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2011 AUG 31 - CC PACKET SPCSPECIAL AGENDA EL SEGUNDO CITY COUNCIL EL SEGUNDO PUBLIC LIBRARY 111 W. Mariposa Avenue, El Segundo, CA 90245 The City Council, with certain statutory exceptions, can only take action upon properly posted and listed agenda items. Unless otherwise noted in the Agenda, the Public can only comment on City - related business that is within the jurisdiction of the City Council and /or items listed on the Agenda during the Public Communications portion of the Meeting. The time limit for comments is five (5) minutes per person. Before speaking to the City Council, please come to the podium and state: Your name and residence and the organization you represent, if desired. Please respect the time limits. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact City Clerk, 524 -2305. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. SPECIAL MEETING OF THE EL SEGUNDO CITY COUNCIL Wednesday, August 31, 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 ROLL CALL PUBLIC COMMUNICATIONS — (Related to City 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. ; ") o SPECIAL ORDERS OF BUSINESS: 1. Consideration and possible action regarding the presentation of the Fiscal Year 2011 -2012 Preliminary Budget. Staff will present a brief overview of the estimated General Fund Fiscal Year 2010 -2011 yearend projections and the General Fund Fiscal Year 2011 -2012 Preliminary Budget assumptions. Staff will also provide follow -up on open items from the prior Strategic Planning Session. a. Fiscal Year 2010 -2011 Yearend projections i. Fund Balance Reserve Yearend Balance Projection b. Fiscal Year 2011 -2012 Preliminary Budget i. Assumptions used in preparation of the FY 2011 -2012 Preliminary Budget ii. Eliminating the Projected FY 2011 -2012 General Fund Structural Deficit 1. Elimination of Vacant Positions 2. Proposed Salary and Benefit Reductions 3. Fleet Savings 4. Golf Course Lease Repayment c. Economic Development Plan i. Smokey Hollow d. Capital Infrastructure Plan The first hearing for the Fiscal Year 2011 -2012 Budget Adoption will be held at the September 6, 2011 City Council Meeting. Council may raise other development, policy, capital project and potential budget reduction items for consideration as part of staff's preparation for the FY 2011- 12 Adopted Budget. Recommendation: 1) Council to provide direction to staff regarding the FY 2011 -2012 Preliminary Budget; 2) Alternatively, discuss and take other action related to this item. 2. Consideration and possible action regarding the presentation of fiscal year 2010 -2011 Third Quarter Financial Review Recommendation: 1) Receive and file FY 2010 -2011 Third Quarter Financial staff report. ADJOURNMENT POSTED: DATE: zi--, T­c> it TIME: - Pr—'A NAME: t -1L-4,1A F. UO2 L SEGUNDO CITY COUNCIL MEETING DATE: August 31, 2011 AGENDA STATEMENT AGENDA HEADING: New Business AGENDA DESCRIPTION: Consideration and possible action regarding the presentation of Fiscal Year 2010 -2011 Third Quarter Financial Review. (Fiscal Impact: none) RECOMMENDED COUNCIL ACTION: (1) Receive and file FY 2010 -2011 Third Quarter Financial staff report ATTACHED SUPPORTING DOCUMENTS: FISCAL IMPACT: None Amount Budgeted: $0 Additional Appropriation: N/A Account Number(s): None ORIGINATED BY: Angelina Garcia, Fiscal Services Manager REVIEWED BY: Deborah Cullen, Director of Financ� APPROVED BY: Doug Willmore, City Manager (LAA..) BACKGROUND AND DISCUSSION: Third Quarter Financial Review Fiscal Year 2010 -2011 Staff has reviewed all revenues and expenditures for Third Quarter Fiscal Year 2010 -2011, with an emphasis on the General Fund, to determine if all sources and uses are on target with the originally adopted budget and to highlight any areas that may end the Fiscal Year significantly above or below budget. As we review the Third Quarter results and present the Preliminary FY 2011 -2012 Budget, the City continues to encounter uncertain economic times and financial challenges. As of June, the Bureau of Labor and Statistics reports that the state of California has the second largest unemployment rate in the nation, coming in at 11.8 %. 