Overview of Proposed Budget

Transcription

1 Mayor Antonio R. Villaraigosa Overview of Proposed Budget April 20, 2011

2 Human Resources Benefits Expenditures FY05-06 to FY11-12 Total $401.3 $439.7 $466.5 $467.6 $505.3 $545.7 $555.4 $154.1 $800.0 In Millions $600.0 $400.0 $200.0 $120.6 $280.7 $131.2 $128.5 $127.7 $308.5 $338.0 $339.9 $131.0 $374.2 $155.7 $162.4 $390.0 $393.0 $ * Health Care and FLEX Worker's Comp *Proposed Budget Health Care and Flex includes Unemployment Insurance contributions and Employee Assistance Contributions

3 Historical General Fund City Contributions to Pension Systems** % of GF 12.14% 15.51% 16.61% 15.30% 16.16% 17.58% Total Contribution $479.3 $673.0 $737.0 $696.8 $710.7 $802.1 $322.8 $1,000.0 $800.0 $170.3 $ $190.1 $220.2 In Millions $600.0 $400.0 $107.5 $502.7 $ $520.6 $581.9 $371.8 $200.0 $ Pension Health **LAFPP and LACERS Source: CAO, 8/3/10 and 10/22/10 Council Presentation

4 Summary of General Fund Spending General Fund Appropriations $4,375,214,167 Less Departmental Receipts $333,351,420 Less Trans and Pension Payments $742,900,328 Less Benefit Payments (HRB Active employee benefits & WC) $559,131,165 Less Debt Payments (CAP Finance) $210,507,740 Less Liability Claims $48,520,000 Less Judgment Obligation Bonds $10,761,715 Less Water and Electricity $50,428,994 Less Mandatory Library and RAP Appropriations $220,863,004 Less "Non-discretionary" Special Fund, GCP, and UB $105,915,741 Subtotal $2,092,834,060

5 Subtotal $2,092,834,060 Less Police $1,094,397,299 Less Fire $350,842,367 Remaining GF $647,594,394 Remaining GF Operating Departments $566,577,144 Aging Disability Personnel Animal Services Emergency Management Planning Building and Safety Employee Relations Brd PW-Board CAO Finance PW-Con Ad City Attorney Ethics Dept PW-Engineering City Clerk GSD PW-Street Services City Controller ITA Transportation City Council Mayor Treasurer Cultural Affairs DONE Other UB, GCP and Other Special Fund Accounts $74,670,750 GF Capital Improvement Accounts $6,346,500

6 FY General Fund Revenue Sources The economy is showing signs of recovery from the recent recession. Estimated revenue growth is projected to be slightly ahead of the FY Adopted Budget. In Thousands Property Tax $1,408,529 $1,436,363 Licenses, Permits, Fees & Fines 778, ,272 Utility Users' Tax 654, ,832 Business Tax 411, ,219 Sales Tax 289, ,239 Power Revenue Transfer 257, ,000 Parking Fines 142, ,000 Transient Occupancy Tax 122, ,200 Documentary Transfer Tax 105, ,000 Parking Users' Tax 85,983 88,200 Remaining Revenue Sources 119, ,675 Total General Fund Receipts $4,375,215 $4,379,000

7 Revised CAO Estimated FY11-12 General Fund Deficit $ Billion Employee COLAS $122M, 36% Capital Program $38M, 11% Health Benefits, $24M, 7% 3 Pension Benefits $152M, 46% 2.5 Estimated General Fund Spending Estimated General Fund Revenue Estimated GF Deficit: $336.3 million

8 Final General Fund Deficit to Solve NOTE: The City s projected deficit for next year as last published by the City Administrative Officer (CAO) was $350 million. The CAO has revised this figure to $336 million. However, in order to get a complete picture of what the budget must solve for next fiscal year, it is necessary to start with an alternative, fully burdened projected deficit of $457.5 million. (millions) ($336.3) ($80.0) ($41.2) ($457.5) Revised CAO Estimated FY11-12 General Fund Deficit Remove Assumption that Negotiated Police OT Reduction Continues Remove Assumption that Fire Modified Staffing Continues Fully-Burdened Deficit to be Addressed by Budget

9 Overview of Budget Balancing Solutions New Revenue GENERAL FUND DEFICIT ($457.5) Fire Deployment Plan $53.7 LAPD Sworn Salary and OT Reductions $100.0 Special Fund Maximization One-Time Solutions Fire Deployment Plan Civilian Furloughs $93.4 Reductions and Efficiencies $105.3 Special Fund Maximization $51.0 Reductions & Efficiencies Police Sworn Reductions New Revenue $11.0 One-Time Solutions $43.1 Civilian Furloughs REMAINING DEFICIT $0.0

10 Budget Highlights Proposes Reserve Fund of $177 million (4% of General Fund) Continues Police Hiring to Attrition (9,963 officers) Expands Summer Night Lights Program from 24 Park Sites to 32 Sites Maintains Full Funding for Citywide Gang Reduction and Youth Development Services Restores Citywide Library Hours (6 days of service) Provides 735 Miles of Street Preservation Provides Funding for 50,000 new pothole repairs, a 20% increase from the prior year (from 250,000 to 300,000) Maintains Graffiti Abatement Program and Neighborhood Council program with minimal funding reduction (6.5% and 10%, respectively) Provides Full Funding for Emergency Management Continues Operations at 7 Animal Shelters Citywide Maintains Senior Meals Program

