November 28, 2011 FY12 Budget Update

GF 5-year Plan Update Initiated in FY09 to address structural deficit Planned use of $25 million of unallocated reserves to help minimize service level impacts Elimination of 286 (142 in GF) filled/vacant full- time equivalent positions through FY % reduction from FY09 levels Gross budget reduction of $23.1M 2

GF 5-year Plan Update Net budget reduction of $15.9 M with absorption of $4.1 of increases to pension and medical costs Reorganization of various departmental operations to improve efficiency (DOIT, MASH, Planning, PCDC) Actions taken to-date will result $150 M in cumulative cost avoidance through FY16 3

FY12 GF Budget by Department 4

GF Reductions Since FY09 Cummlative Changes FY09 - FY12 Department Personnel Non-Personnel Total City Council$0$127,375 City Clerk$260,023$0$260,023 City Attorney$483,715$190,966$674,681 City Manager$504,285$192,261$696,546 Finance$2,160,692$408,949$2,569,641 Fire$3,314,044$57,963$3,372,007 Human Resources$556,781$190,982$747,763 Human Services & Recreation 937,492.00$640,584$1,578,076 Planning$1,794,412$898,413$2,692,825 Police$3,504,084$49,955$3,554,039 Public Works$1,298,764$866,601$2,165,365 Transportation$196,100$671,538$867,638 Total General Funds Reductions$15,010,392$4,295,587$19,305,979 5

GF Rev & Exp History & Forecast 6

FY11 GF Results - Unaudited Revenues $3.3 million less than budgeted (rounded)  Property, sales, utility users, and other taxes primarily Expenses $2.6 million less than budgeted (rounded)  Personnel, services and supplies, and debt service primarily FY11 year-end deficit $6.1 million  FY11 budgeted deficit - $5.5 million  FY11 revised deficit presented during the FY12 budget process - $5.8 million 7

88 Use of Fund Balance Use of $21 million FY09 – FY11

99 Revised FY12 GF Budget Estimates

Addressing the $3.6 M Challenge Focus on structural revenue enhancements and cost reductions Results in programmatic adjustments 37 Recommendations categorized into three parts  Items recommended  Items not recommended  Items that require additional analysis to determine feasibility and true fiscal impact 10

Recommended Changes by Dept. 11

Items Recommended – 21 Items City Attorney/City Prosecutor 1.Operational reorganization - $224,250 / $64,750 City Clerk 2.Under-fill Asst City Clerk position with Deputy City Clerk position in the Official Records Division – $0 / $20, Estimated FY12 Fiscal Impact - $4.3 M / FY13 and beyond $4.5 M

Items Recommended – 21 Items Finance 3.Eliminate payroll checks/Statements of Deposit (require all employees to use direct deposit) – $0 / $31, Institute charge to agencies for issuance of conduit bonds ($15,000 for TEFRA hearing. For bonds transactions where the City is the conduit issuer.30% with a minimum $30,000) – $10,000 / $10, Restructure Pasadena First/Local Hire Program efforts resulting in the reduction of 1 filled FTE and 1 vacant FTE – $0 / $195,023  M-1 More aggressive Business Licensing compliance – $60,000 / $125, Estimated FY12 Fiscal Impact - $4.3 M / FY13 and beyond $4.5 M

Items Recommended – 21 Items Fire 4.Eliminate administrative captain position – $90,000 / $185,160 Housing 17.Reassign.5 part-time MASH position to non GF function – $14,438 / $28, Reduce Summer Rose Program stipend from $1,200 to $600 – $0 / $105,000  M-2 Misc Administrative changes – $23,500 / $0 14 Estimated FY12 Fiscal Impact - $4.3 M / FY13 and beyond $4.5 M

Items Recommended – 21 Items Human Services & Recreation 5.Reorganize of department responsibilities resulting in the defund two full-time vacant and two full-time filled positions – $185,160 / $441, Retool recreation program fees for service resulting in additional cost recovery – $100,000 / $300, Estimated FY12 Fiscal Impact - $4.3 M / FY13 and beyond $4.5 M

