R EVENUE D ISCUSSION F OLLOW U P & D IRECTION A GENDA I TEM 12.1 C ITY C OUNCIL M EETING A PRIL 20, 2016

C ITY F UNDING /R EVENUE S TRUCTURE BY D EPARTMENT G ENERAL F UND -A DMINISTRATION & G EN S UPPLIES & O VERHEAD -B UILDING & S AFETY -C ITY C LERK -C ODE E NFORCEMENT -C OMMUNITY S ERVICES (A DMIN ) -E CONOMIC D EVELOPMENT -E NGINEERING -F INANCE -P LANNING CFD*, CSA*, LLMD*, DIF* C OMMUNITY S ERVICES P ROGRAMMING, CIP, S TAFFING, O PERATIONS & M AINTENANCE, L IGHTING & L ANDSCAPING G AS T AX *, M EAS. A*, CFD*, LLMD*, DIF* P UBLIC W ORKS S TREET REPAIR & MAINTENANCE, ROW I MPROVEMENTS, P ROJECTS, CIP, S TAFFING, O PS. & M AINT., S TREET S WEEPING D EVELOPMENT F EES B UILDING & I NSPECTION E NGINEERING & I NSPECTION P LANNING & C OMMISSION *FUNDS CANNOT BE USED FOR POLICE OR FIRE PERSONNEL/CONTRACT COSTS

R EVENUE D ISCUSSION F OLLOW U P & D IRECTION O N A PRIL 6, 2016, T HE C ITY C OUNCIL WAS PRESENTED INFORMATION REGARDING C ITY ’ S G ENERAL F UND REVENUE GENERATING POSITION VS EXPENDITURES OVER THE NEXT 5 YEARS : (12) M AJOR R EVENUE GF ASSUMPTIONS:  NO VLF = $4.4M/YR (16/17*); $4.5M (17/18)** *88,000 POP ; **90,000 POP X $50  N EW H OME PRICES 3% +/ YR ($372,000)  A SSESSED VALUE + 1.5% EACH YEAR  500 NEW HOMES / YR  2.9 PERSONS P /SF DU  S ALES T AX REVENUE I NCREASE 8%/ YR  F RANCHISE F EES INCREASE 4%/ YR  B LDG P ERMITS : $4,200/ HOME ; $1.3M COM  P LAN C HECK R EVIEWS $2.5M/ YR  E NGINEERING, P LAN C HECK $1.5 M/ YR  TOT + 8%/ YR  A LL OTHER GF REVENUES + 5.0%/YR  C OUNTY A UGMENTATION : $1.0 M/YR ( SUNSETS IN FY 2018). (7) MAJOR EXPENDITURE GF ASSUMPTIONS  POLICE SERVICES 5 – 7 1/2%/YR ($11.4M) 19% + OVER THE PAST 3 YEARS ALONE … (NO ADDITIONAL OFFICERS)  FIRE SERVICES 5% PER YEAR ($8.3M) COUNTY 2-YR PROPOSAL FY16/17 ($9.46M) & FY17/18 ($9.975) (NO ADDITIONAL FIREFIGHTERS)  NO GF + IN STAFFING NO + CITY SERVICES 3 YR (CODE) ALL NEW STAFFING MOVED FROM GF OR REDUCED/COMBINED POSITIONS TO SAVE $  EMPLOYER’S PERS RATE 1% PER YEAR. CURRENT RATE OF 11.99%, FY  ELIGIBLE EMPLOYEES RECEIVE NORMAL 5% STEP UNTIL TOP STEP ~NO COST OF LIVING ADJUSTMENTS (COLA) TO EMPLOYEES IN CITY’S HISTORY ~WILL ATTEMPT TO + SALARY SCHEDULE W/CC STUDY 2016  NO NEW CAPITAL EQUIPMENT FROM THE GENERAL FUND – DIF FUNDED  TOTAL GF EXPENDITURES INCREASING 5.5%/YR

F INANCIAL F ORECAST 5 Y EAR P ROJECTIONS AGGREGATE $20 MILLION DEFICIT -$2,145,695 -$2,699,996 -$5,754,506 S TATUS Q UO =N O I NCREASE IN S TAFF /P UBLIC S AFETY OR S ERVICES S LOW G ROWING R EVENUES {P ROPERTY T AXES (3%), S ALES T AXES (8%), M ISC R EVENUE (5%)} N O N EW R EVENUE G ROWTH B ASE Annual Gap Current Year $34.4 M ILLION $36.3 M ILLION $29.6 M ILLION $30.5 M ILLION * County Augmentation Sunsets *Key Take-Away

NO V EHICLE L ICENSE F EE (VLF) R EVENUE – NOW $4,269,250* & RISING. 482 CA MUNICIPALITIES & ONLY M ENIFEE, W ILDOMAR, E ASTVALE & J URUPA V ALLEY ARE EXCLUDED FROM THESE FUNDS *FY2015/2016 ( BASED ON $50 PER / CAPITA ON POPULATION OF 85,385) NO CFD P UBLIC S AFETY R EVENUE – T HE FOLLOWING LOCAL CITIES HAVE CREATED CFD’ S FOR P UBLIC S AFETY ON N EW H OUSING D EVELOPMENTS : ✦ P ERRIS ✦ P ERRIS (2) (2001-3, $317/$63 P / DU ); ✦ **L AKE E LSINORE ✦ **L AKE E LSINORE (2) (2003-1, $373/$186 P / DU ); (2007-1, $477/$238 P / DU ); ✦ W ILDOMAR ✦ W ILDOMAR (1) (2013-1, $244/$173 P / DU ); ✦ S AN J ACINTO ✦ S AN J ACINTO (1) (2003-1, $473/$354 P / DU ); ✦ P ALM S PRINGS ✦ P ALM S PRINGS (1) (2005-1, $357/$300 P / DU ); ✦ D ESERT H OT S PRINGS ✦ D ESERT H OT S PRINGS (1) (PTAX-2, $277/$155 P / DU ) **F ASTEST GROWING C ITY IN R IVERSIDE C OUNTY NOT STUNTED BY CFD S NO W ATER, S EWER OR E LECTRIC U TILITIES - TO SHIFT EXPENSES FROM GENERAL FUND OR COMBINE W / RATER PAYER SERVICES S OURCES OF R EVENUE M ENIFEE D OES N OT R ECEIVE … R EVENUE D ISCUSSION F OLLOW U P & D IRECTION

