Fiscal Year Proposed Budget

Transcription

1 Mayor Antonio R. Villaraigosa Fiscal Year Proposed Budget Budget and Financial Policy Team

2 WHAT HAVE WE ALREADY IMPLEMENTED? Workforce Reductions ERIP (2,400), Layoffs (473) and Transfers (618) Furloughs Between Furlough days for General Fund Civilian Employees Belt-tightening Measures Managed Hiring, Freeze on Equipment and Furniture Purchases, Suspension of Capital Projects, Travel Limits Efficiencies & Revenue Increases Ambulance Billing, Planning Fee Adjustments, Parking Meter Upgrades One-time Solutions SPRF Transfers, Sale of Surplus Assets, and Sale of Surplus Property

3 CITY WORKFORCE HAS DECREASED CITYWIDE AUTHORIZED FULL-TIME POSITIONS FY TO FY Total Positions 38,574 38,869 39,615 39,261 37,974 34,298 Full-Time Positions 15,000 14,000 13,000 12,000 11,000 10,000 13,777 12,006 12,791 13,886 12,445 12,538 14,060 14,053 14,055 13,374 12,875 12,936 12,181 12,333 10,983 14,140 10,437 9,721 9,000 8,000 Civilian - General Fund Civilian - Special Funds* Sworn** *Includes Recreation and Park and Library **Includes General Fund and Special Fund positions ***Table includes Resolution Authorities authorized in the Adopted budget but excludes subs and resos authorized after budget adoption ~1039 additional positions (most are attributed to the ARRA program and other special funded off-budget staffing assignments) NOTE: Special Fund figure has not been influenced by GF transfers. Most transfers from GF to SF have gone to Proprietary Depts.

4 PRIMARY COST DRIVERS LACERS AND LAFPP RETIREES AND BENEFICIARIES LACERS* Number of Retirees FIRE AND POLICE PENSIONS** Number of Retirees TOTAL Service Retired 12,740 8,491 21,231 Disabled Retired 905 2,413 3,318 Survivors and Beneficiaries 3,619 2,441 6,060 TOTAL 17,264 13,345 30,609 *Data as of June 30, 2010 provided by LACERS, does not factor in proposed Tiers **Data as of Sept 30,2010 provided by LAFPP, does not factor in proposed Tiers

5 PRIMARY COST DRIVERS GF CITY CONTRIBUTIONS TO PENSION SYSTEMS* FY TO FY % of GF 12.1% 15.5% 16.6% 15.3% 16.2% 17.6% 24.5% 27.9% 31.6% 34.4% Total Contribution $479.3 $673.0 $737.0 $696.8 $710.7 $802.1 $1,072.6 $1,254.9 $1,461.0 $1,638.4 $836.3 $2,000 $1, Net change from FY2011 to FY2015 $ MILLIONS $1,000 $500 $ Projected Projected 1, Projected 1,260.4 Pension Health Projected If GF contributions continue to rise as forecasted, the difference in contributions over a 10 year window will be over $1.1 billion. *LACERS and LAFPP

6 PRIMARY COST DRIVERS HUMAN RESOURCES BENEFIT EXPENDITURES FY TO FY Total Contribution $401.3 $439.7 $466.5 $467.6 $505.3 $545.7 $555.9 $591.7 $627.8 $668.5 $122.8 $ MILLIONS $800 $600 $400 $ Net change from FY2011 to FY2015 $ Projected Health Care and FLEX Projected Projected Worker's Comp Projected Health Care and Flex includes Unemployment Insurance contributions and Employee Assistance Contributions.

7 REVISED CAO ESTIMATED GENERAL FUND DEFICIT Capital Program $38M, 11% Health Benefits, $24M, 7% $ BILLION 3.5 Employee COLAS $122M, 36% 3 Pension Benefits $152M, 46% 2.5 ESTIMATED GF SPENDING ESTIMATED GF REVENUE ESTIMATED GF DEFICIT: $336.3 million

8 WHAT S NOT AVAILABLE FOR GF REDUCTION? GENERAL FUND APPROPRIATIONS $4,375,214,167 Less Departmental Receipts Less Trans and Pension Payments Less Benefit Payments (HRB Active employee benefits & WC) Less Debt Payments (CAP Finance) Less Liability Claims Less Judgment Obligation Bonds Less Water and Electricity Less Mandatory Library and RAP Appropriations Less "Non-discretionary" Special Fund, GCP, and UB $333,351,420 $742,900,328 $559,131,165 $210,507,740 $48,520,000 $10,761,715 $50,428,994 $220,863,004 $105,915,741 SUBTOTAL $2,092,834,060

