2011 JUN 08 CC MIN SPCSPECIAL MEETING OF THE EL SEGUNDO CITY COUNCIL
Wednesday, June 8, 2011
El Segundo Public Library
111 W. Mariposa Avenue, El Segundo, CA 90245
7:30 a.m.
7:30 A.M. SESSION
CALL TO ORDER — Mayor Busch at 7:30 a.m.
ROLL CALL
Mayor Busch
- Present
Mayor Pro Tern Fisher
- Present
Council Member Brann
- Present
Council Member Fuentes
- Present
Council Member Jacobson
- Present
PUBLIC COMMUNICATIONS — (Related to Citv Business Only — 5 minute limit per person, 30
minute limit total) Individuals who have received value of $50 or more to communicate to the City
Council on behalf of another, and employees speaking on behalf of their employer, must so identify
themselves prior to addressing the City Council. Failure to do so shall be a misdemeanor and
punishable by a fine of $250. While all comments are welcome, the Brown Act does not allow
Council to take action on any item not on the agenda. The Council will respond to comments after
Public Communications is closed.
Marsha Hansen, Chamber of Commerce; spoke regarding the Downtown Committee and their
plans for inviting guests to explore the downtown area.
Chris Thomason, President El Segundo Firefighters Association, spoke against any reduction in
staffing in the Fire Department.
SPECIAL ORDERS OF BUSINESS:
Consideration and possible action regarding a strategic planning session which will guide
staff in the preparation of the Fiscal Year 2011 -2012 Preliminary Budget for all City
expenditures and revenues. Staff will present a brief overview of the estimated General
Fund Fiscal Year 2010 -2011 yearend projections, General Fund Fiscal Year 2011 -2012
budget assumptions, projected shortfall and options to balance the FY 2010 -2011 and FY
2011 -2012 General Fund Budgets.
Staff will be presenting the following items for preliminary consideration:
a. Fiscal Year 2010 -2011 Yearend projections
b. Fiscal Year 2011 -2012 Preliminary Budget
Eliminate the projected structural deficit through:
1. Staffing Reductions
a. Permanently eliminate vacant positions
b. Early retirement options for all employees
2. Salary and Benefit Reductions
3. Reduce Other Post Employment Benefits (OPEB) funding through
cost sharing
c. Five -Year Forecast
d. Economic Outlook — General Fund Revenues
i. Business License
ii. Sales Tax
iii. Property Tax
iv. TOT Tax
v. Utility Tax Revenues
vi. Investment Interest
vii. New Development
e. Revenue Growth
i. Potential increase in Developer Fee Revenue
Long -Term Policy Decisions:
i. Capital Infrastructure Plan
ii. Reduce General Fund unreserved /undesignated balance to best practice
levels
iii. Tiered benefit plans and employee cost - sharing
iv. Modify funding levels for Equipment Replacement Fund
1. Fleet review and overhaul
This planning session will guide staff in the preparation of the FY 2011 -12 Preliminary
Budget, which will be presented at the August 16, 2011 City Council Meeting. Council
may raise other revenue, expenditure, development, policy, capital project and potential
budget reduction items for consideration as part of staff's preparation of the FY 2011 -12
Preliminary Budget.
Continue the monetary support to the School District with the condition that the funds are
used to support the Joint Use Agreement.
Personnel Costs: Majority consensus to reduce costs as proposed by staff. Council
Member Brann prefers using the reserves to bridge the gap until the election in April 2012.
General Fund unreserved /undesignated balance to best practice levels: Council majority
agreed to set the best practice level at 17 %, Council Member Jacobson prefers to
maintain a goal of 20% with the understanding that occasionally it may go below that
mark; Council Member Brann prefers to reduce it to 15 %. Consensus to review all fund
balances and if the logic is there for a different balance, Council would like to review that
also.
Capital Infrastructure Plan: Modify funding levels for Equipment Replacement Fund;
Determine projects and actual costs; Present cost estimates and how the projects can be
funded for Council consideration.
ADJOURNMENT at 9:15 a.m.
Cindy M esen, City Clerk
tegic Planning Session
June 8,, 2011
� -
is For Planning Session �TM
3. Review options for structurally balancing
the FY 2011 -2012 General Fund budget.
FY 2010 -2011
Year -end Update
aund Revenue and Ex e ditures....
fisted) - FY 2010 -2011'
GENERAL FUND
enue Underrun
Expenditures Underrun (0.2 %)
Surplus/ (Deficit)
Projected Year -End
10/11
(1,316,650)
155,815
$(1,160,835)
a
inatii£: the FY 2010-2011
nd Deficit
FUND BALANCE AT 10!1110:
$ 11,749,796
0111 ESTIMATED DEFICIT:
1.
$ (1,160,835)
111 ESTIMATEDFUND BALANCE:
10,588,961
SS REQUIRED RESERVES AND
= DESIGNATIONS:
(100,000)
UNRESERVED, UNDESIGNATED:
$ 9,888,961
(This is what the City refers to as our 'Reserve')
sed�Best
Practice —
nd Balance Reserve Policy
to mitigate
- current and future risks and to
e a balanced budget
our financial reserves provide us security
nst unexpected emergencies and contingencies,
cur policies for setting those target levels should be
periodically reviewed to balance our community's
level of risk tolerance against our operating
expenditure needs.