003 2 Current economic forecasts cautiously predict a slow growth within the state of California until the end of 2011. There are some indicators that show the local economy is beginning to experience a bit of recovery. However, the revenue loss that the City has experienced related to the price of natural gas takes related revenues back to FY 2004 levels. This loss of revenue will take several years to fully recover and Gas Utility Users Tax and Cogenerated Electric Tax are performing below same period last year and below budget targets. These two revenue producers are very sensitive to the price of natural gas and the commodity is still well below historical levels. The City's business and industry sectors provide the majority of sales and use tax and this sector has shown improvement but is still sensitive to the overall economy. However, Standard & Poor's decision to downgrade the U.S. credit rating earlier this month could further prolong the economic recovery. Detailed information is provided below, but for summary purposes staff is projecting that General Fund revenues will fall short of the adopted budget by $289,381 and will end the Fiscal Year $3,229,032 below FY 2009 -2010 actuals. To minimize the projected deficit staff has taken the following actions to reduce expenditures: • A hiring freeze has been instituted for all vacancies and only critical positions are being filled with the approval of the City Manager; Currently, the City is operating with 51 vacant positions • A retirement incentive was offered and 8 employees opted to retire. Many of those positions have remained vacant or are being filled with part-time employees with no benefits provided; • The Fire Department is continuing to run down staffing levels to reduce overtime; • All employee labor groups have agreed to labor concessions for the remainder of the FY 2010 -2011 Fiscal Year. Currently the City has sufficient General Fund unreserved/undesignated funds available to accommodate the estimated shortfall. If the revenues perform stronger during the summer months or expenditures are further reduced the estimated shortfall will be revised at yearend. 004 General Fund Revenues The following is a list of major General Fund revenues and the performance of each source through midyear: Tahlo I.- General Fund Revenues Revenue Source Prior Year Through 613012010 Current Year Through 613012011 FY 2010- 2011 Adopted Budget % of Budget Received FY 2010- 2011 Year -end Estimate Variance Over/ (Under) FY 2010 - 2011 Budget Business License 9,193,909 9,654,199 10,043,000 96.13% 9,750,000 (293,000) Sales & Use Tax 5,820,281 6,122,702 8,185,000 74.80% 8,250,000 65,000 Sales Tax in Lieu 2,837,197 2,497,919 2,400,000 104.08% 2,497,919 97,919 Property Tax 5,797,074 5,506,882 6,188,800 88.98% 6,138,800 (50,000) Transient Occupancy (TOT) 2,835,196 3,026,330 3,890,000 77.80% 4,125,000 235,000 Charges for Services 2,515,625 3,154,053 3,510,850 89.84% 4,060,900 550,050 Electric Utility Tax 2,296,757 2,473,238 3,348,000 73.87% 3,450,000 102,000 Franchise Tax 2,246,721 2,418,787 2,350,000 102.93% 2,496,000 146,000 Cogeneration Electric 1,007,081 799,795 1,400,000 57.13% 1,080,000 (320,000) License & Permits 829,282 849,007 1,343,100 63.21% 1,186,600 (156,500) Gas Utility Tax 955,429 535,266 1,500,000 35.68% 700,000 (800,000) Interest on Investments 581,676 514,441 875,000 58.79% 850,000 (25,000) Other Revenues 3,290,181 3,541,955 4,093,800 86.52% 4,252,950 159,150 Total General Fund Revenues Net of Transfers 40,206,409 41,094,574 49,127,550 83.65% 48,838,169 (289,381) Transfers In 5,797,278 1,902,006 3,286,000 3,286,000 0 Total General Fund Revenues 46,003,687 42,996,580 52,413,550 52,124,169 (289,381) Business License Tax is the City's second largest General Fund revenue source, accounting for 20% of total revenues. The majority of this revenue stream is collected in January and February, and based on the revenues received in the first 9 months of the Fiscal Year, this category is projected to fall short by approximately $293,000 of the adopted budget. This decrease is primarily due to a drop in employee headcount which is one of the main factors in the calculation of business license tax. Business License Tax FY 2010 Actual Revenue: $ 9,305,117 FY 2011 Adopted Budget: $10,043,000 FY 2011 Yearend Estimate: $ 9,750,000 Sales & Use Tax and Sales Tax in Lieu combined is the City's largest revenue source, accounting for 21.5% of the General Fund revenues. The yearend estimates track slightly over budget and show a projected increase over FY 09 -10 yearend of $680,000. Adjusted for reporting aberrations, taxable sales for all of Los Angeles County showed an increase compared to first quarter last year of 7.3% while the Southern California region as a whole was up 8.7 %. 