1. Budget Process and Timeline
Presentation to the Commission
February 6, 2012

2. Overview City Budget Context City General Fund Deficit Projection
Mayor’s Budget Instructions
Current Arts Commission Budget – FY
Timeline 2

3. City Budget Context Two-Year Budget for all departments
Need to balance both years
Fixed two-year budget for Enterprise Departments
New Financial Policies
Increasing General Fund Reserve
Limits on use of one-time revenue
Five-Year Financial Plan
27 labor agreements expiring 3

4. FY 2012-13 & FY 2013-14 Shortfall Revenue
Local tax revenue improvement
Offset by loss of one-time revenue and state and federal funding
Expenditure Increases
Personnel-related expenditure increases (healthcare, etc.)
Loss of one-time savings from FY budget (expiration of furloughs) 4

5. FY 2012-13 & FY 2013-14 Shortfall FY 2012-13 FY 2013-14 19.7M 104.9M
Revenues/Sources
(282.4M)
(480.2M)
Expenses/Uses
(262.7M)
(375.3M)
Projected City General Fund Deficit 5

6. FY 2012-13 & FY 2013-14 Shortfall Continued economic recovery
UNCERTAINTIES
Continued economic recovery
Benefit cost growth (updated estimates in early 2012)
State Budget – Trigger Cuts, Redevelopment, Realignment
Current year overspending or supplemental appropriations
Labor Negotiations 6

7. Budget Instructions
5% reduction target each year, plus 2.5% contingency
Propose ongoing reductions and revenues equal to 5% of adjusted General Fund support for FY
Propose ongoing reductions and revenues equal to an additional 5% of adjusted General Fund support for FY
Provide an additional 2.5% contingency proposal for each year
Reduce General Fund FTEs by 1% in each year (Citywide) 7

8. City Budget Instructions
Prioritize core functions
Minimize service impacts
Seek and prioritize solutions such as:
Administrative efficiencies
Streamlining programs and operations
Revenue options
Consider independent reviews and audits
Review position classifications
Review and renegotiate contracts
Foster community engagement 8

9. Arts Commission Reduction TargetFY FY
$100,234
$200,468
5% Department Savings Target
(Ongoing funding)
$50,117
2.5% Contingency Target
(Ongoing funding or one-time funding) 9

10. Arts Commission Budget10

11. Arts Commission Budget11

12. Arts Commission Budget12

13. Arts Commission Budget

14. Calendar Key Dates and Next Steps
January Governor’s Budget Released
Jan 20 Deadline for Capital Budget Requests (submitted)
Feb 10 Program Budget Discussions
Feb 21 Budget Submissions & IT Projects Due to Mayor’s Office
Feb 27 Executive Committee Budget Review (public meeting)
Feb 28 Budget Presented to Staff
March 5 Full Commission Budget Review (public meeting)
May Governor’s May Revise
June 1 Mayor Proposes Balanced Budget
June Budget Committee Hearings (public meetings)
July Budget Considered at Board of Supervisors

15. Questions and Discussion
Clarifying questions
Strategy questions:
What is our core function?
How do we minimize service impacts to the community?
What are the general fund priorities?