. -J,.r1L- 21-11 PROPOSED BUDGET BUDGET AND REVENUE HGHLGHTS Miguel Santana City Administrative Officer Date: i to. [L Submitted in. Committee,-7 council File No: / l?,... & OV /7_... / tem No.-=,;;;.- Deputy: f&r-;{j
Reported Deficit at Mid-Year The Reported Deficit at Mid-Year was $28 Million Total 29-1 Deficit- $515 Million Revenue, $186 Resolved, D Revenue Expenditures Resolved Expenditures, $22 2
Estimated Deficit in the Proposed Budget The Remaining Deficit in early April 21 (Fourth FSR) is now $146 Million. A decrease from the prior estimate of $62 million. Total 29-1 Deficit- $515 Million Remaining Shortfall, $146 Resolved, $369 3
Budget Principals Reduce the structural deficit Protect core services Develop flexible funding strategy Rebuild the Reserve Fund Recognize new revenue. 4
ADOPTED CTY BUDGET FY1999- TO FY21-11 $8, -r-------------------------------------, $7,. - $6, +--------- -----------, $s,ooo rl ;p,o $4,827 1 $5,163 $5,388 $4, $3, $2, $1, $ ';:;c::, 9JOJ "Oj * Proposed Budget r;:;" s::; ';:;}, s::;" ';:; r:;::,t:::lr,; 'V ';:; s::;"j, b{,t;::,f\:) r;jo s::;, s::,co r;:;co General Fund Special Funds 9J g,ss f\:) 9Jf:;) t;::,!' "' 'V 5
CTYWDE POSTONS FY1999- TO FY21-11 4, "' '...,...,...11,..,u4 38,574 38,869 39,615 39,261 37,974 34,88 35,49 36,996 3, 2, 1, * Proposed Budget General Fund -Civilian Special Funds- Civilian Sworn 6
Full Year Savings from Continuation of Current Year Reductions Total of approximately $22 Million ERP Savings, $54 Position Eliminations, $33 Fire Deployment Plan, $39 Reduced Police Overtime and Other Savings, $9 7
21-11 Budget Solutions V a D@ @ a@ W o@ Ongoing Revenues, $154, 3% Cost Reductions, $216, 44% One-Time Revenue, $53, 11% Unpaid Days, $63, 13% 8
21-11 PROPOSED BUDGET Top Departmental General Fund Budget Reductions 29-1 21-11 Change Department Adopted Proposed Budget Budget Amount Percent PW/Bureau of Street Services 32,743,489 19,65,244 (13, 138,245) (4.1)% Cultural Affairs 9,599,452 7,221,127 (2,378,325) (24.8)% El Pueblo 2,11,597 1,535,857 (475,74) (23.6)% Emergency Management 2,48,959 1,564,626 (484,333) (23.6)% Aging 936,279 757,771 (178,58) (19.1)% PW/Board of Public Works 13,38,354 1,673,78 (2,364,574) (18.1)% General Services 214,151,765 179,261,398 (34,89,367) (16.3)% Disability 1,141,273 968,312 (172,961) (15.2)% PW/Bureau of Engineering 28,849,317 25,138,523 (3, 71,794) (12.9)% 9
21-11 Budget Unrestricted Revenues $3.63 Billion 52.% Recreation & Parks 6.8% Other 9% Fire 17.2% < Public Works Street Services Transportation Engineering Capital mprovements Building & Safety Planning 9.1% Unrestricted Revenues are 53.9% of the City Budget Restricted Revenues (46.1%) include Grants (except Police Dept), Se\/\18r, Solid Waste and Gas Tax Receipts. 1
21-11 Reserve Fund Balance on July 1st Loans and Loan Repayments (net) Early Reversion of Unencumbered Funds Miscellaneous Receipts Projected Reserve Fund Balance in Early April $121.2 (22.) 18. 166.8 $284. 11
