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Home My WebLink About04/05/2016 09 2016 Budget Reduction Options xs .1 s. n. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Item No. 9. For Meeting of: April 5, 2016 ITEM TITLE: 2016 Budget Reduction Options SUBMITTED BY: Jeff Cutter, Interim City Manager Cindy Epperson, Director of Finance & Budget SUMMARY EXPLANATION: At the February 23, 2016 Council Study Session, we presented an updated Five -Year Financial Plan. This plan indicated that the 2016 revenue estimates previously included in the Adopted 2016 Budget will likely not come in as expected, resulting in an anticipated moderate shortfall of about $750,000 in 2016. In response to this anticipated reduction in General Government revenue, the Interim City Manager directed Department Heads to bring back proposals to reduce their 2016 budget. The attached report includes recommendations combining expenditure reductions and program fee increases to arrive at a net savings to General Government of $756,000. About $262,700 or 35% of the savings are from postponing new programs. ITEM BUDGETED: STRATEGIC PRIORITY: Public Trust and Accountability err APPROVED FOR SUBMITTAL: Interim City Manager STAFF RECOMMENDATION: Accept Report BOARD /COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type D 2016 mid-year budget reduction options 3/31/2016 Coyer Memo MEMORANDUM DATE: March 31, 2016 TO: The Honorable Mayor and City Council FROM: Jeff Cutter, Interim City Manager Cindy Epperson, Director of Finance & Budget RE: 2016 Mid -Year Administrative Budget Reductions At the February 23, 2016 Council Study Session, we presented an updated Five -Year Financial Plan. This plan indicated that the 2016 revenue estimates included in the Adopted 2016 Budget will likely not come in as expected, resulting in an anticipated moderate shortfall of about $750,000 in 2016, based on new revenue estimates compared to the budget. In response to this anticipated reduction in General government revenue, the City Manager directed Department Heads to reduce their 2016 Budget. The total targeted reduction for tax - supported funds (General Government) is approximately $750,000 or about 1.1% of the discretionary budget. We saw a downturn in some of the General Government revenues during 2015, which we are expecting to carry forward into 2016. Revenue sources are trending to come in below 2016 budget estimates primarily in the following areas: ➢ Sales Tax (General and Criminal Justice) ➢ Utility Tax The Department Directors were tasked to submit recommendations for sustainable budget reductions. The City Manager emphasized that budget reductions should be structured to minimize the impact on services to our citizens while maintaining the Council's priorities. There are portions of the General Government budget that either are fixed or paid for by fees specific to the service provided. We call these areas "non- discretionary" because when budget reductions are requested, these areas are exempted because we either are not able to lower expenses (i.e. Indigent Defense, debt service and utility tax transfers, the annual audit, and prior police pension obligations), or revenues would be reduced. For example, Utility billing services are reimbursed 100% by our internal utilities, so reductions to expense will also reduce revenue, making no net change to the General Fund reserve balance. The reductions are being implemented administratively by staff to maintain the relative balance between revenue and expenditures as authorized by Council in the adopted 2016 Budget. Page 1 2016 GENERAL GOVERNMENT MID -YEAR BUDGET REDUCTION OPTIONS Proposed Eligible Expenditure New % of Description Budget Reductions Revenue Emp's F/V Budget City Administration $ 5,565,092 $ 342,400 $ - 2.00 V 6.2% Human Resources 648,774 17,000 - 0.00 - 2.6% Legal 1,645,037 64,600 - 0.12 V 3.9% Municipal Court 1,427,119 - - 0.00 - 0.0% Finance 2,522,317 - - 0.00 - 0.0% Community Development 2,997,570 - - 0.00 - 0.0% Police 27,327,133 182,000 - 2.00 V 0.7% Fire 12,310,596 62,000 - 1.00 V 0.5% Engineering 833,710 60,000 - 0.86 V 7.2% Parks & Recreation 5,468,072 - 28,000 0.00 - 0.0% Streets 5,090,088 - - 0.00 - 0.0% Total General Government $ 65,835,508 $ 728,000 $ 28,000 5.98 1.1% (Discretionary programs) Total Budgetary Changes $ 756,000 F - Filled V - Vacant NON - DISCRETIONARY FACTORS Description Budget Indigent Defense $ 935,500 Transfers (primarily debt service and 4,839,545 utility tax allocations) State Examiner - audit 113,000 Police Pension 1,104,060 Utility Services (reimbursed by utilities) 1,466,163 Vacancy contingency (1,085,000) Total Non - Discretionary $ 7,373,268 Total 2016 Adopted General Government Budget $ 73,208,776 Page 2 GENERAL GOVERNMENT DETAIL City Administration Non- Pers onnel Personnel Reduction / Description Emp's $ Dec F/V $ Dec a. Neighborhood Partnerships Program 2.00 136,700 V 70,000 b. City Clerks - reduce temporary staffing budget - 5,000 V - c. Eliminate Citizen Survey - - - 34,000 d. Eliminate Employee Survey - - - 5,000 e. Reduction from State for DAY contribution - - - 37,700 f. Economic Development - sponsored events - - - 54,000 Total 2.00 $141,700 $ 200,700 Grand Total $ 342,400 F - Filled V - Vacant a. The Neighborhood Partnership Program was a new program included in the 2016 budget. We are proposing to defer this until the revenue picture stabilizes. b. The City Clerks office has $16,500 budgeted for temporary assistance in 2016. The actual utilization of temporaries in 2015 was about $10,000. This proposal is to reduce the temporary budget by $5,000 leaving $11,500 for temporary support. c /d. Because of the length of time it takes for new direction to be accomplished, by time we identify issues and create new plans of action, we are proposing to move both the Citizen and Employee surveys