89 percent of City employees contributed to their retirement.
• 2010-100 percent of City employees contributed to their retirement, and new sworn
police safety positions retirement formula decreases from 3% @ 50 to 3% @ 55.
• 2011—employee retirement contributions from elected officials, executive, management
and municipal employees are increased to the full 8%. Fire safety employees agree to
contribute their full 9% in 3% increments by 2013. New fire safety employees will
receive a reduced retirement formula from 3% @ 50 to 3% @ 55.
Attachment: Proposition D Ballot Initiative
r.
Attachment D
CITY OF NATIONAL CITY
Proposition D
(This proposition will appear an the ballot in the following form.)
PROP D
Shall an ordinance be approved imposing a one
percent transactions and use lax (a sales lax) for up
to 10 years for City services, facilities and
programs?
This proposition requires approval by a simple majority (over 50%) of the voters.
Felt text of this proposition
follows the arguments.
GIT Y ATTORNEY IMPARTIAL ANALYSIS
Ballot Proposition 'D" proposeslo raise revenue for general purposes tor the City of National City
by authorizing a one pereerit.transaction and use lax (commonly referred to as a 'sales tax')
within the City of Nattbnal City. The' one percent lax would be patd'in addition td current sales
taxes and would be collected at the same lime•and in the same manner as existing sales taxes.
California Revenue and Taxation Code Section 7285.9 authorizes- the City Council to levy a
transaction and. use tax at a rate of 0.25 percent or a multiple. thereof. provided •the. tax is
approved by a majority of the voters voting In an election on that issue. If approved. the fax would
go into effect October 1, 2006 (the 'Operative Dale').
Proposition 'b' states that the one percent sales tax is to be used 'for City cervices. facilities and
programs' Because this sales lax would beta 'general tax,' the lax would. go Into the City's
general fund and could be .used for any legal municipal purpose, The City would not be tega r
bound. in any way to use •the tax monies for any spehial purpose or -for any particular services,
facitttes or programs.
The authority to tavy the tax- Imposed by Proposition 'D' would expire ten years from the
Operative Date, unless the City Council prior to that dale determines thal the levy and collection
of the tax Is no longer necessary, in which'case the City Council has the authority to reduce the
rate of fax, or terminate the Imposition of the fax:
Proposition 'D. provides Thal every five years the Mayor, with the approval of the City Council,
shall appoint oh independent committee coinprised of three experts in Mendel matters, who will
sport their recothrhendation to the Mayor arxi Clty Council as to whether the transaction and use .
fax should remain to effect at the rale of one percent. or whether the City Council should reduce
the rate of tax or terminate the Imposition of the tax.
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Attachment D
ARGUMENT IN FAVOR OF PROPOSMON D
• Proposition "0" is to raise the sales tax to cover the City General Fund $6-7 million shortfall
• Eery resident from senior citizens, students to infants would•be. affected by the outcome of
This proposition
• The sales tax will automatically expire in ten years
• National City residents have contlnnuualty staled that public safety is their number I1 priority
• 72% of the total National City General Fund budget is given to the poke and fire department
WHY YOU SHOULD VOTE "YES" ON
• If Proposition'L3" does not pass the toftowing wit happen;
•
• The City will be'required to reduce their general fund budget by 20%
• The Police. Department and Fire Department will be required to terminate employees le
reach the 20% cut •
• `Fete Fire Department will not be able to adequately man the Euclid Street Rre Station
• The response time by the Police and Fins `Department will be greatly reduced
■ The new Public Library wiR be required to terminate employees and be -forced to close mote
days
WHAT ISTAXED'AND WHAT IS NOT TAXED
No lea on medicine, non -prepared food (groceries). rent. riartgage, utilities or property lax
Per State Law no new tax on car. mo1oroycfe, boat or ptane sales made to consumers from
outside the pity, but residents pay
• Car dealerships win pay taxes on all vehlcte repair and parts sold
• NATIONAL CITY RE,SIDEN1S WILL NOT BE REQUIRED TO COVER 100% OF SHORTFALL
• Projections show that one-half to Iwo thirds of the tax will be pall by non -National guy
residents who purchase merchandise in Me Cdy
WHY THE SHORTFALL
• The State 4t Callforria keeps millions of dollars Lin revenue.{ta help balance their budget)
that shouki be returned to the City
• Larger mandatory employee pension contribution than expected
ROBERT "DUICIE"VALDERRAMA
Port Commissioner
• ANNE CAMPBELL
Cdy#Jlxaden
•
09J0-2
ADOLFO GONZALES
Chief of Polies
ROBERT` Y_ MEDINA
President. National CAy
Firefighters Association
ROSALIE'ROSIE" ALVERADO
President, National School District
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Attachment D
ARGUMENT AGAINST PROPOSITION•D
What?! Another tax increase?