005 Sales Tax in Lieu is received in two payments each year (January and May) and is calculated as a percentage of the estimated Sales and Use Tax and is projected to end the year slightly over budget by $97,919 and $339,278 below last year actual revenue. Sales & Use Tax FY 2010 Actual Revenue: $7,230,732 FY 2011 Adopted Budget: $8,185,000 FY 2011 Yearend Estimate: $8,250,000 Sales Tax in Lieu FY 2010 Actual Revenue: $2,837,197 FY 2011 Adopted Budget: $2,400,000 FY 2011 Yearend Estimate: $2,497,919 Property Tax is currently 1.6% or $88,570 less than the same period last year and is projected to end the year approximately $50,000 below budget. The City has experienced a net taxable value decrease of -3.0% for the 2010 -2011 tax roll, which was slightly more than the decrease experienced countywide at -1.7 %. The assessed value decrease between 2009 -2010 and 2010- 2011 was $ -19.4 million, which contributed to the overall decline in assessed value this year. Real property values were reduced 0.237 %, the first ever negative inflationary adjustment since the adoption of Proposition 13. Property Taxes FY 2010 Actual Revenue: $6,291,148 FY 2011 Adopted Budget: $6,188,800 FY 2011 Yearend Estimate: $6,138,800 Transient Occupancy Tax (TOT) is currently 6.7% or $191,134 above the same period last year, with 77.8% of budget received. Although this revenue stream is showing indications of recovery, it remains especially sensitive to the economy. Through the third quarter of FY 2010- 2011, TOT shows a moderate increase compared to the third quarter of FY 2009 -2010, and it is hopeful that the trend will continue during the last quarter. Historically, the fourth quarter is the largest quarter of the Fiscal Year. Based on staff inquiries, the increase in this category is due to higher than projected occupancy levels driven by the increase in tourism and business travel. Staff will continue to monitor and report any changes due to the economic conditions at yearend, but is projecting this revenue source to finish the year approximately $235,000 over the budgeted amount. U Transient Occupancy Tax FY 2010 Actual Revenue: $3,954,416 FY 2011 Adopted Budget: $3,890,000 FY 2011 Yearend Estimate: $4,125,000 Charges for Services includes Zoning and Planning fees, Plan Check fees, Plan Retention fees, Energy Plan Check fees, and Planning Service fees and have a combined budget of $3,510,850. The City has received $3,154,053 or 89.8% combined through Third Quarter. Staff had factored in the continued slowdown in housing and construction in the budget estimate for FY 2010 -2011, and this revenue group is trending over the original estimate. At this time staff is estimating this revenue group to end the year approximately $550,000 over budget. Charges for Services FY 2010 Actual Revenue: $ 3,196,415 FY 2011 Adopted Budget: $ 3,510,850 FY 2011 Yearend Estimate: $ 4,060,900 Electric Utility User's Tax is estimated to come in higher than budget by approximately $102,000. The increase is attributable to an increase in consumption in the commercial and industrial sector. As of June 30, 2011, this revenue source is at 73.87% of the Adopted Budget. Based on staff research, electric rates have not changed and this modest increase is attributed to gradual economic recovery. The fourth quarter has consistently been the highest quarter for the Fiscal Year due to increased usage in summer. Electric Utility User's Tax FY 2010 Actual Revenue: $3,374,081 FY 2011 Adopted Budget: $3,348,000 FY 2011 Yearend Estimate: $3,450,000 Franchise Tax is another one of the City's major revenue sources that has been impacted by the fluctuating price of natural gas. The average price of natural gas for the first 8 months of the 2011 calendar year is up 2.2% compared to calendar year 2010. This year's annual payment from the two top tax producers was $157,500 higher than last year's payment primarily due to a slight increase in the price of natural gas. These two companies account for over 