Government Finance Officers Association (GFOA),
recommends that general- purpose governments,
regardless of size, should maintain at least two
months of regular general fund operating
expenditures (roughly 17 %).
— Moody's, Fitch and Standard & Poor's both
recommend 10% as minimum reserves for AAA rating
i
W A SERVED, UNDESIGNATED: $ 9,888,961
s what the City refers to as our 'Reserve')
L BUDGETED EXPEND 9!30!12: 51,144,000
RECOMMENDED FUND BALANCE RESERVE: 17%
CALCULATED REQUIRED 'RESERVE': 8,524,000
OVER/(UNDER)RESERVE- $ 1,364,961
Proposed Best Practice
d Balance Reserve Policy
W-am
;a Beach - 15% of General Fund
riations
rson - 20% of annual operating budget
F,PgaRedondo Beach - Approx. I month General
Fund budgeted expenditures - 8.3%
- Manhattan Beach - 20% of annual budget
expenditures
- Culver City - 30% General Fund Operating
Expenditures.
Preliminary Budget
Preparation
10
GENERAL FUND
es, net
ers in
tal Revenues
Expenditures, net (unadjusted)
Transfers out
Total Expenditures
Surplus/ (Deficit)
Preliminary
Budget 11/12
$ 49, 944, 000
1,200,000
$ 51,144, 000
56,660,000
301,000
$ 561 961, 000
$ (5,8171000y
far 11/12 preliminary
m'�i ..
�t��n'�
PrRevenues:
ro ections for the
tions for revenue p J
assump mated 10/11
;;inn are key:. t
3 million increase
eck Fee - $1 850,000 increase #rom indexing
Ing permit Fee - �
`tress License
Tax - X300,000 increase resulting
oiler y Tax _ $277,000 increase 00 increase
250,
togenerated Electric Tax04 increase
240, 75,000 Increase
• Sales Tax In Lieu ny Tax (TOT) —
. Transient Occup Interest on
t Gas and Electric Utility Tax, growth
• Sales and Use Tad' Protected flat g ro
IInvestments, an Franchise Tax -
im
t o for 11/12 Preliminary
x p enditures:
ughs and other employee concessions expire
30 - $3.1 million
ERS Pension Rate Increases - $1.1 million
ealth Benefit Costs — Average 15% increase - $700,000
Salary Increases — 2% for the Supervisory /Professions
Group - $80,300
• Vacant positions eliminated — total of 43 positions
— approx. $4.9 million in total compensation
14
PERSONNEL SAVINGS
n in Workforce:
sions by Labor Groups:
TOTAL PERSONNEL SAVINGS
VALUE ($) VALUE ( '/-)
$ !44.06B
1 8;11)10
$ 5,226.968
17.420/o
a
Wyee Concessions Expiring,,,,.,,�-,
�/ 11
NIPLOYEE
SIONS $5 .2 M OR 17%
°gur Groups:
ns by Labo
VALUE
VALUE ( %y
$ 365,749
1.22%
Eation
mployees Associ
747,208
2.49%
fighters Association
199,949
0.67%
Police Management Association
_7
843,705
2 81'%�
Police Officers' Association
Police Support Services Employees
68,117
0.23 " /"
Association
and Professional Association
219,016
0.73%
Supervisory
(unrepresented)
708,606
2.36"%
Management/Confidential
$ 3,152,350
10.51%,
H
experienced in 2008 -2009.
decline in the portfolio as of June 30, 2009 .
umin no increases in salaries, it is projected
9
at the increase in rates will cost the City
- approximately $3,630,000 for the next three years.
$2,620,000 for the Safety groups and $1,010,000
for the Miscellaneous employees.
I
tions for 11/12 Preliminary .
.r
et Expenditures:
rnent Replacement Costs — Funded at 90%
�- .70,000)
ual OPEB Payment — Funded at 100%
x,000,000)
USD Funding - $250,000 cash payment &
continue funding crossing guard contract
80 000 and in -kind contributions ($721,727
e sti mated for FY 11/12), which results in
$1,051,727 of General Fund expenditures related
to the ESUSD
• No growth factored for nonpersonnel costs, except
for contractual increases in long -term contracts
113
iiminafcng%-.the Projected FY 2011-
�C+�reneral Fund StructuraF-Deficit`
anently eliminate 43 vacant positions Citywide
btsizing of departments
ry and Benefit Reduction opportunities
Early Retirements Options for Fire Safety and other
Employee Groups
Health Benefit Cost Sharing
Employee Pickup of PERS member payments
Tiered Benefit Plans
• Fleet Savings
• Centralize Shared Services
N
'{,y JV,uvu
ent Elimination of Vacant Positions:
Ptural Deficit:
(5,816,725)
Personnel Reductions:
4,527,358
Fleet Reductions and Other Structural Adjustments: 1,289,367
Adjusted Deficit: $
20
dear Forecast
21
21M 32044
2014 -2015
2015 -2016
MT:
FORE CAST
kORLCAST
IORLCASI
fORFCASI
22 834
tUKEC:AST
21 7411 7 ":
,C�RDUP
20,300,080
21,111.033
�'1 95fi,5f;/
18,892,47 ";
,829
1Li, T0,322
1'It`` =,T29
GROUPS
18,1`58,355
1(1 `22.032
12.6850+ 5
12.938.7F,t,
13, t y7.` 1?