We've alreadvvoted down this lax once before. But the politicians wont lrsten.
They're Trying AGAIN to raise taxes. and Ihis lime. we're being told that essential police and fire
services may be cull But were ALREADY paying for public safety!
•
In 1993 we voters. approved Prop: 172, a sales tax for pubic safety funding. According to the
Union-Tribtme. National Lily collects about $7.75 M1LUON annually in sales lax for 'local public
Safety protection and improvement.` Where's THAT money. now that we need it??
Much of this regressive lax will fait on the backs of our poorer utizens. That's unfair!
If This lax passes, National City will charge the highest safes lax In the county. To avoid this tax,
National City citizens wit lend b buy goods outside their own city, and county consumers wil
lend to avoid National City as a place to shop or visit. That means more closed local businesses
and more Ibsl jobs.
Ciiitzzens.of National City will pay an additional one percent on any taxable item they buy locally.
But the National CRy car dealers' customers who live outside National City will NOT pay the
higher lax, due to slate law. That's unla!rt
Read the measure carefully. hough the tax hikers claim that the tax kngease wilt be used for
vital city services, there is NO LEGAL REQUIREMENT thal the money be spent that way. None!
Voters are supposed to trust National City politicians to do the right thing. And not only loday's
poRicians, but all the city politicians for the next 10 years while the tax is being collected, Bad
idea!
If you think that yourtaxes are already too high, or even just high enough, you should vote NO en
this lax increase.
Reject this taxi
www.lesslax.org►Propo
RICHARO RIDER ,
Chair, San Diego TaxFighters
EDWARD TEYSSIER
Chair. San Diego Libertarian party
MARIA RAQUEL D. ASTORGA
Working Mother
EDWARD G. LOHLEIN
Small Business Owner
MARTHASANCHEZ
4matt Business Owner
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Attachment D
.11
ORDINANCE NO. 2006 — 2278.
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY ADDING
CHAPTER 460 TO THE NATIONAL CITY MUNICIPAL CODE
TO IMPOSE A TRANSACTIONS AND USE TAX TO BE
ADMINISTERED BY THE STATE BOARD OF EQUALIZATION
BE IT ORDAINED by the People of the City of National City as follows:
Section 1. That Title 4 of the National City Municipal Code is hereby amended by
adding Chapter 4.60 to read as follows:
Chapter 4.60
TRANSACTIONS AND USE TAX
Sections:
4.60.0'10• Title
4.60.020 Definitions
4.60.030 Operative.date
4.60.040 Purpose
4.60.050 Contract with State Board of Equalization
4.60.060 Transactions tax rate
4.66.070 Place of sate
4:60.060 Use tax rale
4.60.090 Adoption of provisions of state law
4.60.100 limitations on adoption of State law and collection o1 use taxes
4.60.110 Permitnot required
4-60.120 Exclusion; exemptions
4.60.130 Pemuisstbie uses
4.60.140 Amandrr>ents
4.60.1501 n ok g cotlect'iont forbidden
4.60.160 Severabiliily
4.60.170 Expiration
4.60.160 Independent committee
4.60.010 Title. This chapter chart be known as the "may of National City Tiansactions
and Use Tax Ordlitanee". This of trance shall be applicable in the incorporated gory of City.