90% of the total revenue received in this category and payments are made to the City once each year. However, this revenue category is down approximately $1.1 million compared to its high in FY 2008 -09. Franchise Tax FY 2010 Actual Revenue: $2,327,662 FY 2011 Adopted Budget: $2,350,000 FY 2011 Yearend Estimate: $2,496,000 U07 Cogenerated Electric Utility User's Tax is estimated to come in lower than budget by $320,000 attributable to a reduction in the Short Run Avoided Cost (SRAC), which is the cost that the local refinery pays Southern California Edison (SCE) for electricity purchased and used to value the Cogenerated production for the tax payment. This SRAC formula is tied to changes in natural gas prices, which have continued to be unstable and this revenue is projected to end the year approximately $210,000 lower than FY 2010 yearend. Cogenerated Electric Utility User's Tax FY 2010 Actual Revenue: $1,290,413 FY 2011 Adopted Budget: $1,400,000 FY 2011 Yearend Estimate: $1,080,000 License and Permits revenue stream is tracking at 63.2% of the estimated budget at Third Quarter, and is anticipated to end the year under budget by $156,500 due to a decrease in anticipated building and electrical permits. License and Permits FY 2010 Actual Revenue: $ 1,079,956 FY 2011 Adopted Budget: $ 1,343,100 FY 2011 Yearend Estimate: $ 1,186,600 Gas Utility Tax is currently at 35.68% of budget. This revenue source continues to be difficult to forecast based on the uncertainty of the local power plant and the fluctuation of the price of natural gas. Gas Utility Tax FY 2010 Actual Revenue: $1,107,441 FY 2011 Adopted Budget: $1,500,000 FY 2011 Yearend Estimate: $ 700,000 Interest on Investments has experienced a significant reduction due to the continued economic downturn and the result of the Federal Reserve Bank's rate reduction in short-term and long -term interest rates over the last couple of years. Currently, the City's portfolio is invested in Local Agency Investment Funds (LAIF) (5% of the portfolio value), money market accounts (8% of the portfolio value), negotiable CD's, (6% of the portfolio value), Federal Agency Issues (51% of the portfolio value), and miscellaneous securities (30% of the portfolio value). The average return on our miscellaneous securities through midyear was 4.8 %, and LAIF was 0.45 %, with the total average return for entire portfolio being 2.9 %. LAIF is predicted to continue to return 0.45% or less through the end of the year we are estimating interest income will be on target with budget. 008 Interest on Investments FY 2010 Actual: $ 836,000 FY 2011 Adopted Budget: $ 875,000 FY 2011 Yearend Estimate: $ 850,000 Estimated Revenues for Enterprise Funds Revenues in the Water and Sewer Fund are both expected to exceed budget at yearend. The Golf Course Fund is currently showing 66% of budget received but is expected to be on target with budget at year end due to increased summer usage. General Fund Expenditures Fiscal Year 2010 -2011 Budget Reduction Overview During the preliminary planning for the Fiscal Year 2010 -2011 General Fund budget a deficit of approximately $10 million was identified. Staff presented an initial reduction of $4.8 million from the prior years adopted budget, as shown in Table 2 (below). This reduction was achieved through savings in professional technical and contract costs. The salary and benefit savings were attributed to 28 full time vacant positions. Table 2 - General Fund Budget Reductions - FY 2009 -2010 compared to FY 2010 -2011 Expenditure Group Reduction Non - Personnel $1,095,491 Salaries 3,549,407 Benefits 173,302 Total General Fund Expenditure Reductions 4,818,200 To address the remaining $5.2 million deficit Council directed the City Manager to begin meeting with the labor unions regarding employee concessions and early retirement options to reduce personnel expenditures. The City successfully negotiated personnel reductions and employee concessions totaling $5.2 million or a 17% reduction in salaries and benefits. The summary of these savings is shown below in Table 3. 009 The Fiscal Year 2010 -2011 Personnel Cost Reductions are valued as follows: _nnfn �n7� n.. ....,......�1!'