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Home My WebLink AboutPH 3 1992-93 BUDGET 09-21-92PUBLIC HEARING N0. 3 AG E N DA9-0, - 9-21-92 1 )ATE:Inter-Com SEPTEMBER 16, 1992 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: WILLIAM A. HUSTON, CITY MANAGER SUBJECT: 1992-93 BUDGET RECOMMENDATION That the City Council approve the attached resolution adopting the 1992- 93 budget for all funds (except the Redevelopment Agency) and direct staff to: 1. Prepare an analysis of City fees and make recommendations concerning adjustments 'to cover the cost of the service provided. (1) 2. Prepare an analysis which identifies City services that can be provided more cost-effectively through contracts. 3. Revise the Three -Year Financial Plan based upon State imposed reductions in General Fund revenue. DISCUSSION The City Council conducted budget workshops and decided to delay adoption of the budget until the State budget was approved. With the recent adoption of the State budget, the City is now able to finalize its revenue estimates. The legislation implementing the State budget requires that property tax revenue for all cities be reduced by nine ( 9 ) percent using actual 1991-92 property tax revenue. The State also eliminated the cigarette tax subvention of $73,000; this amount was presumed to be lost when the draft budget was prepared. The reduction in property tax revenue is estimated to be $445,255. Both the State and County of Orange Auditor -Controller need to finalize the property tax loss, but this amount is close to what the final amount will be. The reduction in redevelopment funds 'is discussed in a separate memorandum concerning the Redevelopment Agency budget. ------------------------------------------------- (1) The recommendation concerning an analysis of City fees refers to those not included in the fee adjustments recommended through Public Hearing No. 2 on the September 21, 1992 City Council agenda. w 1992-93 Budget September 16, 1992 Page two The $445,255 loss in property tax revenue is permanent, and in addition to revenue lost to the State and State imposed fees starting in 1990-91. The cumulative amount of lost General Fund income due to State imposed jail booking and property tax collection fees; taking one-half of City traffic fine revenue and nine (9) percent of property tax revenue is approximately $1,065,000 per year. This amounts to 4.9% of projected 1992-93 net General Fund revenue. All State imposed fees and revenue lost to the State are reflected in the draft 1992-93 budget except for the $445,255 property tax loss. In July, staff had submitted recommendations to the City Council on how the budget could be adjusted to absorb the then -anticipated loss of $1,000,000 in property tax revenue. The July recommendation also included a $200,000 reduction in the July 1, 1992 beginning General Fund balance to reflect revised sales tax revenue projections. It still is not clear whether actual 1991-92 sales tax revenue is less than originally projected or if the State is not allocating the full amount to the City. Staff continues to feel it would be prudent to reduce the July 1, 1992 beginning fund balance by $200,000. Based upon the potential reduction in projected 1991-92 sales tax revenue of $200,000 and the $445,255 loss of property tax revenue in 1992-93, staff recommends that the following adjustments be made to the draft 1992-93 budget: 1. Transfer the expense for the Code Enforcement position in the Community Development Department to the Redevelopment Agency South -Central Project Area ($50,000). 2. Eliminate the vacant Switchboard Operator position in the Police Department ($23,000). 3. Reduce capital outlay expenditures ($50,000). 4. Reduce travel, meeting and travel accounts ($50,000) 5. Reduce consultant contracts ($100,000) The July report had also recommended a reduction in the transfer from the General Fund to the Park Development Fund from $684,600 to $284,600. Staff is now recommending that the $684,600 transfer be retained in the budget, resulting in a projected balance of $2,280,429 in the Park Development Fund. The total authorized expenditures in the attached resolution take into account the above recommendations. 1992-93 Budget September 16, 1992 Page three With the above reductions in expenditures, the revised projected July 1, 1992 beginning balance, and retaining the $684,600 transfer to the Park Development Fund, the 1992-93 budget will: • be balanced • have a projected June 30, 1993 ending balance of $3,688,765. • have a 16.11% reserve (City Council policy is a 15% reserve). The City is fortunate to be in a financial position to absorb the State imposedfees and reductions in revenue to date. However, it is realistic to assume that the State will initiate another round of reductions in City revenue through the 1993-94 State budget process. There are enough signals to indicate the State is not through absorbing City revenue. The recommendations in this memorandum are intended to enable the City Council to make long range financial decisions. Updating the Three -Year Financial Plan is essential because a one year budget does not portray the City's longer term financial position. For the City to continue to strive to be more cost-effective in delivering services, it needs to consider options for how services are provided. Staff will be prepared by early 1993 to submit to the City Council a revised Three -Year Financial Plan and a report on how to achieve greater cost-effectiveness in providing City services. WAH ZJ�4_� 9293budg.wah 1 2 3 4 5 6 7 8 9 10 11' 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION 92-109 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN CALIFORNIA, ADOPTING THE CITY BUDGET AND APPROPRIATING REVENUE OF THE CITY FOR THE FISCAL YEAR 1992-93. WHEREAS, in accordance with Section 1415h of the Tustin City Code, the City Manager has prepared and submitted to the City Council a Proposed Annual Budget for the 1992-93 fiscal year, beginning July 1, 1992; and WHEREAS, the City Council, as the legislative body of the City, has reviewed this proposed budget. NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve, determine, and order as follows: Section 1. A certain document on file in three (3) copies in the office of the City Clerk of the City of Tustin, being marked and designated "City of Tustin Draft Budget 1992-93". Said document, as prepared by the City Manager and reviewed and adjusted by the City Council, is hereby adopted for the fiscal year commencing July 1, 1992. Section 2. The following sums of money are hereby appropriated from the revenues of the City of Tustin for the purposes stated, during the 1992-93 fiscal year. GOVERNMENTAL FUNDS APPROPRIATION Operations/Transfers $ 26,704,783 Capital Improvements 91365,246 TOTAL APPROPRIATION GOVERNMENT FUNDS $ 36,070,029 WATER ENTERPRISE Operations $ 5,290,746 Capital Improvements 31155,495 Debt. Service 560,000 TOTAL APPROPRIATION WATER ENTERPRISE $ 9,006,241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED AND ADOPTED at a regular meeting of the City of Tustin, California, held on the 21st day of _ September , 1992. ATTEST: Mary E. Wynn, City Clerk Leslie Anne Pontious Mayor STATE OF CALIFORNIA) COUNTY OF ORANGE) SS CITY OF TUSTIN) CERTIFICATION FOR RESOLUTION NO. 92-109 Mary E. Wynn, City Clerk and ex -officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council is five; that the above and foregoing Resolution was duly and regularly passed and adopted at a regular meeting of the City Council held on the 21st day of September, 1992 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: ami tybdgt . 91 Mary E. Wynn, City Clerk