4.60.020 . Definition's. As used .k this chapter. 'City" means the CRY of National City
and 'lax'. means Itie transactions and use taxes, tOmeTunes also referred to as 'sales Mx;
imposed tntdet the .proVislbns of this ordinance; lax, revenue and 'tax revenues • mean act
proceeds of Me tax rr 01ved by the City from the State Board of Equation.
4.60.0C . Ooetatve dale. Operative dale" means the first •day. Thal the tax is imposed
end collected. The operative dale shalt be October 1. 2006, unless a later operative date
becdtnes effective under the provisions of Section 4.60.050.
4.60;040 Purtiose. This orrfiranCe. is adopted la achieve the iogkwing, among other
purposes. and directs that .the provisions hereol be interpreted in order to aacotnp6sh those
purposes:
A. To impose a teiaEl'transactionsand use.tax in accordance with the provisiaru of Part
1.6 (rommencing with Section 7251) of Division 2 o1 the Revenue arid Taxation Code and Section
7265.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance ruhicb shall
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be operative it a majority: vote al the electors voting on the measure vole to approve the
Impesiticn of the lax at an election called for that purpose.
B. To adopt a retail transactions 'and use tax ordinance that incorporates provisions
identical 'to those of the Sales and Use Tax Law of the State of California insofar as those
provisions are not inconsistent with: the requirements and limitations contained in Part 1.6 of
Division 2 of the ilevenue and Taxation Code.
C. To adopt a retail transactions and use lax ordinance that imposes a lax end provides
a measure therefore that can be administered -and collected by the Stalettearclof Equalization in
a manner that adapts -itself as fully ae practicable. to, and requires the least possi6le•deviatfon
from. the existing statutory and administrative procedures followed by' the -State Board' of
Equalization in administering and collecting the California SlateSaies and Use Taxes.
D. To adopt a retasi transactions' and use lax ordinance that can be administered in a
manner that will be, to the greatest degree possr'bte, consistent with the provisions -of Part-1.6 of
Division 2 of the Revenue. and Taxation Code, minimize the cost of collecting the transactions and
use taxes, and al the same time, minimize the burden of record keeping upon persons subject Io
taxation under the provisions of this ordinance. .
4.60.050' Contract with Slate Board of Edruaiizatiorl. Prior to the operative dale, the
City shalt centred with the State Board of Equarexaticn to perform aft functions incident he the
administration and operation 0, this transactions and use tax -ordinance; provided. That if the Cpp
shaft not have contracted with the Slate Board of Equalization prior to the operative date; it shalt
•nevertheless so contract and in such, a case the operative date shag be the lirst day of the first
catender quaiter-foltowing the execution of such a contract.
4,60.060' • Transactions lax rate. For the privilege ol-sefing tangible persohal property
at retail, a tax is hereby imposed upon all retar1ers In thelncorporated tenilory. of the City al the
rate of 1% {one percent)'of the gross receipts of any retatier-horn the sate of all tangible personal
-properly sold al retalt In said lerrlloryon and after the operative dated this ordinance.
4.62,070 Place of safe. For the purposes of this ordinance, alt retail sales are
consummated at the -place of business of the retailer unless the tangible personal property sold Is
delivered by the retailer or his agent- to an otit-cif-Slate des6na1kSn or to a common carrier for
delivery to an out -of -stale destination. The gross receipts from stich sates shall Incktde delivery
charges. when such chargesare subject to the slate sales and use taxi regardtess'of the place to
which delivery is shade. In the event a retailer has no permanent place of business lathe Slate or
has more than one -place of business. the place or places al which the retail sales' ate
consummated -shall be determined under rotes and regulations to be preserlbed and adoptsd by •
the State Board of E4uatizalton.
