City of Rialto Midyear Changes Budget-Fiscal Year 2013/2014 The mid-year review process is intended to address significant variances that are found and to make budget adjustment recommendations to Council. These recommendations are based on the results of staff analysis of revenues and expenditures for the first six months of the year, as well as, based on new information which was not available during the budget process. Key elements in the budget process that keep the budget document useful include: 1) the initial development of estimated revenues and appropriations; 2) interim monitoring; 3) one-time adjustments (i.e. grants, projects); 4) mid-year review; and 5) necessary modifications of budget appropriations and estimated revenues. Council Presentation – February 25, 2014

FY 13/14 General Fund Revenues

FY 13/14 General Fund Expenses

General Fund FY 13/14 Working Capital Revenue – Investment Earnings

Reserve Summary General Reserve Analysis Reserve Balance at 6/30/2013 Less - Non-spendable ($5M Receivable from Water Fund, $3.958M receivable from the Airport Advance, $111K Prepaid Expenses, 86K Inventory) (9.1M) Spendable Balance $39.0M Projected FY 2013-14 General Fund Deficit (3.1M) Projected FY 2013-14 Working Capital Fund Surplus .1M Projected 6/30/2014 Contingency Balance $36.0M 50% Contingency Reserve Requirement 33.3M Projected Available Fund Balance at 6/30/14 $2.7M

Midyear Adjustments – Special Revenue Funds Special Revenue funds show a increase of $3.2M mostly due to Development Impact Fees being received. Special Revenue funds project an increase in expenditures of $37K primarily due to a reduction in Housing Authority related expenses, offset by increases in Capital Budgets in the Waste Management and Measure I and Funds. Fund balances from Special Revenue funds are restricted and can be spent only for the specific purposes stipulated by external resource providers such as grants and development impact fees funds. Restrictions for using these types of funds may be changed or lifted only with the consent of the resource providers. Revenues: Development Impact Fees – $2.9M from projects such as DCT, Panattoni and Prologis Expenses: Measure I - $130K – To align with 5 year CIP plan Gas Tax – ($85K) – defer equipment purchase due to lack of staff to operate it Waste Management - $265K – $25K community Garden - $250K Bud Bender Park rehab Asset Forfeiture - $155K Housing Authority – ($613K) – CIP budget correction Net Increase - $37K

Midyear Adjustments – Enterprise Funds RUA performance will be presented in a separate report by RWS, however this Mid-Year report includes proposed reimbursements towards the Water Fund’s outstanding Perchlorate Litigation Loans as follows: $300K to the Waste Water Fund $100K to the General Fund

Proposed Staffing Changes Public Works Replace 2 Vacant Part Time positions with an Engineering Technician – ($12,872) Savings Development Services Add 3 months budget for Administrative Assistant to replace retiring Executive Assistant - $14,219 Finance Replace vacant Executive Assistant with Administrative Assistant – ($15,447) Savings Fire Department Replace vacant Office Specialist position with a Senior Office Specialist – ($1,230) Savings Mandatory OT Calculation Correction - $110,357 Police Department Add 2 Narcotics Officers - $53,840 Replace a Records Assistant II with a Lead Records Assistant – No Budget Impact Replace 2 Emergency Dispatchers with 2 Lead Emergency Dispatchers – No Budget Impact

Additional Vacancies that will result in Savings this FY Battalion Chief Fire Prevention Specialist Fire Captain 4 Firefighter Paramedic (2 Safer Grant) 5 Police Officers 2 Dispatcher Vacancies Crime Analysis Assistant Associate Civil Engineer Recreation Supervisor Total additions savings projected at $150-$200K

Future Budget Challenges CalPERS recently implemented a rate increase and plan on a $1M increase in FY14/15 and an additional increase of $500K in FY 15/16 Capital Project neglect Unfunded Liabilities CalPERS recently changed their actuarial assumptions resulting in rate increases that took effect as of July 2011. They also announced additional increases in the future years. These increases were delayed in the last two fiscal years to provide time to agencies to prepare for the impact. It is estimated that the increase will be significant in Fiscal Year 2012/13. Overtime costs in the Fire Department estimated overtime for the Fire Department is nearly $2.5 million.  With the current staffing levels and the continued use of the constant staffing model, the amount needed for overtime is expected to increase. However, if the City is awarded the SAFER grant that would help fund the positions of 8-9 Fire Fighter/Paramedic then overtime costs should reduce. Over the past few years, the City has continued to cut the Capital Projects budget in order to support operations. Eventually resources will need to be expended to replace aging facilities and equipment, or even greater costs will be incurred with maintenance and repairs. In addition to the General Fund losing $1.6M in annual Support from the General Fund as a result of the demise of the Redevelopment Agency on February 1, 2012, the City is also losing its ability to finance large capital and economic development projects. Utility Tax Sunset in June 30,2013 – In 2008, the voters of Rialto extended the Utility Users Tax (UUT) until June 2013. This revenue represents $11.2M or 21% of the general fund total revenues. Staff recommends that Council elect to place the renewal of the Utility Users Tax on the March 2013 special election ballot. If the UUT is not extended before the June 2013 deadline the General Fund deficit will grow to nearly $20M or 1/3 of the General Fund expenditures and immediate corrective action will need to take place. The immediate action will include the reduction of staff and programs citywide

Recommendation Consider Resolutions approving the 2013/14 Budget Adjustment for the City, Rialto Utility Authority and the Successor Agency formerly known as the Rialto Redevelopment Agency Consider the Resolution approving new Job Descriptions