Financial Status Update & FY 2017-19 Proposed Biennial Budget May 23, 2017

Economic Conditions Recession ahead? New administration Some risks to State economy/ budget Leveling in some Santa Monica revenues

Major considerations Personnel Costs Retirement discount rate: 7.5% lowered to 7.0% Workers’compensation: $3.5M; 10% growth Medical premium increases Large Infrastructure Projects

Financial Status Update

Other Funds Status Self-Sustaining Wastewater, Water, BBB, Beach, Airport, Cemetery Watch/Adjust RRR Requiring Subsidy Pier, Housing

Proposed Biennial Budget FY 2017-18 FY 2018-19 Citywide $773.7M $802.1M Permanent Position Changes -3.8 FTE -5.0 FTE General Fund $504.9M $530.5M +3.4 FTE -4.0 FTE

Performance Management in Santa Monica 4/9/2019 Performance Management in Santa Monica Outcomes that benefit Santa Monica Goals that align with outcomes Track progress Deploy resources Modify programs to reach targets

Framework Outcome Areas

Capital Improvement Program Addendum to the FY 2016-18 Adopted Budget

FY 2017-18 Exception-Based Process Urgent changes that must meet CIP Priorities Health and Safety Federal or State regulations Maintain existing infrastructure Offsetting funding sources Urgent community priority Next Budget Cycle FY 2018-20 Biennial CIP Budget will complete an updated five-year capital improvement program plan

Major CIP Budget Increases City Services Building - $76.8 M (Bond financing) Affordable Housing Funding - $19.5 M (Redevelopment-related funding & settlement funds) Water, Wastewater and Stormwater Related Projects - $14.5 M Sustainable Water Infrastructure Project (State loan funding) Arcadia Water Plant Membrane Replacement (Water Fund) Clean Beaches Project (Stormwater Fund) Lincoln Blvd. Streetscape Improvements- $2.9 M (Transportation Impact Fee Revenues)

Citywide User Fee Study POLICY FOR MOST FEES 100% PUBLIC RECORDS, POLICE REPORTS COPYING per State law <100% BUILDING PERMIT FEES – SMALL RESIDENTIAL PROJECTS 50% ANIMAL CONTROL to encourage licensing and spaying / neutering 40% COMMUNITY AND CULTURAL SERVICES for access to community recreation and social services benefits 32%

Fee Study Summary 635 fees reviewed 40 new 89 reduced 14 significant adjustments 43 eliminated 58% cost recovery Staff recommendation: $1.4M ($1M General Fund)

Beach Parking Rates Central Beach, South Beach, North Beach lots Summer Weekday/Weekend Daily: $2 increase Winter Weekday Daily: $1 increase Winter Weekend Daily: $2 increase

Public Input and Next Steps Email councilmtgitems@smgov.net Giving public testimony May 23, 24 study sessions June 27 budget hearing and adoption Resources Proposed budget, staff report, fee study: Council Agenda website

City Council Expenditures $1.0M – General Fund Staffing: 1.0 FTE

City Manager Expenditures Staffing: 70.2 FTE Changes $12.1M – General Fund Staffing: 70.2 FTE Changes Senior Advisor on Airport Affairs Office of Civic Wellbeing

Records & Election Services Expenditures $2.6M – General Fund Revenues $0.5M – General Fund Staffing: 13.5 FTE

Police Expenditures Revenues Staffing: 434.7 FTE Changes: -1.0 FTE $85.9M – General Fund $1.6M – All Other Funds Revenues $18.5M – General Fund $0.3M – All Other Funds Staffing: 434.7 FTE Changes: -1.0 FTE

City Attorney Expenditures Staffing: 48.6 FTE Changes $11.4M – General Fund Staffing: 48.6 FTE Changes Code Enforcement & Criminal: +2.0 FTE

Public Works Expenditures Revenues Staffing: 558.3 FTE Changes $51.2M – General Fund $93.6M – All Other Funds Revenues $4.4M – General Fund $126.5M – All Other Funds Staffing: 558.3 FTE Changes Water Conservation Unit Water Neutrality Ordinance Ishihara Park Maintenance

Planning & Community Development Expenditures $34.5M – General Fund $0.5M – All Other Funds Revenues $56.6M – General Fund $7.0M – All Other Funds Staffing: 125.9 FTE Changes: Building and Safety/Permit Center reorganization – no net cost

Big Blue Bus Expenditures Revenues Staffing: 462.0 FTE Changes: $78.8M – Big Blue Bus Revenues $91.6M (Operating/Capital) Staffing: 462.0 FTE Changes: Strategic Reorganization Senior Administrative Analyst: +1.0 FTE – no net cost

Fire Expenditures Revenues Staffing: 137.0 FTE Changes $40.7M – General Fund Revenues $4.3M – General Fund Staffing: 137.0 FTE Changes Cadet Program: +1.0 FTE – no net cost Recruit Academy

Community Risk Reduction Successful Outcomes “Wellbeing” Haz Mat USAR / ARRF Prevention Community Risk Reduction Emergency Response EMS/Fire Dispatch Station Alerting Radio System Technology Strategic Plan Training Succession Deployment Performance Metrics PPE, Tools, & Equipment Personnel Facilities Apparatus

Housing and Economic Development Expenditures $5.8M – General Fund $24.1M – All Other Funds Revenues $6.7M – General Fund $28.4M – All Other Funds Staffing: 39.3 FTE Changes Housing Authority Subsidies Voucher Utilization Housing Outreach

Human Resources Expenditures Staffing: 29.2 FTE Changes $5.0M – General Fund Staffing: 29.2 FTE Changes Reorganization Benefits billing audits: +1.0 FTE Citywide Management Fellowship Program: +2.0 FTE

Library Expenditures Revenues Staffing: 112.5 FTE $12.9M – General Fund $38.0K – All Other Funds Revenues $0.4M – General Fund Staffing: 112.5 FTE

Information Services Expenditures Revenues Staffing: 52.0 FTE Changes $8.5M – General Fund $1.9M – Community Broadband Fund Revenues $36.5K – General Fund $2.1M – Community Broadband Fund $2.3M – Info. Tech. Replacement and Services Fund Staffing: 52.0 FTE Changes Cyber and data security: +1.0 FTE Technology training budget

Community And Cultural Services Expenditures $27.7M – General Fund $9.8M – All Other Funds Revenues $5.7M – General Fund $17.4M – All Other Funds Staffing: 166.9 FTE Changes: Beach Patrol and monitoring Childcare subsidies

Finance Expenditures Revenues Staffing: 79.0 FTE Changes $15.1M – General Fund $5.3M – Risk Management Funds Revenues $265.1M – General Fund $31.0M – Risk Management Funds Staffing: 79.0 FTE Changes Procurement analysis: +1.0 FTE – no net cost

Recommended Actions Receive the FY 2017-18 through FY 2021-22 Financial Status Update Receive City Departments’ presentations on the FY 2017-19 Proposed Biennial Budget Review and provide direction to staff on the FY 2017-19 Proposed Biennial Budget and FY 2017- 18 Proposed Capital Improvement Program (CIP) Budget Review and provide direction to staff on the recommendations of the Fee Study Report and proposed Beach Parking rates