4.60.080 Use lax rate. An excise tax• is hereby imposed on the Storage. use or.other
consumption In.the City of tangible personal property purchased from any retailer an and after the
operative date of this ordinance for storage, use or other consltmption in said territory al the rate
.'of 1% (one. percent) of the sales price of. the properly. The sales price Shall include delivery
charges when such Charges are subject to' stale sales or use lax regardless of th_a place !owlish
delivery is made.
•
4.60.090 Adootion oil provisions of staleJw. Except as 'otherwise provided in Ibis'
ordnance and except insofar as they are ineonsislenf with -the provisions of Part 1.B•of pivision:2
of the Revenue and Texatton Cade, all el tie provisions of Part 1 (commencing with Section
6001) of Division 2 of the f;evenire-and Taxatioh-Cade. are hereby adopted' and made. e.part of
lhts ordinance as though fully set forth herein.
4.60.160 , limitations on adoption (*state law and coilecgoti of Arse taxes. In adopting
the provisiona ritPart 'Vol Divashn2o1'the•Flevenueand•TaxationCode:
A. Wherever the.State of California is named dr referred to as -the lazing agency, the
name. of tilts City shall be substhuled therefor. However, the:Substitution shalt riot be made when:
1. The word 'State is used as a .part Of the title of the 'State Controller, State
Treasurer, Stale Board of Control, State'Board of Ec ua(zation, State Treasury, or the Constitution
of the State of California;
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2. The result of that substitution would require action to be taken by or against .this
City or any agency, officer; or employee whereof rather elan by of against the State Hoard of
Equalization. in performing the• functions incident• to the •edminislraliou or operation of this
Ordinance.. - .
3.. In those sections. inciuding, but not necessarily Grnited to sections referring to the
extertor•boundaries of the State of Caffomia, where the result of the substitution would be !o:
• a. Provide an exemption from this --tax with respect to censer sales, storage. use
or other consumption of tanerbfa pis properly .wh ch wotdd not otherwise be exempt front,
this tax while such sales, storage; use or 'ether consumption remain subject Id tax lee the State
under the provisions of Part 1 of Division 2 opt tie J1everster and Taxation Code, 0r7.'
b. Impose this tax with. respect to certain. safes, storage, use or ether
consumption of tangible personal property which would not be subject to tax by the slate urider
the said provision Of that code. . .
• 4. 1n Sections 6701, 6762.(exeepl in the last sentence thereof); 6711, 6715, 6737.
6797 or 6828 of the Revenue and Taxation Code. - •
- B. The wok( 'City* shall be substituted for the word'Stale' in the phrase `retailer eogaged
in business in this Slate In Section 6203 and in the detnitionof-that phrase in Section 6203_
• 4.60.110 Permli not reentered: If -a sellers perririt has been tsstxed to a- reta3er under
Section 6067 of the jieyenue and Taxation Code. an adrdtional Irarhsactor+s permit shall not be
required by tftis ordinance: '
4.60.120 Exctuslort exreno ons.
A. There shalt be -Occluded truth the measure of the.transactions tax and the use tax the
amount al any. sales lax or use.tax Apposed by the State of Catiifornia or by' any city, any and
'county, or county. pursuant to the BradleyBarns Uniform Local Sates and Use Tax Law or the
-amount of any stale -administered transactions or use lax.