11 461.492
13 710.72,
L.
.
51, 144, 000
52, 572. 882
54,046,581
55,566.644
57.134,673
ENTURES
2011 2012
2012 2013
2013 2014
2014 2015
F(_)RL( AS
2015 A116
FORECASI
,. REVENUES
FORECAST
FORECASI
FORLCASI
'it 14. 1,00(}
�< rat h ltt;U
W K),`.14
—TOTAL REVENUES
l i 12,02
1 ,244,1`,
SFJOR I I ALL
Effects of inflation,
health benefit
increases
and PERS rate
increases
21
al Infrastructure Plan
ation Projects -
Purchases -
& Sidewalks -
77-'io'Buildings & Structures -
TOTAL:
$7,990,000
$1,100,000
$7,810,000
$2,225000
$ 19,125,000
7�
Project Cost
petition
Pool
rose Facility
yurpose Unused
dball Court
5. Renovate Tennis
Courts
Comments
$4,800,000 Estimate based on feasibility report. tstirnate
includes $1.2M contribution frorn the
wo—oxom ; h....'t %sfund.
$7,f�t}0,U00 Intimate hatted on fea.ibility report.
$350,000 New locker rooms;, bleachers, etc.; rfepenric nt nn
status of con,,truc ling a new pool-
$10[),1)00 Convert to Rock climbing; wall.
$140,000 Masonry, fence posh., court re' >urtacing.
23
Cost Comments
Project _
rchase $1,10U,000 land is vacant now and owner is a
I.acia Park potential seller. Would allow
'son of park and incorporation
of new water features. Potential sale
pending.
-t
Project Cost Comments
$500,000 Removal of ficus trees and sidewalk /gutter
treet
reconstruction; new tree plantings.
A
drqOetOp 6. °,Create bike Lane if
feasible.
r "vd — Phase 2
Aviation)
`street Resurfacing
Io Blvd. to Imperial
11.:7ttand Ave. Resurfacing
(sepulveda Blvd. to Maryland)
12. Ifornet Way
13. bollards on Main Street
14. Crosswalk Lighting on Main
$2,850,000 Remove and replace top 6." Create bike lane if
feasible.
$8(x ?,000 Center Street is local and does not qualify for
,fate or federal funding. Minima) re,,urfacinf,
would greatly expand the life of the ', treet
$1,000,000 Grand Ave. Street is in need of moderate
reurfacin" which would greatly expand the life
r_if the street
$50,000 Grind and cap only.
$30,000 Install removahle /retractal le bollards at
strategic locations for safety during event where
streets ere closed.
$80,000 Replaceriient of flush mounted crosswalk lights
with wireless flashing puck,,
Project Cost
Nall upgrade.
ambers, West
t Construct a New
n1
Station Kitchen Remodel
I8. library Expansion N014" i
Children's Rouen
15, Teen Center upgiddw,
Total Estimated Costs $19,125,000
Comments
$1010,00() Ataprt(xt$10(),1�3rnore dr�pendingtonrCourYal'ti AV
desires and upgrades to Planning.
$')00,wX) Althougta I SI w.as sr'i`.rurcally reltofilted in tho lall'
1`3Rf) the hudd,g cr,de hx, �rgrnh� aptly
r hanf ;�d ��uu:r the Whrtiwi, Northnd,e and
I oma Prwta ParthquaW. F S? Mild be
upt ?raded in light of thr, new node, - a new t';]
couid be t;onntructed as Part Of ,a larger
Infr3structufe Pr ' cl ) i_'i.a.
S/S,000 The l ire DepmvnmA kitchen ry outdAed, cabmpts
are fall,, apart and surfaces worn.
E xpand ;area itrr chrldrer�'n r nailing prcgranas and
study factlitle, fol "W dents.
$`,o,ow I i,,n reinter {s mri drawn anrt crxald W,(' fare lift, rri'w
luf nil ure <and equiPrue'nt.
?(i
anent Replacement
ding Policy
gently, the Equipment Replacement Fund
ding funded at a 90% confidence level;
9/30/11, this amount will total $9 million;
`*
ana M ement's intent is to review the funding
9
level during the budget preparation process
to assess for reasonableness
21
Decisions
. �onnel Costs
t General Fund un reserved/ undesignated
lance to best practice levels
1117��Capital Infrastructure Plan
�• Modify funding levels for Equipment
Replacement Fund
Fleet review and overhaul
28