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November 21, 2008 TO: Council President Peters An

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November 21, 2008 TO: Council President Peters An 601 OFFICE OF INDEPENDENT BUDGET ANALYST CITY OF SAN DIEGO MEMORANDUM DATE: November 21, 2008 TO: Council President Peters and Members of the City Council FROM: Andrea Tevlin, Independent Budget Analyst I/^AKJA^^ 0 - - I SUBJECT: Summary of Recommended Changes to the Fiscal Year 2009 Budget On November 24, 2008, the City Council will consider approving changes to the Fiscal Year 2009 Budget. The City Council Committee of the Whole and Budget and Finance Committee met jointly for public hearings on November 12, 2008 and November 19, 2008 on the Mayor's proposed budget amendments. The IBA issued Report 08-118, dated November 17, 2008, entitled "Recommended Actions on the FY 2009 Budget Adjustment Proposal" which describes additional information related to the Mayor's proposed budget amendments, and offers alternatives and options to the City Council for consideration. This memorandum provides a summary of the recommendations contained in that report to assist with the City Council's discussion on Monday, November 24, 2008. The IBA recommends approval of budget and service reductions in the Mayor's Budget Amendment Report, with exceptions to the reductions made to the Park and Recreation and Library Departments. In addition, further clarification and additional information is requested in other areas. In summary, the recommendations are as follows: Approve Items A through G, listed below and as discussed in IBA Report 08-118, as changes to the Mayor's original proposal. A. Library and Recreation Center Closures - Option 1 Defer a decision on Library branch and Recreation Center closures until a multi-year, comprehensive facility plan is brought forward to the City Council in early 2009. B. Explore options with the Mayor for the future use of the Library System Improvement Program Fund. C. Confirm that proposed Fire "rolling brown outs" is a temporary solution through FY 2009 by requesting a revision to the Five-Year Outlook to include associated costs in FY 2010 and beyond. Page 2 Council President Peters and Members of the City Council November 21, 2008 D. Confirm that the proposed reductions in Fire and Police Academy classes are a temporary solution through FY 2010 by requesting a revision to the Five-Year Outlook to include associated costs in FY 2011 and beyond. E. Request the Mayor to pursue a mandatory furlough for FY 2009 as well as FY 2010. F. Request the Mayor to consider an across-the-board user fee increase that could be implemented in FY 2009. G. Request the Mayor to explore increasing the fee associated with the Junior Lifeguard Program. The attached chart presents costs associated with recommended expenditures changes and possible resource options. Possible FY 2009 Mid-Year Budget Changes Expenditures Amount Defer Library Closures $1,700,000 Defer Recreation Center Closures $770,000 TOTAL $2,470,000 Possible Resources Reservoir Recreation BPR $240,000 Transient Occupancy Tax Surplus $2,400,000 Library System Improvements Fund $5,300,000 TOTAL $7,940,000 Other Options Not Recommended Waiver of Mission Bay Ordinance $4,900,000 1. CERTIFICATE NUMBER, nnnnn o REQUEST FOR COUNCIL ACTION (FOR AUDITOR'S USE O 601 UUUUU u CITY OF SAN DIEGO 11/24 TO: 2. FROM (ORIGINATING DEPARTMENT): 3. DATE: City Council Financial Management November 20, 2008 d. SUBJECT: Amend the Fiscal Year 2009 Budget S, PRIMARY CONTACT. (NAME, PHONE & MAIL ST A.) B. SECONDARY CONTACT (NAME. PHONE & MAIL ST A.) 7. CHECK BOX IF REPORT TO COUNCIL IS ATTACHED X Nader Tirandazi 236-6060 Angela Colton 236-5988 8.COMPLETE FOR ACCOUNTING PURPOSES 9. ADDITIONAL INFORMATION / ESTIMATED COST: FUND OEPT. ORGANIZATION OBJECT ACCOUNT JOB ORDER C.I.P. NUMBER AMOUNT 10. ROUTING AND APPROVALS ROUTE APPROVING DATE ROUTE APPROVING DATE {*) AUTHORJTY APPROVAL SIGNATURE SIGNED (#) AUTHORITY APPROVAL SIGNATURE SIGNED ORIGINATING 1 8 CFO DEPARTMENT / I 9 COO ·ffl^t^^Si) »/*/# 3 10 CITY ATTORNEY / F^y - 4 11 ORIGINATING DEPARTMENT 5 DOCKET COORD; COUNCIL LIAISON; 6 · C0SIDCIL '-' SP0 B '-' C0NSEN T .^-ADOPTION T. A^ X Fl REFER TO:" COUNCIL DATE: ( Fli/CtF ii. PREPARATION OF: x RESOLUTION{S) D ORDINANCE(S) · AGREEMENT(S) Q DEED(S) 1. Approve the Amendments to the Fiscal Year 2009 Budget as recommended by the Mayor 11 A. STAFF RECOMMENDATIONS; 1. Approve the requested action 12, SPECIAL CONDITIONS; COUNCIL DISTRICTFS): CITYWIDE COMMUNITY AREA(S): ENVIRONMENTAL IMPACT: THIS ACTIVITY IS NOT A PROJECT AND IS THEREFORE EXEMPT FROM CEQA PURSUANT TO STATE GUIDELINES. HOUSING IMPACT: OTHER ISSUES: CM-1472 MSWORD2003 (REV.3-1-2006) GO (R-2009-630) M i , RESOLUTION NUMBER R- DATE OF FINAL PASSAGE RESOLUTION OF THE COUNCIL OF THE CITY OF SAN DIEGO AMENDING THE FISCAL YEAR 2008-2009 BUDGET WHEREAS, the Council of the City of San Diego approved an annual budget for Fiscal Year 2009 on June 23, 2008 as Resolution No. R-303797; and WHEREAS, the Council of the City of San Diego adopted Ordinance No. 0-19774 entitled "An Ordinance Adopting