8. There are.exetnpted from the computation of the amount of transactions tax the gross
receipts Irom:
1. Sales of tangible persoriat property, other than fuel of petroleum products, to
operators of aircraft to be used or gahsumed principally Outside lhe•eounty fn which the sale;ts
Made and.dlredy andexdus(veyri-tte Use of such await as coronae carriers of:persons ar
property Crider the auttonly of the. laws •of this State, bit United States, Or any €crefgn
governs -nerd, ' -
2. Sales of propestyr-lo be used Outside the t ''which is shipped 10- point outside
the City, pursuant to the contract of salt, by *livery to such point by the retarier or his agent, or
by delivery by -the retaipr to a carrier for ahlpineni tea consignee al such point For the purposes
of this paragraph,. delivery to a point hide the City Shag be satisfied
• a. yob respect la vehicles .(Dither than oomrrcial vethtcles) .subject to
registration purtugrrl io Chapter 1-(coesnendne with Section- 4000) of division 3; of the Vehicle
Code; airman licensed In ,ccmpaance•with Seaton• 21411 of the.Publio Undies' Code, and.
undocumented vessels registered ('alder t*l01on 3.5 (commenting web Section 9840) of the
Vehicle Code by registration. to an out-ofCity address•end by.a dee/aratiori under penally oef
Perjury, signed by the boyar, stating that euc h address Is, in fact. his or her principal place of
residence; and
b.. With respect to commercial vehicles, by registration to a place of business
out -of -city and declaration wilder penalty of pe juy, sigma bythe buyer, that t1e vehicle Will be
operated from' that address.. • -
-3. The sale of tangible persb+lal•proppriy i:the seller le:obligated to furnilit the
property fore fixed price pursuate to a contract entered into prior to the operative Bete of ibis
ordinance. -
4. A lease"of tangelo personal properly which is a -continuing select such property,
Ior any period Of lime for Which the lessor is °Mated to lease the property loran amount fix$d by
the tease.prlor to the pperatve dale of this ardrta&e.
5 Per ihe•purposes of subparagraphs 3 and 4 of this. subsection l3; the safe or. lease
of tangible personal property shall- be. deemed not to be ob&gatedfpursuant I0 a contract or lease
for any period of time for which any party to the contract« lease has the trneorxctiortat right to
terminate the contract or lease upon nonce. Whether or not Suds right is exercised_ -
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C_ There are exempted from the use tax imposed by this ordinance, the storage, use or
other consumption in this City of tangble personal property:
1. The gross receipts from the sale of which have been subject to a transactions tax
under any slate -administered transactions and use tax ordinance.
2:. Other than fuel or pefroteum products purchased by operators of aircraft and used
or consumed by such operators. directly and exclusively. in the use of such: aircraft as common
carriers, of persons or properly for hirer compensation under a certificate of pubk convenience
and necessity issued pursuant to the laws of this. State, the United Slates, or any Ioreign
govemtnenl. This excerption is in.addition to the exemptions provided in Sections'6366 and
6368.1 of The Revenue and Taxation Code of the State pf Cafdoinia
• '3. If the purchaser is obi gated to pgcefrase the piopeity fora ruled price -pursuant to.
a contract enteredinlo prior to the operative date of This ordinance.
4. If the possession of, or the exercise of any right or power over, the tangible
personat properly arises under a lease which is a conlinetrig.purchase of such.prepenty ter any
period of time for which the lessee is obligated 10 lease the property for an amount fixed by a
lease prior to the operative date of this ordnance.
5.. For the purposes of subparagraphs 3 and Oar this subsection C, storage, use, or
4 other consumption,.or.pos.session of, or exercise of any right or power over, tangible personal
propertyshalt be deemed not to be obigaled pursuant to a contract or lease for any period -et nine
for which any party 10 the contract or lease has the unconditional right to terminate the contract or
lease upon notice, whether or not such•righl is exercised.