9 WHAT MIGHT BE AVAILABLE FOR GF REDUCTION? SUBTOTAL (from previous page) $2,092,834,060 Less Police Less Fire $1,094,397,299 $350,842,367 WHAT S LEFT $647,594,394 Remaining GF Operating Departments: Aging Disability Animal Services Emergency Management Building and Safety Employee Relations Board CAO Finance City Attorney Ethics Dept City Clerk GSD City Controller ITA City Council Mayor Cultural Affairs Neighborhood Empowerment Personnel Planning PW-Board PW-Con Ad PW-Engineering PW-Street Services Transportation Treasurer Other UB, GCP and Other Special Fund Accounts GF Capital Improvement Accounts TOTAL OPERATING DEPARTMENTS $566,577,144 $74,670,750 $6,346,500

10 Balancing the FY11-12 Budget

11 BALANCING THE FY11-12 BUDGET Budget Goals: Maintain essential City Services Maximize Operational Efficiencies Citywide Minimize Service Reductions Mitigate Layoffs Limit reliance on one-time solutions Budget Development Process and Strategies: Solicited Input from Neighborhood Councils and Residents Conducted deep-dive meetings with large GF Departments Collaborated with CAO/CLA on Mid-Year Report and consider proposals for inclusion as part of the Budget Right-Sized departments by eliminating vacancies, regularizing positions and adjusting salary savings rates Pursued cost-savings initiatives through labor negotiations Matched labor savings targets with budgetary targets

12 BUDGET HIGHLIGHTS Proposes Reserve Fund Balance of $177 million (4% of GF) Continues Police Hiring to Attrition (9,963 Officers) Maintains Full Funding for Citywide Gang Reduction and Youth Development Services Restores Library Hours (6 days of service) Provides 735 miles of Street Preservation Provides Funding for 50,000 New Pothole Repairs, a 20% Increase from the Prior Year (from 250,000 to 300,000) Maintains Graffiti Abatement Program with minimal funding reduction (6.5%) Provides Full Funding for Emergency Management Continues Operations at 7 Animal Shelters Citywide Maintains Senior Home-Delivered Meals Program

13 FINAL GENERAL FUND DEFICIT TO SOLVE NOTE: The City s projected deficit for next year as last published by the City Administrative Officer (CAO) was $350 million. The CAO has revised this figure to $336 million. However, in order to get a complete picture of what the budget must solve for next fiscal year, it is necessary to start with an alternative, fully burdened projected deficit of $457.5 million. (millions) ($336.3) ($80.0) ($41.2) ($457.5) Revised CAO Estimated FY11-12 General Fund Deficit Remove Assumption that Negotiated Police OT Reduction Continues Remove Assumption that Fire Modified Staffing Continues Fully-Burdened Deficit to be Addressed by Budget

14 OVERVIEW OF BUDGET BALANCING SOLUTIONS GENERAL FUND DEFICIT ($457.5) Fire Deployment Plan $53.7 New Revenue LAPD Sworn Salary and OT Reductions Civilian Furloughs $100.0 $93.4 Special Fund Maximization One-Time Solutions Fire Deployment Plan Police Sworn Reductions Reductions and Efficiencies $105.3 Special Fund Maximization $51.0 Reductions & Efficiencies New Revenue $11.0 Civilian Furloughs One-Time Solutions $43.1 REMAINING DEFICIT $0.0

15 FIRE DEPLOYMENT PLAN $53.7 M The new LAFD Deployment Plan replaces the Modified Coverage Plan (MCP) that has been in place since The Current MCP is valued at $58 M in savings. As proposed by LAFD, the Plan, developed using new CAD/ADAM deployment software, utilizes Fire Department dispatch data to model resource coverage based on response times, call frequency and incident types with each fire station district. This data-driven approach replaces the current rotating resource closures of the MCP with Fire company closures, redeployments, realignment of resources and flex staffing that re-focuses emergency response to match the makeup and distribution of emergency call loads. The Plan redeploys 318 Sworn Firefighters and deletes these position authorities over three years. No Firefighters will be laid off.

16 POLICE SWORN SALARY AND OVERTIME REDUCTIONS $100 M Maintains police hiring to attrition (9,963 Officers). Assumes $80M in overtime savings through management of compensated time off and deployment of sworn resources. Includes $20M in targeted savings through operational efficiencies. Deletes 105 vacant civilian positions. Provides funding for Phase II of In-Car Video.

17 CIVILIAN FURLOUGHS $93.4 M The Proposed Budget includes: 26 furloughs without COLA and 36 furloughs with COLA. Furloughs will remain until ratification of the tentative labor agreement. The CAO under the direction of the EERC is currently engaged with our other employee representatives in an effort to secure contract savings to allow for the restoration of city service by reducing or eliminating furloughs. The Furlough Committee developed a furlough calendar (see page 840 on Proposed Budget Detail of Department Programs Volume II).

