Philip A. Ginsburg, General Manager Derek L. Chu, Director of Administration and Finance. Tiffany Wong, Budget Manager, Administration and Finance

Transcription

1 Date: January 17, 2019 To: Through: From: Subject: Recreation and Park Commission Philip A. Ginsburg, General Manager Derek L. Chu, Director of Administration and Finance Tiffany Wong, Budget Manager, Administration and Finance Overview of Current Year and FY19-20 and FY20-21 Budgets Agenda Wording Presentation and discussion only of the Recreation and Park Department's budget for fiscal years and Strategic Plan Strategy 1: Inspire Public Space Strategy 2: Inspire Play Strategy 3: Inspire Investment Strategy 4: Inspire Stewardship Strategy 5: Inspire Our Team Background The City s FY19-20 and FY20-21 budget development process has begun. The following details the City s budget outlook, budget development process, and high-level overview of the department s current year budget, and initial planning for the Recreation and Park Department s FY19-20 and FY20-21 budgets. 1

2 City s General Fund Outlook The two-year outlook for the City s General Fund is mixed. While the Mayor s Budget Office is projecting that revenues will remain strong, with growth of $182 million next year and $466 the year after, the Mayor s Budget Office is also anticipating that expenditures will outpace the growth in revenue. Over the next five years, the Mayor s Budget Office estimates that revenues will increase by $758.7M while expenditures will increase by $1.4B. This presents the Mayor s Budget Office with an ongoing challenge as they contemplate balancing the budget. All told, the Mayor s Budget Office anticipates that there will be a $107 million General Fund shortfall next year and a cumulative deficit of $163 million the year after. To help address this deficit, the Mayor s Budget Office has asked General Funded departments to reduce their General Fund support by 2% in each of the next two fiscal years. To contain growth, the Mayor s Budget Office is also instructing departments to maintain budgeted employee levels at current year levels, unless the request for new positions aligns with the Mayor s priorities. Stability from Prop. B Department is not required to make 2% cut to its General Fund Support in each of next two fiscal years Department is budgeting $15 million in General Fund annually to support capital and deferred maintenance Is expected to use new revenue and year over year revenue increases to cover costs and enhance the budget As you know, Prop. B exempts the Recreation and Park Department from making the 2% cuts to its General Fund. In addition, the Charter language gives the department more control and flexibility in managing the budget process, and allows the department to budget at least $15 million in General Fund annually to fund capital and deferred maintenance. Additionally, the department is expected to use growth in General Fund revenue to cover costs and enhance the department s budget. Budgeting the Baseline The benefits of the baseline come with greater responsibilities. Department absorbs all cost increases and revenue changes within the baseline Budget assumes approximately 2.5% COLA on salaries in both years Health care assumed to increase by 6% both years 2

3 Current Year Budget in Context The department s total budget this year, FY18-19, is $230.9 million, comprised of $173.4 million in the operating budget and $57.5 million in the capital budget. The budget includes 947 budgeted and funded positions. Sources of Funding The amount of revenue in the department s budget defines how much the department can spend. The department s revenue budget consists of three major components: Open Space Fund continues to grow, making Open Space a vital source of funding for the department s operations. General Fund subsidizes a share of the department s costs to deliver services Earned Income supports department programs and facilities through various concession rentals and leases, recreation and permit fees, and other charges The department also utilizes bond funds and other grants and bequests to support capital projects. FY17-18 Budget FY18-19 Base Budget Open Space Fund $58.7 Million $76.0 Million General Fund Subsidy $73.4 Million $77.0 Million Earned Income $54.4 Million $57.5 Million Bond Funds and Other Grants $35.0 Million $20.4 Million Total $221.5 Million $230.9 Million Earned Income FY17-18 Budget FY18-19 Base Budget Garages/Paid Parking $8.2 Million $8.7 Million Program Fees $10.5 Million $11.2 Million Concessions & Citywide Rentals $10.7 Million $10.8 Million Permits & Facility Rentals $11.2 Million $11.8 Million Golf (Non-GF Revenue) $9.7 Million $10.8 Million Marina (Non-GF Revenue) $4.1 Million $4.2 Million Total $54.4 Million $57.5 Million 3

4 The department generates revenue from its property and resources to support operations. These resources include parking garages, recreation facilities and fields, special event venues, and other amenities in our parks. The Other category includes work order funding from other city departments such as the PUC and DCYF, voter approved bond funds, and gifts and bequests. Recreation and Park Department Resources by Program and Type The department allocates almost two-thirds of its operating budget to Park Maintenance including gardeners, custodians, urban foresters, integrated pest management staff, and capital projects and planning. The next two largest allocations are for Recreation & Aquatics at 15% and for Structural Maintenance at 12%. Administration accounts for 2% of the budget. The remaining slices include Park Safety at 3%, Marina Yacht Harbor and Zoo at 5%. FY18-19 Original Budget by Program $230.9M Park Safety $7.2M 3% Park Maintenance $142M 62% Marina and Zoo $11.6M 5% Recreation and Aquatics $34.4M 15% Structural Maintenance $27.6M 12% Volunteer Services $2.8M 1% Administration $5.3M 2% The department allocates 48% of its budget to staff salaries and benefits; 25% to Capital; 11% to fund work order services of other departments (Light Heat and Power, Sewer, Water, the City Attorney, Workers Comp, Technology, fuel and vehicle repairs); 10% to Non Personnel Services; and 3% to Materials and Supplies and Equipment. FY18-19 Original Budget by Account $230.9M Other $3.9M 2% Salary $77.6M 33% Fringe $34M 15% Non Personnel Services $23.6M 10% Work Orders $25.7M 11% Facility Maintenance $1.7M 1% Capital $57.5M 25% 4 City Grant Programs $0.6M 0% Materials and Supplies $6.3M 3%

5 Comprehensive Planning Guides the Budget The department developed, and the Commission has approved updated strategic, operational and capital plans. The department will use these plans and equity metrics to guide the development of the department s budget. Strategic Plan shall guide the department s work over each five-year period Operational Plan shall include the objectives and initiatives within the Strategic Plan that the department intends to undertake during the next budgetary period Capital Plan shall address the development, renovation, replacement and maintenance of capital assets, and the acquisition of real property Equity Metrics Budget Solutions The department is reviewing revenue leveraging opportunities to help fund enhancements in the department s operating budget. Early analysis suggests that there will be some growth in lease and concession revenue, program services, and the Open Space Fund. The department will also increase efficiencies to maximize service output. Revenue Enhancements Program revenue Open Space Fund Leases and concessions Expenditure Efficiencies and Savings Program and service delivery Utility usage Budget Outreach As the department moves through the budget process, the department will reach out to staff, stakeholders, the community, and the city s policy makers. Two community budget meetings Staff brown bag lunch R&P Commission meetings PROSAC meeting Park advocate meetings as requested 5

6 Budget Timeline The timeline for this year s budget process: January 17 January 30 February 4 February 5 February 5 February 7 February 21 June 1 Initial budget presentation to Commission Community budget meeting at Palega Community budget meeting at Upper Noe Staff budget brown bag Park, Recreation and Open Space Advisory Committee (PROSAC) Budget update at Commission s Operations Committee Commission considers budget Mayor s Office submits budget to Board of Supervisors Next Steps Department staff will continue to work with the General Manager and the executive management team to craft proposed FY19-20 and FY20-21 budgets. The proposed budgets will be submitted to the Commission for review and approval at the February 21 st Commission meeting. 6