•.o11?niiuntin »c l "Vic .7 —!'W LIKE icw• - - _ - - - -- - - - - -- PERSONNEL COST REDUCTIONS Adopted VALUE ($) VALUE ( %) Budget Budget Reductions by Reduction in Workforce: 09/10 10 /11 De artment 8 Early Retirements $ 415,623 1.39% 7 Planned Retirements 5,815,050 762,942 2.54% 3 Resignations 16,325,720 314,775 1.05% 1 Reclassifications 15,706,900 37,210 0.12% Communications Center $ 1,530,550 5.10% Concessions by Labor Groups: 3,577,850 VALUE ($) VALUE ( %) City Employees Association $ 365,749 1.22% Firefighters Association 4,610,400 747,208 2.49% Police Management Association 2,296,450 199,949 0.67% Police Officers' Association 4,128,250 843,705 2.81% Police Support Services Employees Association 501,000 68,117 0.23% Supervisory and Professional Association $62,328,400 219,016 0.73% Management/Confidential (unrepresented) 708,606 2.36% $ 3,152,350 10.51% Lao s: VALUE ($) VALUE ( %) 3 City Employees Association $ 304,791 1.02% 1 Police Support Services Employees Association 56,764 0.19% 2 Supervisory and Professional Association 182,513 0.61% $ 544,068 1.81% TOTAL REDUCTIONS IN PERSONNEL COSTS $ 5,226,968* 17.42 %* * The excess over the $5.1 million relates to the first 5% concession which began August 1, 2010. Table 4 shows the total budget reductions by department from FY 09/10 to FY 10 /11: Table 4 — Fiscal Year 2009 -2010 v. Fiscal Year 2010 -2011 Adopted Budgets 00 Adopted Amended Total Budget Budget Budget Reductions by Department 09/10 10 /11 De artment Elected Officials $924,900 $758,715 ($166,185) Administrative Support 5,815,050 4,846,818 (968,232) Police 16,325,720 14,432,127 (1,893,593) Fire 15,706,900 12,629,813 (3,077,087) Communications Center 2,337,050 1,420,100 (916,950) Planning /Building Safety 3,577,850 2,345,380 (1,232,470) Public Works 6,104,830 5,177,767 (927,063) Recreation and Parks 4,610,400 4,101,680 (508,720) Library 2,296,450 2,099,835 (196,615) Nondepartment 4,128,250 4,296,919 168,669 Transfers to Other Funds 501,000 301,000 (200,000) Total General Fund Expenditures $62,328,400 $52,410,156 ($9,918,244) 00 Y The General Fund expenditures through June 30, 2011 are illustrated in the following table: Table 5 — General Fund Expenditures by Department — Current Year Compared to Prior Year As demonstrated in Table 5, the City has been able to save $4 million or approximately 9% compared to the first nine months of Fiscal Year 2009 -2010. Attributed to these savings are: 1. $3.6 million reduction in salaries paid to full -time employees; 2. $614,600 reduction in Vacation/Sick Leave Payouts; 3. $535,000 reduction in pension funding costs (direct effect of reduction in salaries); 4. $221,000 reduction in overtime pay; 5. $100,000 reduction in interfund transfers 6. $98,000 reduction in supplies; 7. $23,000 reduction in books and printed materials; However, the following expenditures show an increase when compared to Fiscal Year 2009- 2010. These increases were included in the adopted budget : 1. $439,000 increase in Health Insurance costs due to premium increases; and 2. $677,000 increase in contractual services primarily due to annual increase in existing contract costs that were included in the adopted budget. The projected General Fund expenditures at yearend are estimated to come in under prior year's actual expenditures by approximately $4.3 million and end the year slightly over current year budget by approximately $324,500 or 0.6 %, as illustrated in Table 6 below. The primary reason for the slight overrun is due to additional costs for retiree payouts that will not provide the required savings target for Non Department. The table below shows non department ending the 011 Third Quarter Third Change % Change YTD Quarter from PY from PY Department 10 /11 YTD 09/10 Third Third Elected Officials $621,599 uarter uarter Administrative Support 3,328,550 $626,210 (4,611) - 0.74% Police 11,748,698 3,853,259 (524,709) - 13.62% Fire 10,280,629 11,955,763 10,554,916 (207,065) - 1.73% Communications Center 1,301,106 1,559,521 (274,287) - 2.60% Planning /Building Safety 1,583,009 1,787,871 (258,415) - 16.57% Public Works 3,570,855 4,287,960 (204,862) - 11.46% Recreation and Parks 3,048,375 3,350,474 (717,105) - 16.72% Library Nondepartment 1,462,299 1,670,493 (302,099) (208,194) - 9.02% - 12.46% Transfers to Other Funds 3,205,885 225,756 4,332,124 (1,126,239) - 26.00% 375,687 (149,931) - 39.91% Total General Fund Expenditures 40,376,761 44 354 278 (3,977,517) -8.97% As