Items Recommended – 21 Items Planning 11.Merge Fire and Building inspection and reduce combined number of inspectors by 2 vacant FTE – $104,545 / $209, Implement a.25% General Plan Maintenance and Implementation fee on all permits – $0 / $312, Restructure work assignments resulting in elimination of 2 filled FTE one in the General Fund and one in the Building Fund – $63,166 / $126, Estimated FY12 Fiscal Impact - $4.3 M / FY13 and beyond $4.6 M

Items Recommended – 21 Items Police 6.Defund five vacant non-sworn positions: 1 Police Spec VI in Forensics; 1 Police Spec II in Records; 2 Security Rangers in Park Safety; and 1 Jailor – $200,000 / $441,460 Public Works 7.Lengthen tree trimming cycle for Slow Growing Trees – $38,000 / $38,000 9.Reassign responsibilities resulting in elimination of 1 filled FTE – $0 / $85, Managed Savings though restructuring of facility maintenance services - $17,500 / $17, Estimated FY12 Fiscal Impact - $4.3 M (FY13 and beyond $4.5 M)

Items Recommended – 21 Items Transportation 8.Reorganize department responsibilities, resulting in two filled FTE reductions - $0 / $257,000 Water & Power 19.Increase General Fund Transfer from Power Fund by 2% in FY2012 and 1% in FY $3,172,103 / $1,586, Estimated FY12 Fiscal Impact - $4.3 M (FY13 and beyond $4.6 M)

Additional Power Fund GFT Authorized by City Charter sections 1407 and 1408 Absent the additional transfer only $1.1 million of enhanced revenues and reductions will be realized in FY12 Additional transfer will also provide a cushion for further unanticipated revenue declines in FY12 19

Items Not Recommended – 9 Items Finance 20.Increase Parking fines/penalties by $20 - $0 / $350,000 Fire 24.Brown-out Fire Company when four or more absences occur - $846,618 / $1,693,235 Human Services & Recreation 25.Eliminate After School Programs at 12 sites - $0 / $1,197, Eliminate Flintridge Foundation Contract to serve as Institutional Home for Youth Violence Prevention $0 / $38, Estimated FY12 Fiscal Impact - $1.6 M / FY13 and beyond $5.3 M

Items Not Recommended – 9 Items Planning 27.Consolidate Community Planning & General Plan Sections resulting in the reduction of 4 filled FTEs - $0 / $478,331 Police 21.Hold five sworn positions vacant: 1 Police Corp in Patrol 2 Police Officers in Special Enforcement 1 Police Officer in Crimes against Persons 1 Police Officer in Crimes Against Property - $300,000 / $0 21 Estimated FY12 Fiscal Impact - $1.6 M / FY13 and beyond $5.3 M

Items Not Recommended – 9 Items Transportation 22.Return to stricter enforcement of parking regulations - $500,000 / $1,000, Solicit advertising on ARTS buses and/or website - $0 / $50,000 Misc. Departments 28.Expand use of contract services and reduce current staffing - $0 / $517, Estimated FY12 Fiscal Impact - $1.6 M / FY13 and beyond $5.3 M

Additional Study Items – 7 Items 29.Relocate staff from non-City owned facilities to reconfigured City Hall – $ Unknown  Misc. Departments 30.Adjust medical benefits to cover what is actually needed and used e.g. employee or employee and dependents and only allow employees to receive 25% - 50% of allocated amount for deferred comp - $ Unknown 23

Additional Study Items – 7 Items 31.Establish a benefits coalition for all represented group to standardize and control benefits costs - $ Unknown 32.Cap EOBF at current rate - $0 / $1,300, Employee pick up additional 1% of the employee PERS including safety employees - $0 / $775,000 24

Additional Study Items – 7 Items 34.New employees pay full 8% of PERS - $ Unknown M3 Parking Tax - $ $3  Transportation 25

Recommendations Reduce appropriated expenditures and fulltime equivalents in the various General Fund departments and programs; Adopt a resolution increasing the amount to be transferred from the Light and Power Fund to the General Fund for fiscal year 2012 from 8% of gross revenues to 10%, and direct staff to prepare future General Fund projections utilizing a 9% transfer rate; and, Adjust estimated revenues in the General Fund to reflect revised estimates based on the revenue decreases experienced in FY11 and the increased revenues anticipated from the recommendations outlined in this report 26