DRAFT FY 2014-2016 Resource Allocation Plan / Two Year Plan City of Sausalito DRAFT FY 2014-2016 Resource Allocation Plan / Two Year Plan “Investing in the Quality of Sausalito’s Future”

2. Department / CIP Discussions Agenda FY 2014-15 Budget 1. Budget Highlights 2. Department / CIP Discussions 3. Long-Term Financing 4. New Budget Format 5. Council Adoption

Strategic Budget Strategies Optimize revenues Cost streamlining for structural balance Maintaining reserves with risk-based analysis Linkages to Priority Calendar

Budget Highlights – Rebounding Economy Generating increasing tax revenues – both elastic and inelastic

CalPERS Pension Reform Paid off Side Fund Misc Side Fund liability of $413,515 and Fire Safety Side Fund liability of $1,333,859 Closed Tier 1 to new entrants,; and created Tier 2 for Classic employees; and created Tier 3 for PEPRA employees; Required Tier 1 employees to pay the Final Average Compensation – 1 Year premium of the Employer’s Contribution Share to achieve equity with Tiers 2 and 3. Lowered Pay Ranges PENSION REFORM SAVINGS 2013-14 2014-15 2015-16 Savings from Tier 2 40,444 46,720 48,063 Savings from Tier 3 45,480 52,639 54,834 Savings from EE paid ER Contributions 37,959 37,969 38,755 Interest Savings from Misc Side Fund Payoff 29,358 27,905 26,235 Interest Savings from Fire Side Fund Payoff 95,268 92,634 89,512 Total Annual Savings 248,508 257,868 257,398 763,774

Full Medical Cost OPEB 29 Current Retirees 36 Eligible Retirees Mean and Median Age grows Medicare Lowers premium Shifts portion of cost to retiree 31 Additional Eligible Retirees 17 employees converted from DB to DC 14 employees removed from eligibility for DB Mean and Median Age static Medicare premium static Shift of cost static

Budget Highlights – Labor Reform Generating significant savings of annual pension and retiree health benefit costs

Budget Highlights – Maintaining Reserve Funds

Budget Highlights – MLK NOI

Budget Highlights – Sewer Fund

Budget Highlights – Capital Improvements Continuing street improvements including concrete streets reconstruction Increased funding for small parks improvements Projected ferry terminal shoreside improvements from grant resources

Budget Highlights – Continuation of excellent city services: public safety, library, recreation, beautification, maintenance services

Priority Calendar Linkage Priority Calendar Section page 157 & 158 Department budgets

Summary Budget Highlights Operating Budget: Rebounding economy generating increasing tax revenues – both elastic and inelastic Labor cost reforms generating significant savings of annual pension and retiree health benefit costs Maintaining city reserve funds MLK capital purchase and capital improvements leases retired Adjusts sewer utility rates to keep pace with environmental projects that protect Richardson Bay and citizens from health hazards Continuation of excellent city services: public safety, library, recreation, beautification, maintenance services Capital Improvement Plan: Continuing street improvements including concrete streets reconstruction Increased funding for small parks improvements Projected ferry terminal shoreside improvements from grant resources Employs strategic use of long-term financing to accelerate sewer infrastructure projects

Current Budget Summary Yes, Current levels of service are adequately funded (stable) The budget is structurally balanced and sound (sustainable) Reserve balances sufficient funded based on a risk analysis and mitigation strategy (resilient); but… Significant additional infrastructure investment needed:

Long Term Financial Planning – Operating Budget Assumptions 3% annual wage inflation 5% annual health care inflation 11% average annual pension cost increase (worst case scenarios) Most expensive implementation of assumption changes Investment return @ 5th percentile) 2% general inflation 3.5% property tax inflation 4% elastic tax inflation

Long Term Financial Planning – Capital Budget

Capital Infrastructure Needs The City does not currently have the funds to adequately address critical infrastructure needs. Maintaining and Repairing 85-year-old Storm Drains Storm drains are completely deteriorated/rusted through Upgrades are needed to prevent pollutants, garbage and sediment from entering Richardson’s Bay Maintaining and Repairing Neighborhood Streets and Fixing Broken Sidewalks Deteriorating streets on steep hillsides create hazardous conditions Crowded sidewalks must be maintained for pedestrian safety and access for seniors and the disabled.

Proposal for Enhanced Revenues Sausalito constituents place a high value on maintaining the City’s fiscal stability and place a high priority on a number of key services. In order to improve essential City services that impact Sausalito’s quality of life, by a two-to-one margin a solid majority (61%) of constituents say they would be supportive of a potential temporary local sales tax measure to address community needs. ½¢ Sales Tax Measure should generate approximately $1 million annually

A Temporary Local Sales Tax Generates Local Funds for Local Needs Would ensure a guaranteed source of local funding to improve essential City services that cannot be taken by Sacramento Tax dollars would be spent locally for Sausalito residents With tens of thousands of tourists coming to Sausalito each year to shop, would ensure that out-of-towners pay their fair share for the strain they place on local services when they visit our city Is not applied to food purchased as groceries or prescription medication Recommended fiscal accountability provisions: Requiring independent financial audits with public review Including a sunset Requiring all funds to remain in Sausalito

Traditional Line-Item Activity & Performance Budget New Budget Format Item Detail Description Narrative description of purpose of department/division Ongoing Tasks Typical duties and responsibilities, by programmatic activity Strategic Plan How department/division participates in meeting the strategic plan goals and objectives Priority Calendar What are department/division Priority Calendar items Staffing Full-time equivalents (FTEs for full-time and part-time staff by position Performance Indicators Inputs, Outputs, Outcomes, Productivity, Efficiency & Effectiveness Indicators Department Revenues Revenues generated by / associated with departmental/divisional activities Department Expenditures Expenditures by major category Traditional Line-Item Activity & Performance Budget Budget Orientation Money Control Service Delivery Basic Budget Unit Line-Item Activity Results Measurement Budget Control Budget Control & Performance Measurement Budget Period Two year Multi-year

Why is the new format important? Establishes an accountability mechanism To the public for the governing body’s decisions To the policy makers for department manager performance Makes spending priorities for the next year(s) Determines actual service levels of programs Allocates funds and establishes responsibility for outcomes to particular organizational units Informs citizens of government policy and funding decisions and priorities Provides information on the costs and activities of government organizations Links long-term objectives with shorter term resource usage

Fiscal Transparency Tool www.sausalitoca.opengov.com

“Building on the Basics” Now that makes good cents!

Adopt Budget Approving the Appropriation Limit for FY 2014-15 Pursuant to Article XIII B of the California Constitution (Gann Limit) Establishing the Authorized Staffing Levels and Salary Ranges for All Permanent and Temporary Positions for Fiscal Year 2014-15 Approving the Budget for the 2014-15 Fiscal Year

Gann Limit

Authorized Staffing Levels

FY 2014-15 Budget

More Questions… “What if? Why not?”

Adopt Budget Approving the Appropriation Limit for FY 2014-15 Pursuant to Article XIII B of the California Constitution (Gann Limit) Establishing the Authorized Staffing Levels and Salary Ranges for All Permanent and Temporary Positions for Fiscal Year 2014-15 Approving the Budget for the 2014-15 Fiscal Year