OVERVIEW. Miguel A. Santana City Administrative Officer Proposed Budget April 27, 2016 OF THE PROPOSED BUDGET

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1 OVERVIEW OF THE PROPOSED BUDGET Miguel A. Santana City Administrative Officer

2 BUDGET SUMMARY is financially sound, maintaining core services while meeting City leaders commitment to fund the Homelessness Strategy. Fully complies with financial policies Uses continued revenue growth prudently Addresses obligatory funding requirements Continues core services Presents $138 million for homelessness Keeps the City within reach of eliminating the structural deficit.

3 BUDGET SUMMARY TOTAL PROPOSED CITY GOVERNMENT Appropriations ($ Millions) Authorized Positions I.Proprietary Departments Airports $ 5, ,862 Harbor $ 1, Water and Power $ 8, ,014 Total $ 14, ,875 II.General City Budget General Fund $ 5, ,854 Special Funds $ 3, ,225 Total $ 8, ,079 * ** III.Grants and other Non Budgeted Funds Total $ 1,395.8 *Sworn staff represents 59 percent of General Fund positions. **Regular positions. Grand Total $ 24, ,954

4 BUDGET SUMMARY Budget ($ Millions) Authorized Positions Budget Component Adopted Proposed Percent Change Adopted Proposed Percent Change General Fund $ 5,410.4 $ 5, % 22,572 22, % Special Funds $ 3,172.2 $ 3, % 10,004 10, % Total $ 8,582.6 $ 8, % 32,576 33, %

5 BUDGET SUMMARY CITY GENERAL FUNDREVENUE $7, Thousands $6,000 $5,000 $4,000 $3,000 Other Revenue ( 2.2%) Parking Users' Tax (2.4%) Documentary Transfer Tax (4.3%) Transient Occupancy Tax (7.0%) Sales Tax (3.0%) Business Tax ( 0.9%) Utility Users' Tax (1.0%) License, Permits, Fees, and Fines (1.9%) Property Tax (includes VLF) (6.5%) $111 million $247 million $648 million $200 million $520 million $502 million $634 million $2,000 $909 million $1,000 $1,788 million $ Fiscal Year Ending

BUDGET SUMMARY 2016 17 BUDGET UNRESTRICTED REVENUES ($4.67 Billion out of $5.56 Billion Total General Fund) Police 54.2% Library 4.5% Recreation & Parks 5.6% Fire 17.1% Unrestricted Revenues are 53.

6 BUDGET SUMMARY BUDGET UNRESTRICTED REVENUES ($4.67 Billion out of $5.56 Billion Total General Fund) Police 54.2% Library 4.5% Recreation & Parks 5.6% Fire 17.1% Unrestricted Revenues are 53.3% of the City Budget. Restricted Revenues (46.7%) include Grants (except Police Dept.), Sewer, Solid Waste, and Gas Tax City Attorney 3.0% Other 7.4% Public Works Street Services Transportation Engineering Board Contract Admin. Capital Improvements Building & Safety Planning 8.2%

7 FINANCIAL POLICY COMPLIANCE $350 ADOPTED BUDGETRESERVE FUNDPOLICY 5.79% 5.80% 7.00% $ % 5.37% 5.53% 6.00% Millions $250 $200 $150 $ % 3.28% 3.12% 2.76% 3.07% 3.33% 4.55% 4.23% 4.23% 4.79% 4.04% 2.91% $218 $261 $284 $313 $ % 4.00% 3.00% 2.00% $ % $ 0.00% Reserve Fund Adopted Budget Level Balance as Percent of General Fund

8 FINANCIAL POLICY COMPLIANCE $500.0 $450.0 $400.0 $350.0 ADOPTED BUDGETRESERVES (Reserve Fund, Budget Stabilization Fund, and UB Reserves) 7.06% 7.19% 8.72% 7.68% 10.00% 9.00% 8.00% 7.00% Millions $300.0 $250.0 $ % 5.55% 3.22% 4.05% 4.98% 6.00% 5.00% 4.00% $ % $ % $ % $ Emergency Reserve Contingency Reserve (Proposed) Budget Stabilization Fund UB Reserves Total Percentage of General Fund 0.00%

9 FINANCIAL POLICY COMPLIANCE $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $53 ONE TIME REVENUES VS. ONE TIME EXPENDITURES POLICY (Proposed Budgets) $103 $18 $35 $66 $83 $146 $88 $181 $110 $156 $156 $118 $121 $ One Time Revenues One Time Expenditures

10 FINANCIAL POLICY COMPLIANCE CAPITAL AND INFRASTRUCTURE FUNDINGPOLICY (Investment as Percentage of General Fund Revenue) $100.0 $ % 1.80% 1.60% $ % 1.40% $ % Millions $60.0 $50.0 $ % 1.06% 1.07% 1.00% 0.80% $30.0 $20.0 $ % 0.54% 0.21% 0.15% 0.15% 0.15% 0.60% 0.40% 0.20% $ (Proposed) 0.00% Total GF Capital Investment 1% Spending Level

11 CORE SERVICES: SUMMARY Police Overtime Budget at $90 million Four firefighter hiring classes at $17.3 million 2,400 lane miles for street resurfacing $31 million for sidewalks Expansion of the Clean Streets Program by one additional team (Total of $8.8 million) Maintain funding for graffiti abatement ($8.0 million) and tree trimming ($7.5 million) $7.5 million for job programs for former gang members, pursuant to settlement 503 regular positions added Homelessness commitment of $138 million

95 Police, 40 Recreation and Parks, 18 Others, 12 Building and

12 CORE SERVICES: NEW POSITIONS NET NEW POSITIONS BY DEPARTMENT (Total New Positions: 503*) Sanitation, 85 Library, 49 Planning, 43 Fire, 95 Police, 40 Recreation and Parks, 18 Others, 12 Building and Safety, 149 Animal Services, 12 * Includes net new and regularized positions.