ADOPTED RESERVE FUND AMOUNTS FY1999- TO FY2.1-11 $32===============---------------------------------------------- $2951==============---------------------------================= $27!============------------------------------============ - $245r====-------------------------------==== $22r==------------------------------== $195r-----------------------------L $17r--------------------------------- $145 r-------:;:-::-=---:;:-:-:=-=-----ru $12 $16 $12... $9 5 -r----------j $7...--...-- $45 $2 -$ 511 lt j t!!!-1!!!!1111!1111ljcljf.. --f!l!"".;1 S:l!:1 ' -, -, ' -"):),,..._, a:r:;:,"':j r:;:,c!> "Oj -,f:s r:;:,<:l fij)s " "' "' "' s: t::j q(s -,f:s -,f:s $j r:;:, 9/) r:;:, Emergency Reserve Contingency Reserve " ('to.* * - -"'' "'oj r:::,"- " ',) - "' "' '1' "" "' Anticipated Receipts * Proposed Budget 12 "'l.:>
Changes in Revenue Estimates General Fund Revenue * * Excludes transfer from Reserve Fund & parking-related structural asset - 21-11 Proposed Budget 29-1 Mid Year Revised 29-1 Adopted Budget - Actual 4.7 4.6 4.5 4.4. 4.3 īii 4.2 tit 4.1 4. 3.9 3.8 7 8 9 1 11 12 13 Fiscal Year Ending The budget anticipates General Fund revenue to pass the 28-9 level in 212-13. 13
-Four-Year Budget Outlook $5,4 $5,224 $5,2 $5,..-.... c r-1fll",. $ (432)1 $4,8 E.. - -. --- - $4,6 $4,4 $4,2 $(234) --c:;zia e - ;;: $4,339 $4, 365 s (342) $4, 751 $4,69 21-11 211-12 212-13 213-14 214-15 Revenue Expendtur esj 14
Mid-Year - Four Year Outlook $5,6 $5,4 $5,2 $5, $4,8 1: '=' $4,6 r- $4,845 $(78&) r- 47 $ L... A z - z... 7...- :r_. "':'.:.. -,.. -.. - -: Sf852) $5,514 L_ --- t.. "1. _-t. - S('f,.o? ) $4,4 $4,2 $(6'16) $4,32s--- $4,422/ 1 $C28) $4,214 $(.484) $4,132 - r $4,177, 285. $4, 29-1 Tot a l Deficit 29-1 Jan 21 21-11 211-12 212-13 213-1 4 [-+- Revenue--- ExpenCfitur 15
Four-Year Budget Outlook $5,4 $5,224 $5,2
Major Drivers of Expenditure Growth in the Four-Year Ou.tlook $25 ---------------------------------------- $2 -en s::: - - Ē - $15 $1 $5-1--l $- +------- 21-11 211-12 212-13 213-14 214-15 D LAGERS Pensions D Workers'Compensation D Health and Dental Benefits 17
ACTUAL CTY PENSON/RETREMENT CONTRBUTONS /o OF GENERAL FUND FY1999- TO FY21-11 $9 ---------------------------------------------------- $8 +------------------------------------------------- $7 +--------------------------------- ---; $6 +---- ---- - ------ ----1 $5 +---- ----------- -------: $4 -+------------------------------1 $3 +------ - -------1 $2 $1 $ * Projections " Sl " ex O:.Oj t\: :. co!' " 18
ACTUAL EMPLOYEE NSURANCE COSTS FY21-2 TO 212-13 $3 ---------------------------------------------------------------- $218 $25 $23 $29... $229 ::?* $2 O,.) =...4---- -a- $15 1 $1oo $5 $ $12 -... MO... $1 $18 $64 $7..-====-:= $34 $37 $41 $43 $44 $22 $23 $26 $28 $31 $52 $59....-- $51 ""'!' ');. #,...,...,!',...nv,... co 'b q " * n; " 'V n;, <:> ro co '); j-+-- Police--- Fire---...- Civilian! *Projected 19 ':::5 '); $58
21-11 Revenue Discussion Current Economic Climatic in the City High Unemployment Rate Sales Tax comparisons Property Tax - assessed values Hotel Taxes Documentary Transfer Tax 2
Economic Climatic City 1%, Sales Tax and Local Unemployment Rate Los Angeles County Unemployment Rate City 1% Sales Tax 14 5 12 45?/?. 1 4 en Q) s::::... C'S.Q :::... s:::: 8 35 Q) E >...Q 6 c. E Q) s:::: ::::> 4 >< 3.5 en C'S 25 U> 2 2 : 15 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 Fiscal Year Ending Continuing high unemployment is the biggest threat to the budget estimate. 21
