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CC 2016-06-14_12a FCFA Preliminary Budget TO: FROM: SUBJECT DATE: RECOMM It is recom Cities Fire FCFA rep IMPACT O The propo the City’s services f fire servic BACKGR Staff was provide C budget to Section 8 Items from Council m granted a public and Manual p voted on is heard b direction a a financia ANALYS The FCFA May 20, 2 CITY C DIANN STEVE T: CONS FIVE REGA JUNE MENDATIO mmended t e Authority ( presentative ON FINANC osed FCFA FY 2016-1 from FY 20 ces, and equ ROUND: s requested Council the o the City’s of the City m Appointed members a authority to d interests s rovides tha by a board by the board and/or input l impact to t IS OF ISSU A Board of 2016 meet COUNCIL NE THOMP E LIEBERM IDERATIO CITIES RDING TH 14, 2016 N: he City Co (FCFA) and e. CIAL AND A budget wil 7 Budget U 015-16. App uates to a c d to place t opportunity s FCFA rep Council Op d Boards an ppointed to make deci served by t at prior to a or committ d or commit t. The FCF the City of o UES: Directors re ing. The B MEMO SON, CITY MAN, FIRE N OF PRO FIRE A E FCFA’S uncil review d provide in PERSONN ll cost the C Update. Thi proximately cost per cap the FCFA p y to provide presentative perations M nd Committ o serve on sions in the he specific an item that tee that a m ttee, the item FA prelimina over $10,00 eviewed the Board was ORANDUM Y MANAGE CHIEF OVIDING IN AUTHORIT PRELIMIN w the prelim put and/or d NEL RESOU City $1,981, s reflects a 12% of the pita of $112. preliminary e input and e. This re Manual entitl ees.” regional a e best inter agency. S t meets ce member of t m should be ary budget i 00. e preliminary generally s ER NPUT AND TY (“FCF NARY BUDG minary FY 2 direction to URCES: ,217, which a net increa e General F . budget on d/or directio equest was led “Guidel and local b rest of the Section 8 of rtain criteria the City Cou e placed on item meets y budget fo supportive D/OR DIRE FA”) REP GET FOR F 2016-17 bu the City Co h has been ase of $121 Fund budge n the agend on regardin s made in ines for Co boards and City as we f the City Co a, which is uncil has be n the City C the criteria or fiscal yea of the budg ECTION TO PRESENTA FY 2016-17 udget for th ouncil’s app incorporate ,077 (7%) f et is allocat da, specific g the prelim accordance uncil Direct d committee ell as the g ouncil Oper scheduled een appoin Council agen a as it will re r 2016-17 a get and pro O THE ATIVE 7 e Five pointed ed into for fire ted for cally to minary e with tion on es are eneral rations to be ted to, nda for esult in at their ovided Item 12.a. - Page 1 PRELIMINARY FY 2016-17 BUDGET FOR FIVE CITIES FIRE AUTHORITY JUNE 14, 2016 PAGE 2 direction to staff to review the policy related to fund reserves, with an effort to build reserves over the next few years. As provided in the attached staff report to the FCFA Board of Directors, the preliminary budget reflects a number of assumptions, including but not limited to:  $66,400 first annual lease payment for replacement fire engine; $31,900 for Arroyo Grande  $50,000 grant match for Self Contained Breathing Apparatus (SCBA) replacements; $24,000 for Arroyo Grande  $25,000 increase in vehicle maintenance; $12,000 for Arroyo Grande  $11,000 increase in software licensing/support; $5,300 for Arroyo Grande  4% salary increase for IAFF-represented employees (working estimate as negotiations are ongoing); $55,400 for Arroyo Grande  $38,300 reduction in Workers Compensation premiums; $18,400 for Arroyo Grande  Continued pre-payment of CalPERS costs The SCBAs are required safety equipment and have reached the end of their useful life as mandated by OSHA. If the Authority is not