6. Except as provided in subparagraph 7 of.this subsection C, a retailer engaged in
. business. In 'the City shall not be required to collect use tax from the purchaser' of tangible
personal property, unless the retaier ships or delvers the properly into the City or participates
within lice at in malting the sale of the property, inciurkng, but pot limited lo,..Soticiling or
receiving the order, either directly or iridlreefly, at a place of business of the retailer lathe City or
through.any representative, agent, canvasser, so1citor, substdaty, or person in the City under the
authority of the retailer. -
7. 'A retailer engaged in business in the City' shalt also include any retailer of any of
the following: vehicles subject to eeeistratlon pursuant to Chapter 1 (commencing with Seciion-
4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section.21411 of the
Pubk Utilities Code, or undocumented vessels registered under Division 3.5 (eorrcmeneing with
Section 9840) of the Vehicle Code. That reta/lei shalt be .required to collect use tax from any
purchaser who registers or licenses the vehicle, vessel, or aircraft at an addreseln the City-
. D. Any person subject to use .tax under Ibis ordnance may credit 'against that taxi any
transaction; tax or reimbursement for transactions.1ex paid to a t[Strict iirrposiing, or retailer labia
for a •transactions tax pursuant to. Pail 1.6 of Division 2 of the Revenue and •Taxalfon Code with
respect to the sate to the person of the property the storage, use or oUret theileiliripliore of which is
subfeet to the use tax.
4.60.130 Permissible uses. The revenues of the lax shalt be deposited in the City's
genera! fund end may be used for any legal municipal purpose.
4.60.140 " Amendments. Alf amendments subsequent to the effective dale of this
ordinance to Part 1 of 0Wfsien 2 of the Revenue and Taxation Code relating to sales and use
taxes and which are not ineonslstent with Pan 1.6 and Part 3.7 of Division 2 of the Revenge and
Taxation Code. and al amendments to Part 1.6 and Part•1.7• of Divfsiorl 2 Ct the Revenue and
Taxation Code, shalt automatically becarne a pan of this ordnance,.provided however. that no
• such amendment shall operate sous to affacl the rate of tax imposed. by Ilk ordinance.
4.60.160 Enjoining collection forbidden. Nc-InJurofion or wait of mandate or oilier legal
or equitable process shall issue In any stilt, action or proceeding in any court against the Stale or
the City, or against arty officer of the State, or the City, to prevent or enjoin the collection under
this ordnance, or Part 1.6 Of Division 2 of the Revenue and Taxation Code, of anytax or any
amount of lax required b be collected. •
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4.60.160 Severability.. If any provision of this ordinance or the application Thereof to
any person or.circumstance is held invalid, the remainder of theord'inance and the apptication•of
such prevision to other persons or circumstances shall not be affected thereby.
4.60.170 Expiration. The authority to levy the•tax imposed by this Chapter shah expire
ten (10) years from the Operallve,Date, unless the City Council prier to that date determines that
the levy and collection.of.the tax is no tonger necessary, in which case the City Counal-has the
authority to reduce the. rate of lax, or to terminate. the imposition of the lax. The City shall
immediately notify the State Board of Equalization iri carding in the .event That the tax is reduced or
terminated. The operative date of such rate tedubtion or•.tetniination shaft be 'the first (1aj
calendar quarter commenting more than one hundred and ten (110)- days' after. the Board of
Equalization receives such notice of termination.
• 4.60.180 . .Independent convnitee. EveryFrye (5) years the Mayor, with approval of the
City Council. shall appoint en independent committee comprised of three (3) experts in financial
matter$, who will report their recommendaitions to the Mayor -and City.Ceund as to whether the
transaction and use.tax a hottldd remain to effect at the late of, one percent (1%), or whether the
Cfy Corincil should reduce the rate of tax'or tteoa[nate the ioii.oi'the tax pursuant to
Section 44.60.170.
Section 2. This ordinance., following its adoption by al least 4 affirmative votes of the
City Commit and its pubkation, shy become effective •upon the appro+'rat of the tax imposed
hereunder by a ma)ority of -the voters of the .City -voting Rhoreon at an election caied for that
purpose. The 'operative date of the tax imposed hereunder shalt be as provided in Section
4.60.030.
PASSED and ADOPTED by the City Councll'at the City of National sty, California, on
February 7.2006, by the following vote, to -wit•
Ayes: Councibmembers: Inzunza. Morrison. Natividad, Parra, 2arate,
Nays: None.
Absent: None.
Abstain: None.
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