11 Fire Deployment Plan $53.7 M The new LAFD Deployment Plan replaces the Modified Coverage Plan (MCP) that has been in place since The Plan, developed using new deployment software, utilizes Fire Department dispatch data to model resource coverage based on response times, call frequency and incident types with each fire station district. This data-driven approach replaces the current rotating resource closures of the MCP with Fire company closures, redeployments, realignment of resources and flex staffing that refocuses emergency response to match the makeup and distribution of emergency call loads. Example: Reduces deployment of ladder trucks in South Los Angeles which has few structures taller than three stories and replaces them with additional ambulances to meet higher needs for emergency medical services The Plan redeploys 318 Sworn Firefighters and deletes these position authorities over three years. No Firefighters will be laid off

12 Police Sworn Salary and Overtime Reductions $100 M The Mayor s Proposed FY Budget: Maintains police hiring to attrition (9,963 Officers) Assumes $80M in overtime savings through management of compensated time off and deployment of sworn resources. Includes $20M in targeted savings through operational efficiencies Deletes 105 vacant civilian positions Provides funding for phase II of in-car video

13 Civilian Furloughs $93.4 M The City s long-term costs for pensions and healthcare are unsustainable. Employees must begin to contribute towards a greater share of these costs to ensure that benefits are available for current and future employees. A tentative labor agreement has been negotiated with the Coalition of LA City Unions, which includes an employee contribution of 4% of pay for retiree health benefits. The Agreement is pending ratification by union members and final approval by the City Council. Absent any final agreements, furloughs have been included in the Proposed Budget as a fiscally responsible measure to balance the budget (26 days for employees that will not receive cost of living increases and 36 days for employees that are scheduled to receive cost of living increases).

14 Long-Term Solution: Reducing the Workforce FY to FY Total 38,574 38,869 39,615 39,261 37,974 34,298 33,618 15,000 14,000 13,000 12,000 11,000 10,000 9,000 13,777 13,886 14,060 14,053 14,055 14,140 12,791 12,538 13,374 12,875 12,936 12,181 12,445 12,333 12,006 10,983 10,437 9,721 14,034 10,389 9,195 8, * General Fund - Civilian Special Funds - Civilian** Sworn (10-11: GF 13,649, SF 491) *Proposed Budget **Includes Recreation and Park and Library; Excludes Proprietary Departments: Harbor, DWP, and LAWA ***Table includes Resolution Authorities authorized in the Adopted budget but excludes subs and resos authorized after budget adoption

15 Reductions & Efficiencies $105.3 M Examples of Reductions Include: Elimination of 680 full-time positions 11% Reduction to Mayor s Budget & Examples of Efficiencies Include: 10% Reduction to City Council Budget Consolidation of Treasurer with the Reduction of Recreation and Parks Office of Finance Maintenance and Programs Transfer of Northeast San Fernando 15% Reduction to Cultural Affairs Animal Shelter to non-profit Grants Reduction of Outside Council Realignment of Crossing Guard Services Litigation Expenses 10% Reduction to Annual Appropriation Transfer of Lot Cleaning, Weed to Neighborhood Councils Abatement and Illegal Dumping from Elimination of General Fund Support Street Services to Sanitation for City Channel 36 10% Reduction to Homeless Shelter Implementation of Public Private Program Partnerships at five Cultural Affairs Continued Reduction of General Fund facilities by January 2012 Support for Capital Improvement Reduction of Unemployment Insurance Projects costs through the mitigation of layoffs

16 Special Fund Maximization $51 M Examples of Special Fund Maximizations: General Services Maximizes the use of Gas Tax, Proposition C, Proposition 1B, and Street Damage Restoration Funds for fleet services and material testing in support of the City s 735 mile Pavement Preservation Program. Transportation Maximizes use of Proposition C, Traffic Safety Fund, Measure R and Gas Tax for transportation planning and infrastructure costs, crossing guard services and implementation of Measure R projects. Special Parking Revenue Fund Recognizes surplus monies for transfer to the City s General Fund.

17 New Revenue $11 M Examples of New Revenue: Hiring of additional traffic officers to increase net revenue collected by $9 M. Increase Fire Department fees for industrial building and above ground inspections to generate more than $1 M. Increase Planning Department fees to achieve full cost recovery and generate $500k.

18 One-time Solutions $43.1 M Secures financing, through issuance of taxable, short-term notes (Commercial Paper) for: One-time Early Retirement Incentive Program payment Convention Center debt service payment Debt service on the short-term notes will be repaid over five years. Issuance of these notes is within established guidelines of the City s Financial Policies. Currently, the CAO reports that interest rates for CP taxable notes are extremely low ranging from 0.3% to 0.32%.

19 On-going Cost-Cutting Measures Sworn Pension Reform: In March, voters adopted a pension reform ballot measure for new public safety employees City is estimated to save $152 million over 10 years Healthcare Cost Reductions: In January, Labor and Management agreed on various changes to civilian employee benefits Ongoing cost of active employee healthcare will be reduced by $14 million Labor Negotiations: Tentative Agreement with Coalition of LA Unions, which represents 19,000 civilian employees, is pending ratification Agreement would increase employee contributions to retiree healthcare, suspend cash overtime, and delay cost of living adjustments Total savings estimated at $396 million over 4 years City is currently engaged in negotiations with other employee representatives in an effort to secure contract savings to eliminate furloughs and restore services