demonstrated in Table 5, the City has been able to save $4 million or approximately 9% compared to the first nine months of Fiscal Year 2009 -2010. Attributed to these savings are: 1. $3.6 million reduction in salaries paid to full -time employees; 2. $614,600 reduction in Vacation/Sick Leave Payouts; 3. $535,000 reduction in pension funding costs (direct effect of reduction in salaries); 4. $221,000 reduction in overtime pay; 5. $100,000 reduction in interfund transfers 6. $98,000 reduction in supplies; 7. $23,000 reduction in books and printed materials; However, the following expenditures show an increase when compared to Fiscal Year 2009- 2010. These increases were included in the adopted budget : 1. $439,000 increase in Health Insurance costs due to premium increases; and 2. $677,000 increase in contractual services primarily due to annual increase in existing contract costs that were included in the adopted budget. The projected General Fund expenditures at yearend are estimated to come in under prior year's actual expenditures by approximately $4.3 million and end the year slightly over current year budget by approximately $324,500 or 0.6 %, as illustrated in Table 6 below. The primary reason for the slight overrun is due to additional costs for retiree payouts that will not provide the required savings target for Non Department. The table below shows non department ending the 011 year $126,444 below budget; but this amount will fall short of the projected savings by 105,989. It is important to note that the value of the concessions totaling $5.1 million is the annualized savings and will be realized but is offset by the slight overrun. This amount is shown separate from the department totals due to timing of budget adoption and finalizing concessions with the bargaining groups. Additionally, two employee groups agreed to concessions that included a reduction in vacation balances, which totaled $218,447. This amount is listed separately to show the value that will positively impact the City's long -term liabilities. Table 6 — Fiscal Year 2010 -2011 Budget v. Projected Year -end — General Fund Projected (Over) $ (Over) Depart ment Budget 09/10 Budget 10/11 fear -End 10/11 FY 09/10 Under PY Under 10/11 Elected Officials $ 924,900 Actual Actual Budget Administrative Support PP 5,815,050 909,439 823,410 828,007 4,597 86,029 Police 16,325,720 5,376,441 4,342,520 5,177,946 835,426 1,033,921 Fire 15,706,900 16,099,947 14,778,446 15,355,981 577,535 1,321,502 Communications Center 2,337,050 14,160,358 13,530,122 13,591,663 61,541 630,236 Planning /Building Safety 3,577,850 1,420,100 1,311,914 1,802,452 490,538 108,186 Public Works 6,104,830 2,592,329 2,074,468 2,341,384 266,916 517,861 Recreation and Parks 4,610,400 5,496,562 5,057,230 5,296,757 239,527 439,332 Library 2,296,450 4,546,184 4,547,623 4,509,013 (38,610) (1,439) Nondepartment 4,128,250 2,318,029 1,965,953 2,110,018 144,065 352,076 Transfers to Other Funds 501,000 4,504,059 4,216,200 6,053,483 1,837,283 287,859 301,000 301,000 151,000 (150,000) 62,328,400 57,724,449 52,948,884 57,217,704 4,268,820 4,775,564 Impact of Concessions - (5,100,000) Value of vacation hours - - (5,100,000) forfeited —�— 218,447 Total General Fund Expenditures $ 62,328,400 52,624,449* * Includes $214,294 of Continuing Appropriations 52,948,884 57,217,704 4,203,767 (105,989) and Encumbrances The following is summary of General Fund expenditures by major categories: Elected Officials and Administrative Support Services The Elected Officials category, which consists of the City Council, City Clerk and City Treasurer, has expenditures totaling $621,599 or 68.35% of the adjusted budget. It is expected that this category comes in on target with budgeted amounts. The Administrative Support category, which includes the City Manager's office, Finance and Human Resources, has expenditures totaling $3,328,550 or 61.91% of budget. This category currently has a total of 7 vacant positions to which these cost savings can be attributed. It is expected that this category comes in on target with budgeted amounts. C,l 12 Public Safety The Police Department is projected to come in on target with budget at yearend, primarily due to cost savings on salaries for unfilled positions. This category currently has a total of 8 vacant positions to