to a biennial time frame. e. The 2016 budget included a $133,000 donation to the DAY group through the State's Main Street Program. When we actually requested funding, we were only able to pledge $95,300, saving $37,700 in the 2016 budget. We will be receiving 75% of the $95,300 (or $71,475) in 2017. f. The Economic Development budget includes $526,200 for special events. We are proposing to cut $54,000 in this category. Page 3 Human Resources Non - Personnel Personnel Reduction / Description Emp's $ Dec F/V $ Dec a. Reduce Professional Services - external training - - - 17,000 Total 0.00 $ - $ 17,000 Grand Total $ 17,000 F - Filled V - Vacant a. The use of outside trainers /facilitators for City of Yakima University is being re- evaluated. Since we have a staff member trained as a trainer /facilitator, the outside professional services budget is proposed to be reduced by $17,000, going from $57,000 to $40,000. Legal Non - Personnel Personnel Reduction / Description Emp's $ Dec F/V $ Dec a. Eliminate Legal Assistant II (88% charged to Risk Mgmt) 0.12 8,600 V - b. Postpone the Prosecution Diversion program - - - 56,000 Total 0.12 $ 8,600 $ 56,000 Grand Total $ 64,600 F - Filled V - Vacant a. There has been a Legal Assistant II position vacant for over a year, and this is proposing to eliminate that position. It is currently funded 12% in General Fund, and 88% in Risk Management. The $8,600 listed here represents the 12% included in the 2016 General Fund budget. This elimination will also assist the Risk Management fund budget by $60,500. b. At the end of 2015, the diversion program arising from the study of the Community Court concept was added to the 2016 budget with an estimated cost of $56,000, which would have paid for the rent of the Seasons and a contract with People for People for program administration. The implementation of this program can be postponed until adequate resources are available. Page 4 Police Non - Personnel Personnel Reduction / Description Emp's $ Dec F/V $ Dec a. Eliminate 2 Police Officers 2.00 182,000 V - Total 2.00 $182,000 $ - Grand Total $182,000 F - Filled V - Vacant a. In 2013 the Yakima School District agreed to fund one sergeant to oversee the School Resource Officer (SRO) program. The City used that money to add one lieutenant's position in 2013, since we already had a sergeant working the SRO program. In the current 2015- 2016 contract, the School District defunded the School Resource sergeant position, resulting in a revenue reduction of about $73,000 in the adopted 2016 budget. The Police Department continued to maintain the sergeant's position, as there is still a need to maintain supervision over the seven officers assigned to the schools, and made cuts in other areas. Now, in response to the reduction in general revenues, the Police Department is proposing to suspend hiring of both Federal Task Force Officer positions added in the 2015 budget, since they have not yet been hired. During the suspension complement of officers assigned to assist federal law enforcement agencies is proposed to be reduced from 10 to 8. While the suspension of these positions may have some negative effect on our partnerships with Federal law enforcement agencies, it will have the least negative impact on the Departments overall public safety mission. Page 5 Fire Non- Pers onnel Personnel Reduction / Description Emp's $ Dec F/V $ Dec a. Eliminate Fire Code Inspector position after a retirement 1.00 42,000 V - b. Reduce outside consultants for Emergency Management - - - 20,000 Total 1.00 $ 42,000 $ 20,000 Grand Total $ 62,000 F - Filled V - Vacant a. A Fire Code Inspector is retiring this spring. The 2016 budget for the full year is $77,500 for this position. Currently, the Fire Department is "caught up" on performing the inspections. This program will be reviewed as we go into the 2017 budget, and a proposal to charge a fee for this service may be brought back at that time. For the near term the plan is to share the time of one building code inspector between building and fire inspections to keep the fire inspections moving forward. b. The Emergency Management program includes a professional service budget of $35,000. This proposal is to be frugal with bringing in expensive outside trainers, reducing that budget by $20,000 to $15,000. Engineering Non - Personnel Personnel Reduction / Description Emp's $ Dec F/V $ Dec a. Reorganization - net reduction of 1 Design Engineer 0.86 60,000 V - Total 0.86 $ 60,000 $ - Grand Total $ 60,000 F - Filled V - Vacant a. The Engineering Division has had a vacancy of a Design Engineer for over a year, with a second position vacated recently. The proposal is to do a reorganization that will eliminate one of the Design Engineer positions, but upgrade the second position. $60,000 is the expected savings from this change. Note: This proposal would eliminate one full position, however, 14% of the position is allocated to Water, Wastewater and Stormwater. Net General Fund savings are 86 %. Page 6 Parks Non - Personnel Personnel Reduction / Description Emp's $ Dec F/V $ Revenue a. Add fee to cover half of the Kissel Park Summer - - - 28,000 Playground program Total 0.00 $ - $ 28,000 Grand Total $ 28,000 F - Filled V - Vacant a. The Parks and Recreation division runs a 10 week summer playground program at Kissel Park. This program accommodates 100 children daily from 9:00 to 4:00, requiring 11 staff and costing $51,400. Currently there is only a one -time $20 administrative charge for this summer day camp program. This proposal is to share the cost of this program by instituting a fee of $300 per child for the entire 10 week program, which would cover approximately half of the cost of providing the program. Estimated revenue will be $30,000 compared to the $2,000 currently charged, or a net revenue increase of $28,000. Page 7