u.s. Retail Sales %Change from Same Period Year Ago U.S. Retail Sales in $ Billions... CJ... 6% 4% 2% ;:.. -2% E g Q) 1 r:: CJ..r::?fl. -4% -6% -8% -1% 38 375 37 365 36 355 ffi * 35 345 34-12% r::.o... >.r::- 1. nl Q) nl a.cj :::..:S : Q).., u. :a: <( :a:.., <( en... > ""'.9 z g c CJ Q) w a.>-r::-s CJ : : 1.8 Q)... > -,u.:a!:<(:a:-, <(cn z r::.o =... CO C.O 5_>-C'S 1...., >a> (1JQ)""'<(nl:::...,:::Q).., u. :a:.., <( (/) 8 z g c c r::.... CJ Q) CJ..., u. 2 There is some encouragement from recent national retail sales. Nation-wide March sales are 7.1% above March 29, but still4.4% below the November 27 pre-recession peak. So far, the national numbers have not been tracking in California. 335 22
Comparison of State and City Sales Tax Receipts 31 12-Month Moving Sum 46 29 44 27 42-25 1 -- m j 23 +----- -- -- - 21 - - 1 -- - State Dept. of Finance (Left Scale) - City Tax Receipts (Right Scale) 1/) s::::: 4 :: ::!: 38 36 19 +-----------4---------------------------+------+ 34 1 2 3 4 5 6 7 8 9 Fiscal Year Ending City receipts are several months behind state receipts, but state receipts show signs of stabilizing. 23
Change in City Sales Tax Allocation by Quarter... 9% 1 ll 6%... Q) >. ;::: 3% D. %... Q) ':: ll :::l Q) -3% -6% E -9% ll (/) E -12% e '; -15% Cl ; -18%.J::. -21% -i u Actual Citywide Taxable Sales ex 29-1 Budget 27-8 28-9 29-1 -2% 21-11 -24% r-. r-. r-. r-. co co co co ) ) ) )...... z D. z D. z D. z ::::> ::::>.., w w ::::> w w ::::> w w en.., en.., en.., Quarter Ending............ c.. w w en The City's fiscal year sales tax revenue (July-June) is based on taxable sales between April and March. Actual 29-1 results were down 2% in the first taxable sales quarter (April-June 29); down 16% in the summer quarter; but 'only' down 6% in the Christmas Quarter. Even with average projected 5% growth in 21-11, cash receipts will be nearly 13% below the 27-8 level. 24
Property Tax Change in Assessed Value Actual AV for City of LA Assessor Est. for Countywide AV 16% l.. ctl E.:: QJ C) 1: ctl.t:. '*' 14% 12% 1% 8% 6% 4% 2% % -2% r---;e - - --... N... ui cri -... cri l.---.. 1.,.: rdl 1]f...-;; 11' N = ll. 1-1 ui.-- Sl cri..--!) ;:1 g;,.; "$. N - -4% - ----- -6% 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 Ending City Fiscal Year 25
City Hotel Tax Receipts 17 12-Month Moving Sum 15 r/) s::::: 13.2-11!\ :E cho of 9-11 ut, ' 9 ' _, 7 ' :vr One-time $1 8 million acceleration of tax collection. 5 +--+---------r--r--r---r-----+-----4-- 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 Fiscal Year Ending Hotel tax declined 8.2% in 28-9 and, even with some improvement in recent months, will still decline another 12.7% in 29-1. The projected 3% growth in 21-11 would produce $26 million less revenue than was received in 27-8. 26
- - Documentary Transfer Tax 12-Month Moving Sum 225 -- - -, - -- 1 - -. ---,----, - - --- - r - -.- - r -, - -- - 1 2 _ 175 -' 15 - -1 - - 1- - - - -1- - - 5l 125 1 - -r - - - -.,. - -- - r - ' 15 9o 75 5 _,_.j 25 -- - 69 7 71 72 73 74 75 76 77 78 79 8 81 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 Fiscal Year Ending Year-over-year revenue has been rising for the last four months. * Data prior to August 1991 adjusted for tax rate change. 27