R ECOMMENDATION FROM A PRIL 6, R ECEIVE PRESENTATION AND PROVIDE DIRECTION 2. A UTHORIZE THE C ITY M ANAGER TO ENGAGE CONSULTANTS AND / OR EXPERTS IN SUBJECT AREA TO DESIGN AND CONDUCT COMMUNITY OUTREACH EFFORTS, IN AN AMOUNT NOT TO EXCEED $50, D ESIGNATE THE P UBLIC S AFETY C OMMITTEE TO PROVIDE FEEDBACK AND GENERAL PROJECT GUIDANCE TO STAFF A S PER THE STAFF REPORT, THE C ITY M ANAGER WOULD RETURN TO C ITY C OUNCIL WITH REPORT DETAILING THE FINDINGS OF COMMUNITY SUPPORT FOR A SALES TAX BALLOT MEASURE FOR N OVEMBER COUNCIL APPOVED & DIRECTED 1. S TAFF TO RETURN AT THE NEXT C OUNCIL M EETING TO DISCUSS AND PROVIDE FOR A VOTE ON 3 OPTIONS, INCLUDING N OVEMBER B ALLOT OR S PECIAL E LECTION NEXT YEAR : S ALES T AX M EASURE ( GENERAL OR PUBLIC SAFETY ) & UUT M EASURE ); A LSO A PPROVAL FOR A CITYWIDE CFD FOR P UBLIC S AFETY THAT WOULD REQUIRE AN ORDINANCE TO FOLLOW 2. D ESIGNATE THE P UBLIC S AFETY C OMMITTEE TO PROVIDE FEEDBACK AND GENERAL PROJECT GUIDANCE TO STAFF MPT A UGUST M OTION

C ITY M ANAGER DRAFTED A MEMO THAT SUPPORTED MPT A UGUST ’ S REQUEST AND PRESENTED TO THE P UBLIC S AFETY C OMMITTEE. T HE C OMMITTEE RECOMMENDED THAT THE C OUNCIL DISCUSS AND APPROVE : 1. C ITYWIDE CFD FOR P UBLIC S AFETY ($516/$381) 2. 1% G ENERAL S ALES T AX M EASURE FOR N OVEMBER 8, 2016 BALLOT R EVENUE D ISCUSSION F OLLOW U P & D IRECTION A S PER THE C OUNCIL ON A PRIL 6, 2016, THE C ITY M ANAGER ENGAGED A CONSULTANT FOR, FM3, FOR $29750, WHICH HAS LED ME TO RECOMMEND THE FOLLOWING CHANGE TO THE REQUEST FROM MPT A UGUST : 1. D ISCUSS AND CONSIDER APPROVAL OF A CITYWIDE CFD FOR P UBLIC S AFETY ON NEW RESIDENTIAL DEVELOPMENT ( SINGLE FAMILY & MULTI FAMILY DWELLING UNITS ) ($516/$381) 2. C ONTINUE TO ASSESS OPPORTUNITIES FOR A BALLOT MEASURE PROPOSAL AND RETURN TO THE C ITY C OUNCIL ON M AY 18, 2016

N EW I NFORMATION FROM C ONSULTANT (FM3): 1. T IME IS NEEDED TO POLL THE COMMUNITY & GAIN VALUABLE PUBLIC OPINION : A. S EEK INFORMATION ABOUT WHAT IS MOST IMPORTANT : P UBLIC SAFETY C ODE ENFORCEMENT R OAD /S TREET R EPAIR I NFRASTRUCTURE P ROJECTS T RAFFIC S OLUTIONS E XPANDED /E NHANCED C ITY S ERVICES B. W HAT TYPE OF BALLOT MEASURE MAY BE SUPPORTED : 1% PUBLIC SAFETY SALES TAX | ½% PS S ALES T AX 1% G ENERAL S ALES T AX | ¾% | ½% U TILITY U SER T AX | W HAT % 2.FM3 WOULD PROVIDE FEEDBACK ON PUBLIC OPINION 3.FM3 WOULD PRODUCE BALLOT MEASURE LANGUAGE R EVENUE D ISCUSSION F OLLOW U P & D IRECTION

R EVISED R ECOMMENDATION, THAT THE C ITY C OUNCIL : R EVENUE D ISCUSSION F OLLOW U P & D IRECTION 1. D ISCUSS AND CONSIDER APPROVAL OF A CITYWIDE CFD FOR P UBLIC S AFETY ON NEW RESIDENTIAL DEVELOPMENT ( SINGLE FAMILY & MULTI FAMILY DWELLING UNITS ) ($516/$381) 2. C ONTINUE TO ASSESS OPPORTUNITIES FOR A BALLOT MEASURE PROPOSAL AND RETURN TO THE C ITY C OUNCIL ON M AY 18, 2016