successful in obtaining the grant, an additional $430,000 will need to be contributed by the three member agencies in order to replace the equipment. The City of Arroyo Grande’s share of this cost would be approximately $206,000 (48%). The City Council may want to provide direction to the appointed FCFA representative regarding this potential budget increase. The FCFA preliminary budget does not include the costs associated with fire dispatching, which is contracted to each member agency by the City of Grover Beach. The City’s budget does contain these costs and equate to $71,762. Should a unified agreement between FCFA and the City of Grover Beach be achieved, it is anticipated that the current payment from the City of Arroyo Grande to the City of Grover Beach would simply shift to FCFA with no net increase in cost. Other budget vulnerabilities include any cost increases associated with recommendations that might arise from the FCFA’s strategic planning efforts. In addition, the budget does not provide funding for equipment or apparatus replacements that will be required in the future. The estimated fund balance at the end of FY 2016-17 is $338,400, of which $55,000 was designated by the Board for future vehicle replacement needs. The undesignated fund balance reflects a reserve of approximately 8% of ongoing expenditures, as compared to the Board goal of a 15% reserve. The FCFA Board will consider adopting the FY 2016-17 budget at their June 17, 2016 meeting. Item 12.a. - Page 2 PRELIMINARY FY 2016-17 BUDGET FOR FIVE CITIES FIRE AUTHORITY JUNE 14, 2016 PAGE 3 ALTERNATIVES: The following alternatives are provided for City Council consideration: 1. Provide direction to the City Council’s representative to the FCFA Board; or 2. Provide direction to staff. ADVANTAGES: The City Council has the opportunity to provide input and/or direction on FCFA’s proposed budget to the Council’s representative on the Board. DISADVANTAGES: There are no disadvantages identified to receiving this information and providing input and/or direction to the Council’s representative on the Board. ENVIROMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Thursday, June 9, 2016. The Agenda and report were posted on the City’s website on Friday, June 10, 2016. No public comments were received. Attachment(s): 1. FCFA Preliminary Budget Item 12.a. - Page 3 STAFF REPORT TO: CHAIR AND BOARD MEMBERS FROM: STEPHEN C. LIEBERMAN, FIRE CHIEF DEBBIE MALICOAT, TREASURER SUBJECT: CONSIDERATION OF PRELIMINARY BUDGET FOR FISCAL YEAR 2016-17. DATE: MAY 20, 2016 RECOMMENDATION: It is recommended the Board of Directors receive and provide direction on the preliminary budget for fiscal year 2016-17. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The preliminary budget for fiscal year 2016-17 serves as a guideline to the budget to be adopted in June 2016. The preliminary expenditure total of $4,184,900 includes the addition of payments for the recently ordered fire engine, grant matching of 10% for Self Contained Breathing Apparatus (SCBA) replacements, an increase in vehicle maintenance and other minor adjustments. BACKGROUND: The proposed FY 2016-17 budget of $4,184,900 reflects changes to individual line item budgets based on staff’s review of the ongoing operational needs of the department and foreseeable one-time expenditures. Key assumptions included in the budget are as follows:  $66,400 first annual lease payment for replacement fire engine  $50,000 grant match for SCBA replacements  $25,000 increase in vehicle maintenance  $11,000 increase in software licensing/support  4% salary increase for IAFF-represented employees (working estimate as negotiations are