the Annual Budget for the Fiscal Year 2009 and Appropriating the Necessary Money to Operate the City of San Diego for Said Fiscal Year"; and WHEREAS, the anticipated revenues appropriated in the'Appropriations Ordinance are inadequate to fund City operations through the end of Fiscal Year 2009. and a report regarding such matters was presented to City Council as Mayor's Report No. 08-166, Revised, Fiscal Year 2009 Budget Amendment Report, #08-166, dated November 5, 2008. with additional information contained in Addendum to Fiscal Year 2009 Budget Amendment Report, #08-0J 66, Transient Occupancy Tax (TOT) Fund Corrective Actions, dated November ] 0, 2008, and Addendum to Fiscal Year 2009 Budget Amendment Report, $08-0166, Corrected and Additional Information, dated November 11, 2008 [collectively, "Mayor's Report"]; and, WHEREAS, the Mayor's Report recommended the annual budget for Fiscal Year 2009 be amended; and -PAGE I OF 3- (R-2009-630) WHEREAS, The Independent Budget Analyst [IBA] has issued reports suggesting alternatives to the Mayor's Report in IBA reports entitled, Preliminary IBA Review of Mayor's -Tmpo-s^dFY2009~Budgetl4dJustmMtsTlBA^ Recopimended Actions on FY2009 Budget Adjustment Proposal, IBA Report No. 08-118, dated November 17,2008; and WHEREAS, the City Council Committee of the Whole and Budget and Finance Committee met jointly for public hearings on November 12, 2008 and November 19, 2008 on the Mayor's proposed amendments; and WHEREAS, the City Council at their Special Meeting on November 24, 2008 considered all of the comments and recommendations regarding amendments to the annual budget for Fiscal Year 2009; NOW, THEREFORE; BE IT RESOLVED by the Council of the City of San Diego that the amendments to the Fiscal Year 2009 Budget as detailed in Exhibit A are hereby approved. BE IT FURTHER RESOLVED, that the City Attorney is directed to work with Financial Management to prepare an amendment to the Fiscal Year 2009 Appropriation Ordinance. APPROVED: MICHAEL J. AGUIRRE, City Attorney "ence V. Tomanek Chief Deputy City Attorney LVT: 11-21-08 Or. Dept: FM R-2009-630 -PAGE 2 OF 3- (R-2009-630) I hereby certify that the foregoing Resolution was passed by the Council of the City of San Diego, at this meeting of , '·ELIZABETH'SrMALAND' City Clerk By Deputy City Clerk Approved: (date) JERRY SANDERS, Mayor Vetoed: (date) JERRY SANDERS, Mayor -PAGE 3 OF 3- NOV 1 9 2008 U 000005 THE: CITY OF S A N DIEGO OFFICE OF THE INDEPENDENT BUDGET ANALYST REPORT Date Issued: November 17, 2008 IBA Report Number: 08-118 Budget and Finance Committee Date: November 19, 2008 Item Number: 1 Recommended Actions onFY 2009 Budget Adjustment Proposal On November 5, the Chief Operating Otficer released the Fiscal Year 2009 Budget Amendment Report, which revealed a net current year deficit of $31,1 million based on iirsi quarLer revenue unci expeiiuituie projecuons, and proposed a series of budget anu service reductions in order to mitigate the anticipated shortfall. Some of the more significant service and budget impacts include closure of seven branch libraries, closure of nine recreation centers, reduction in police and fire academies and recruitment, and roiling reduction of two tire companies. These proposed budget and service reductions were discussed at the Special Joint Meeting of the Committee on Budget and Finance and City Council Committee of the Whole on November 12. At the November 12 meeting, the Mayor also released the updated Five-Year Financial Outlook for FY 2010 - FY 2014. The Five-Year Outlook painted a dire financial picture, with significant deficits projected in each of the next five fiscal years, including a $44.0 million deficit in FY 2010 and a $68.0 million deficit in FY20 11. In addition, it was discovered at the November 12 meeting that these projected deficits assumed that the budget and service reductions proposed for FY 2009 were maintained for the full five year period. As in prior years, the IBA will be providing a complete analysis of the Five- Year Outlook to the Budget and Finance Committee in January, as well as continue to monitor the current year budget status. However, the message is clear: the City of San Diego is facing serious financial strain. This report presents the IBA's recommendations with respect to the proposed budget and service reductions for FY 2009. Given the bleak financial outlook, decisive action must be taken immediately to begin addressing the budget shortfall. In all likelihood, the budget and service reductions proposed for FY 2009 will pale in comparison to the reductions that will be needed to close future budget gaps. Revisions to the proposed budget and service reductions should only be considered for the most critical public services. With this consideration, we recommend that identified resources be used only to defer closure of the seven branch libraries and nine recreation centers in FY 2009 until OFFice of Independent Budget Analyst 202 [Street, MS 3A*Son Diego, CA92101 Fe! (619) 236-6555 Fox (619) 236-6556 000006 a comprehensive plan is brought forward to Council.
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