13 CORE SERVICES: HOMELESS STRATEGY HOMELESS BUDGET FUNDING SOURCES AMOUNT (MILLIONS) FUNDING CATEGORIES AMOUNT (MILLIONS) General Fund $64.8 Departmental Special Funds $6.4 Affordable Housing Linkage Fee $20.0 City Properties $47.0 Total $138.2 Capital $67.0 Alternate Housing $35.1 Services $24.6 Administrative Implementation $11.5 Total $138.2

14 CORE SERVICES: HOMELESS STRATEGY ANTICIPATED HOMELESS BUDGET PROGRAMMATIC OUTCOMES More than 2,500 Rapid Re housing rental vouchers Approximately 1,500 annual shelter beds, 190 additional winter shelter beds, 32 sobering beds, & more than 500 annual domestic violence shelter beds Enhanced CES regional infrastructure Three outreach coordination sites Up to six Open Door Resource Centers providing storage, showers, and services At least 40 low income and/or homeless seniors provided job training and placement 4,000 spay/neuter certificates for low income/homeless pet owners Provide comprehensive workforce development training and job placement for more than 400 low income/homeless individuals Enhanced cleaning at 35 park restroom facilities and expanded bathroom access for sites serving homeless individuals More than 600 units of accessible affordable and permanent supportive housing constructed Outreach to 2,200 encampments prior to Sanitation clean ups Provide six comprehensive and twelve spot cleanings as part of Operation Healthy Streets

15 THE STRUCTURAL DEFICIT $6,100 FOUR YEAR BUDGETOUTLOOK (Proposed Budget) $6,084 ($100.6) $6,182 ($25) $6,157 $5,900 $5,868 $5,983 Millions $5,700 $5,558 $5,693 ($93) ($85) $5,783 $5,600 $5,500 $5,558 $5, Revenues Expenditures

16 THE STRUCTURAL DEFICIT IMPACT OF 0% PENSION INVESTMENT RETURN ASSUMPTION ON FOUR YEAR OUTLOOK $6,100 $103 Millions $5,900 ($25) ($4) $5,700 ($69) $5, Revenues Expenditures (0% Pensions Investment Returns) Expenditures (7.5% Pensions Invetment Returns)

17 THE STRUCTURAL DEFICIT 50.00% LACERS ANDLAFPP CONTRIBUTION RATES** 45.00% 40.00% 35.00% 39.07% 39.94% 44.40% 47.94% 46.51% 44.54% 45.03% 44.16% 45.62% 45.13% 43.09% 30.00% 25.00% 20.00% 24.71% 24.14% 25.33% 26.56% (Projected) 28.75% 28.16% 28.20% 28.75% 29.25% 29.45% 29.75% (Projected) (Projected) (Projected) (Projected) LACERS* LAFPP *Includes Tier 1 only. **Projections are based on an analysis by an actuary commissioned by the CAO.

18 THE STRUCTURAL DEFICIT $ $(200.0) CUMULATIVE FOUR YEAR DEFICIT BY YEAR OF OUTLOOK (Fiscal Years Included in Outlook) FY 11 ( to ) FY 12 ( to ) FY 13 ( to ) FY 14 ( to ) FY 15 ( to ) FY 16 ( to ) $(37.0) FY 17 Proposed ( to ) $(400.0) $(600.0) $(353.3) $(405.0) $(303.9) Millions $(800.0) $(1,000.0) $(1,200.0) $(1,145.7) $(1,053.8) $(1,400.0) $(1,600.0) $(1,479.5)

19 BUDGET CONCERNS In addition to the continuing structural deficit, the Proposed Budget poses the following challenges: Ongoing litigation Liability claims funding Pending labor contracts Limited UB Reserve for Mid Year Adjustments Need for dedicated homelessness funding stream

BUDGET CONCERNS: LIABILITY CLAIMS LIABILITY CLAIMS BY ACCOUNT (Based on Five Year Average) 2016 17 Proposed Account Name Budget Fire Liability Payouts $ 2,250,000 General Services Liability Payouts $

20 BUDGET CONCERNS: LIABILITY CLAIMS LIABILITY CLAIMS BY ACCOUNT (Based on Five Year Average) Proposed Account Name Budget Fire Liability Payouts $ 2,250,000 General Services Liability Payouts $ 1,000,000 Police Liability Payouts $ 30,750,000 Public Works, Engineering Liability Payouts $ 1,100,000 Public Works, Sanitation Liability Payouts $ 8,750,000 Public Works, Street Services Liability Payouts $ 8,500,000 Recreation and Parks Liability Payouts $ 1,150,000 Transportation Liability Payouts $ 4,200,000 Miscellaneous Liability Payouts $ 10,750,000 Total $ 68,450,000 * GENERAL FUNDLIABILITY PAYOUTS (Five Year Average; Millions) Dangerous Conditions / Trip and Fall, $9.6, 18% Civil Rights / Excessive Use of Force, $12.7, 23% Various, $5.7, 11% Traffic Accident, $11.8, 22% Employmen t, $14.2, 26% * Includes $60 million General Fund and $8.45 million Special Funds

Airports $ 5, ,889 Harbor $ 1, Water and Power $ 8, ,015 Total $ 14, ,903

Airports $ 5, ,889 Harbor $ 1, Water and Power $ 8, ,015 Total $ 14, ,903 Photo: Tom LaBonge Photo: Tom LaBonge City of Los Angeles 2016-17 Budget Overview City Administrative Officer July 30, 2016 Summary: 2016 17 Budget Budget at a Glance At a Glance TOTAL 2016 17 CITY GOVERNMENT