ongoing)  $38,300 reduction in Workers Compensation premiums  Continued pre-payment of CalPERS costs Attachment 1 Item 12.a. - Page 4 FIVE CITIES FIRE AUTHORITY BOARD OF DIRECTORS PRELIMINARY BUDGET FY 2016-17 MAY 20, 2016 PAGE 2 After applying the allocation formula, the proportional share for each community has remained unchanged at 48% to Arroyo Grande, 33% to Grover Beach and 19% to Oceano CSD. Each jurisdiction’s contributions are as follows: FY 2015-16 FY 2016-17 Increase $ / % Arroyo Grande $1,846,134 $1,981,217 $135,083 / 7% Grover Beach 1,284,929 1,401,418 116,489 / 9% OCSD 754,337 779,965 25,628 / 3% As previously approved by the Board, a replacement fire engine has been ordered and lease purchase financing has been approved. The previous debt service related to truck 5 is now retired, therefore the payments Grover Beach and OCSD were making to Arroyo Grande will cease. Therefore, the net increase to each jurisdiction is reflected below: Increase $ / % Previous Debt Pmt Net Increase Arroyo Grande $135,083 / 7% $14,006 $121,077 / 7% Grover Beach 116,489 / 9% 11,544 104,945 / 8% OCSD 25,628 / 3% 5,772 19,856 / 3% Should there be no unforeseen major expenses in FY 2016-17 the Authority will have an ending fund balance of approximately $338,400, of which $55,000 is designated by policy for future vehicle replacement needs. The undesignated fund balance reflects a reserve of approximately 8% of ongoing expenditures. This is below the Board’s goal of a 15% reserve. Looking toward the future There are several changes that could occur that would result in amendments to the FY 2016-17 budget. First, the Authority’s long-term need for unified dispatching service is not addressed in the preliminary 2016-17 budget. Currently Arroyo Grande and Oceano independently contract with Grover Beach for dispatching services. The FCFA budget does not include these costs. It is anticipated that during the fiscal year, staff will move forward with a resolution to this issue, with a goal of shifting existing line item budget amounts from the member communities to the FCFA operating budget and contracting directly with the Grover Beach Police Department for dispatch services. Second, as the Board is aware, there have been recent efforts to prepare a strategic plan for the organization. Any recommendations or changes that arise as a result of the strategic plan are not anticipated in the current budget and may not be able to be accommodated without amending the budget. Attachment 1 Item 12.a. - Page 5 FIVE CITIES FIRE AUTHORITY BOARD OF DIRECTORS PRELIMINARY BUDGET FY 2016-17 MAY 20, 2016 PAGE 3 Lastly, the budget does not provide funding for equipment or apparatus replacements that will be necessary in the future. Should the Five Cities Fire Authority Assistance for Firefighters (AFG) grant application be denied (we should hear in the May/June timeframe), the SCBA inventory will need to be replaced during FY 16/17 at a cost of $480,000.00 as OSHA has defined equipment replacement requirements. The current fund balance may be sufficient to provide for the repair or replacement of an unanticipated equipment failure; however it is not sufficient to provide for either the emergency replacement for a fire engine, or the ongoing and recurrent need to replace equipment and apparatus. ALTERNATIVES: The following alternatives are provided for Board of Directors consideration: 1. Approve staff recommendation; 2. Do not approve staff recommendation; or 3. Provide direction to staff. ADVANTAGES: The preliminary FY 2016-17 budget provides for the immediate needs of the Authority. DISADVANTAGES: The preliminary FY 2016-17 budget does not provide for the long term needs of the Authority. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in accordance with the Brown Act on Tuesday, May 17, 2016, in front of the following buildings: Arroyo Grande City Hall, 300 E. Branch Street, Arroyo Grande; Headquarters ~ Station 1, 140 Traffic Way, Arroyo Grande; Grover Beach City Hall, 154 S. 8th Street, Grover Beach; Station 2, 701 Rockaway Avenue, Grover Beach; and Oceano Community Services District, 1655 Front Street, Oceano. The Agenda and report were posted on the Authority’s website on Tuesday, May 17, 2016. No public comments were received. ATTACHMENTS: Preliminary Budget Attachment 1 Item 12.a. - Page 6 Budget 2014 2015 Original Budget Amended Budget Estimated Actual 2017 Beginning Fund Balance 366,827$ 394,289$ 216,664$ 231,367$ 231,367$ 338,352$ Revenues 4,499,090 3,919,715 3,921,500 4,160,850 4,121,150 4,184,900 Expenditures: Salaries & Benefits 3,656,018 3,570,863 3,372,000 3,455,000 3,412,465 3,452,400 Services & Supplies 501,153 442,629 496,500 508,300 487,600 596,600 Equipment Replacement 314,457 69,145 53,000 101,500 114,100 69,500 Debt Service - 69,000 - 66,400 Total Expenditures 4,471,628 4,082,637 3,921,500 4,133,800 4,014,165 4,184,900 Prior period adjustment Change in Fund Balance 27,462 (162,922) - 27,050 106,985 - Ending Fund Balance 394,289$ 231,367$ 216,664$ 258,417$ 338,352$ 338,352$ Designated Reserve -$ -$ -$ 55,000$ 55,000$ 55,000$ Undesignated Fund Balance 394,289 231,367 216,664 203,417 283,352 283,352 Total Fund Balance 394,289$ 231,367$ 216,664$ 258,417$ 338,352$ 338,352$ Fiscal Year 2016 FIVE CITIES FIRE AUTHORITY BUDGET SUMMARY For the Fiscal Year Ending June 30, 2017 Actual PRELIMINARY BUDGET Attachment 1 Item 12.a. - Page 7 BUDGET ACT ACCOUNT NAME 2014 2015 Original Budget Current Budget 2016 Estimated 2016 2017 2017 Budget vs 2016 Amended Budget REVENUES 4301 INTEREST 155$ 733$ -$ 700$ 1,400$ 700$ - 4422 ARROYO GRANDE FIRE REIMBURSEMENT 1,551,420 1,582,448 1,846,134 1,846,134 1,846,134 1,981,217 135,083 4443 GROVER BEACH FIRE REIMBURSEMENT 1,206,660 1,230,793 1,284,929 1,284,929 1,284,929 1,401,418 116,489 4444 OCEANO FIRE REIMBURSEMENT 709,520 723,710 754,337 754,337 754,337 779,965 25,628 4458 STATE GRANT 254,970 - - 4,318 4,318 - (4,318) 4491 SAFER GRANT 535,327 100,089 - - - - - 4462 LOCAL GRANT 47,598 - 9,332 9,332 4726 FIRE IMPACT FEES 4,116 4,220 500 500 500 1,000 500 4729 FIRE-FIRST RESPONDER SUPPORT 21,231 21,619 20,600 20,600 20,600 20,600 - 4730 FIRE-STRIKE TEAM REIMBURSEMENT 147,191 171,977 - 144,000 144,000 - (144,000) 4803 SALES-EQUIPMENT/MATERIALS - 12,000 24,000 4807 EXPENSE RECOVERY 68,500 36,528 15,000 15,000 31,600 - (15,000) 4816 PROCEEDS FROM DEBT ISSUANCE - 69,000 GRAND TOTAL REVENUES 4,499,090$ 3,919,715$ 3,921,500$ 4,160,850$ 4,121,150$ 4,184,900$ 114,382$ Actual Current Year Budget Activity FIVE CITIES FIRE AUTHORITY PRELIMINARY BUDGET For the Fiscal Year Ending June 30, 2017 Attachment 1 Item 12.a. - Page 8 BUDGET ACT ACCOUNT NAME 2014 2015 Original Budget Current Budget 2016 Estimated 2016 2017 2017 Budget vs 2016 Amended Budget Actual Current Year Budget Activity FIVE CITIES FIRE AUTHORITY PRELIMINARY BUDGET For the Fiscal Year Ending June 30, 2017 EXPENDITURES 5101 SALARIES FULL-TIME 1,231,330 1,285,796 1,560,500 1,560,500 1,235,700 1,615,900 55,400 5102 SALARIES PERMANENT PART-TIME 21,650 1,750 42,100 42,100 20,600 43,900 1,800 5103 SALARIES TEMPORARY PART-TIME 403,254 352,662 368,000 368,000 370,400 368,000 - 5105 SALARIES OVERTIME 364,216 463,755 189,300 189,300 373,200 201,800 12,500 5106 SALARIES - STRIKE TEAM OVERTIME - - - 88,000 87,200 - - 5108 HOLIDAY PAY 62,551 70,202 61,600 61,600 71,865 64,200 2,600 5109 SICK LEAVE PAY 