which some cost savings can be attributed. Expenditures through the end of the Third Quarter totaled $11,748,698 or 72.97% of budget. It is expected that the year -end expenditures for this department will be within the budgeted amounts as this department has no plans of expending any General Fund monies towards filling any of the vacancies. In addition, this department is expected to save approximately $86,000 in furloughs during the last three months of the Fiscal Year. This department also shows a reduction in overtime expense of 25% when compared to the first 9 months of the prior year. The Fire Department is projected to come in under budget at yearend as well, primarily due to cost savings resulting from running down daily staffing levels from 18 to 14. This is accomplished through absences and current vacant positions not being filled. Expenditures through the end of the Third Quarter totaled $10,280,629 or 72.6% of budget. This category currently has a total of 6 sworn and 1 civilian vacant positions and is expected to come in within budget due to these vacant positions in addition to approximately $37,000 in furloughs to be taken during the last three months of the Fiscal Year. Additionally, Leave Replacement Overtime is down 11.3% and FLSA overtime is down 16.8% compared to the same period last year. The Communications Center is projected to come in at budget at yearend. Expenditures through the end of the Third Quarter totaled $1,301,106 or 91.62% of budget. This category is expected to come in within budget as all contractual payments have been made for the remainder of this Fiscal Year. Planning and Building Safety Expenditures through the end of the Third Quarter totaled $1,583,009 or 61.07% of the budget. This department continues to maximize staffing efficiency with consultant resources; this, in turn enables them to more effectively control expenditures when necessary due to the uncertain economic conditions and fluctuation in the volume of permit applicants. This department is projected to come in under budget at year -end. This category currently has a total of 2 vacant positions to which some of these cost savings can be attributed. Public Works This function's General Fund divisions consist of Government Buildings, Engineering, Street Services, Street Maintenance, Traffic Safety, Solid Waste Recycling, Wastewater, Storm Drains, Equipment Maintenance and Administration. Expenditures through the end of the Third Quarter totaled $3,570,855 or 64.97% of budget. This category currently has a total of 5 vacant positions to which these cost savings can be attributed. 0,13 Recreational Cultural and Information Services The Recreation, Cultural and Information Services function includes the Recreation and Parks Department and the Library Department. For the first 9 months of the Fiscal Year, the Recreation and Parks department is slightly below budget with actual expenditures at $3,048,375 or 67.05% of budget. Currently, the Parks Division is $1,272,827 or 28.26% of budget and the Recreation Division is $1,775,547 or 39.42% of budget. This category currently has a total of 4 vacant positions to which these cost savings can be attributed. Library Services is on target with budget at $1,462,300 or 63.08% of expenditures realized though the first 9 months of the Fiscal Year. This category currently has a total of 1 vacant position to which these cost savings can be attributed. Also, the Library Department has reduced their hours /days of operations. Nondepa_ Nondepartment is projected to end the year slightly over plan. The primary reason for the slight overrun is due to additional costs for retiree payouts that will not provide the required savings falling short by $105,000. Summary This Third Quarter review shows that the approved budget realistically forecasted revenues and expenditures and staff has been managing operations within the constraints of the current budget. In addition, the savings obtained through employee concessions have been realized. Even in these uncertain economic times, we have been able to control our expenditures to minimize the impact of unforeseen revenue losses. Staff will continue to identify expenditures savings and continue to implement cost reduction measures in an effort to reduce or eliminate the estimated shortfall.