18 REDUCTIONS AND EFFICIENCIES $105.3M Examples of Reductions: Elimination of 680 full-time positions 11% Reduction to Mayor s Staff Budget 10% Reduction to City Council Budget Reduced level of funding for Recreation and Parks Programs and Services 15% Reduction to Cultural Affairs Grants Realignment of Crossing Guard Services 10% Reduction to Annual Appropriation to Neighborhood Councils Elimination of 311 Swing Shift Elimination of General Fund Support for City Channel 36 10% Reduction to Homeless Shelter Program Continued Reduction of General Fund Support for Capital Improvement Projects Examples of Efficiencies: Consolidation of Treasurer with the Office of Finance Transfer of Northeast San Fernando Animal Shelter to Non-Profit Reduction of Outside Council Litigation Expenses Transfer of Lot Cleaning, Weed Abatement and Illegal Dumping from Street Services to Sanitation Implementation of Public Private Partnerships at Five Cultural Affairs Facilities by January 2012 Reduction of Unemployment Insurance Costs through the Mitigation of Layoffs

19 FURTHER REDUCING THE WORKFORCE CITYWIDE AUTHORIZED FULL-TIME POSITIONS FY TO FY Total Positions 38,574 38,869 39,615 39,261 37,974 34,298 33,618 Full-Time Positions 15,000 14,000 13,000 12,000 11,000 10,000 13,777 13,886 12,791 12,538 12,006 12,445 14,060 14,053 14,055 14,140 13,374 12,875 12,936 12,181 12,333 10,983 10,437 9,721 14,034 10,389 9,195 9,000 8,000 Civilian - General Fund Civilian - Special Funds Sworn * Proposed Budget *Includes Recreation and Park and Library; Exclude Proprietary Departments: Harbor, DWP, and LAWA **Sworn includes General Fund and Special Fund positions ***Table includes Resolution Authorities authorized in the Adopted Budget but excludes subs and resos authorized after budget adoption

20 SPECIAL FUND MAXIMIZATION $51M The CAO and Mayor s Office carefully evaluated special funding sources and pursued opportunities to maximize their use (only if the special fund s long-term stability is not at risk). Examples of Special Fund Maximizations: General Services Maximizes the use of Gas Tax, Proposition C, Proposition 1B, and Street Damage Restoration Funds for fleet services and material testing in support of the City s 735 mile Pavement Preservation Program. Transportation Maximizes use of Proposition C, Traffic Safety Fund, Measure R and Gas Tax for transportation planning and infrastructure costs, crossing guard services and implementation of Measure R projects. Special Parking Revenue Fund Under the Fiscal Emergency Resolution, the Proposed Budget recognizes surplus monies for transfer to the City s General Fund.

21 NEW REVENUE $11M In general, the Proposed Budget takes a conservative approach to revenue projections and avoids reliance on speculative new revenue. Examples of New Revenue: Hiring of additional part-time traffic officers to ensure sufficient resources for traffic enforcement and to increase net revenue collected by $9 M. Increase Fire Department fees for industrial building and above ground inspections to generate more than $1 M. Increase Planning Department fees to achieve full cost recovery and generate $500k.

22 ONE-TIME SOLUTIONS $43.1 M Secures financing, through issuance of taxable, short-term notes (Commercial Paper) for: One-time Early Retirement Incentive Program payment Convention Center debt service payment Debt service on the short-term notes will be repaid over five years. Issuance of these notes is within established guidelines of the City s Financial Policies. Currently, the CAO reports that interest rates for CP taxable notes are extremely low ranging from 0.32% to 1.02%. Issuance of this debt will have no impact on the City s bond ratings.

23 PREVIOUS FOUR-YEAR OUTLOOK $5,600 $5,400 $5,307 IN MILLIONS $5,200 $5,000 $4,800 $4,600 $4,400 $4,200 $5,131 $4,937 ($548) $4,723 ($513) ($446) $4,759 ($350) $4,618 $4,491 $4,375 $4, Expenditures Revenue Source: CAO, Mid-Year Financial Status Report 3/18/11 *Assumes continuation of MCP and Police CTO funding ~ $121 Million Total

24 REVISED FOUR-YEAR OUTLOOK $5,600 IN MILLIONS $5,400 $5,200 $5,000 $4,800 $4,600 $4,400 $4,200 $5,200 $5,086 ($249) $4,931 ($311) $4,765 $4,951 ($304) $4,775 ($281) $4,627 $4,484 $4,375 $4, Expenditures Revenue Source: Proposed Budget Supporting Information for the Budget and Finance Committee *Assumes continuation of the Police CTO funding