30,122 45,684 - - 51,300 - - 5110 ANNUAL LEAVE BUY BACK 6,300 6,393 7,000 7,000 3,600 7,000 - 5111 VACATION BUY BACK 17,916 42,800 40,000 40,000 36,800 40,000 - 5112 SICK LEAVE BUY BACK 4,209 2,557 4,000 4,000 2,800 4,000 - 5113 VACATION LEAVE PAY 30,966 23,866 - - 49,600 - - 5114 COMPENSATION PAY 26,623 34,221 - - 39,100 - - 5115 ANNUAL LEAVE 4,659 10,016 - - 18,200 - - 5121 PERS RETIREMENT 417,332 447,843 448,200 448,200 423,100 487,400 39,200 5122 SOCIAL SECURITY 147,369 162,048 144,200 144,200 155,500 149,400 5,200 5123 PARS RETIREMENT 5,435 4,250 6,200 6,200 5,400 6,200 - 5126 STATE DISABILITY INS. (SDI)15,418 15,540 10,800 10,800 13,700 11,300 500 5127 DEFERRED COMPENSATION 905 1,895 3,000 3,000 2,500 3,000 - 5131 HEALTH INSURANCE 201,435 259,022 300,300 300,300 299,400 300,300 - 5132 DENTAL INSURANCE 20,157 20,616 20,800 20,800 21,300 20,800 - 5133 VISION INSURANCE 4,382 4,609 5,200 5,200 5,100 5,200 - 5134 LIFE INSURANCE 1,920 2,134 2,400 2,400 2,300 2,400 - 5135 LONG TERM DISABILITY INSURANCE 6,084 6,722 8,400 8,400 7,300 8,400 - 5136 RETIREES HEALTH INSURANCE 5,121 5,163 - - 6,700 6,500 6,500 5141 WORKERS COMPENSATION 80,077 106,262 139,300 139,300 101,800 101,000 (38,300) Attachment 1 Item 12.a. - Page 9 BUDGET ACT ACCOUNT NAME 2014 2015 Original Budget Current Budget 2016 Estimated 2016 2017 2017 Budget vs 2016 Amended Budget Actual Current Year Budget Activity FIVE CITIES FIRE AUTHORITY PRELIMINARY BUDGET For the Fiscal Year Ending June 30, 2017 5142 UNEMPLOYMENT INSURANCE 6,270 46,827 5,000 5,000 7,500 5,000 - 5143 UNIFORM ALLOWANCE 4,512 3,249 5,000 - - - - 5147 EMPLOYEE ASSISTANCE PROGRAM 479 913 700 700 500 700 - Subtotal Salaries & Benefits 3,120,692 3,426,795 3,372,000 3,455,000 3,412,465 3,452,400 85,400 5201 SUPPLIES - OFFICE 6,979 8,482 7,000 7,000 7,000 7,000 - 5206 SUPPLIES - EMS 5,497 8,770 8,000 8,000 8,000 10,000 2,000 5208 POSTAGE/MAILING 1,550 2,637 1,800 1,800 1,800 1,800 - 5255 SPECIAL DEPARTMENT SUPPLIES 18,157 24,472 20,000 20,000 20,000 20,000 - 5272 PROTECTIVE/SAFETY CLOTHING 22,359 19,094 35,000 44,300 44,300 40,000 (4,300) 5273 SMALL TOOLS 1,714 1,868 3,000 3,000 3,000 3,000 - 5301 ADVERTISING 396 325 1,000 1,000 1,000 1,000 - 5303 CONTRACTUAL SERVICES 185,088 84,457 101,000 101,000 101,000 109,000 8,000 5306 PRINTING SERVICES 1,895 3,015 5,000 5,000 5,000 4,000 (1,000) 5315 PRE-EMPLOYMENT PHYSICALS 1,645 2,172 5,000 5,000 5,000 9,200 4,200 5316 JOB RECRUITMENT EXPENSE 74 237 2,000 2,000 2,000 2,000 - 5324 FORENSIC MANDATE SERVICES 1,759 789 3,000 3,000 3,000 1,800 (1,200) 5325 HAZMAT/SAFETY PROGRAM 3,000 4,329 15,500 15,500 15,500 15,500 - 5401 UTILITIES 35,332 40,553 38,000 38,000 38,000 40,000 2,000 5403 TELECOMMUNICATIONS 11,440 16,397 20,000 20,000 20,000 30,000 10,000 5501 CONFERENCE/TRAINING 18,181 17,294 13,500 13,500 13,500 12,000 (1,500) NEW TRAVEL - - - - 3,000 3,000 5503 MEMBERSHIPS & SUBSCRIPTIONS 2,862 2,532 3,700 3,700 3,700 3,700 - 5504 PUBLIC RELATIONS 6,414 3,835 6,000 8,500 8,500 6,000 (2,500) 5508 MISC EXPENSE 2,334 3,324 2,500 2,500 2,500 2,500 - 5553 RENT-BUILDING AND LAND 15,000 15,000 15,000 15,000 15,000 15,000 - 5555 BANK CHARGES 45 300 300 300 300 - Attachment 1 Item 12.a. - Page 10 BUDGET ACT ACCOUNT NAME 2014 2015 Original Budget Current Budget 2016 Estimated 2016 2017 2017 Budget vs 2016 Amended Budget Actual Current Year Budget Activity FIVE CITIES FIRE AUTHORITY PRELIMINARY BUDGET For the Fiscal Year Ending June 30, 2017 5576 LIABILITY INSURANCE-JPA SHARE 16,634 15,886 20,000 20,000 12,900 18,000 (2,000) 5599 WEED ABATEMENT 11,530 7,647 12,000 12,000 12,000 12,000 - 5601 MAINTENANCE - VEHICLES 54,312 90,529 75,000 75,000 75,000 100,000 25,000 5602 MAINTENANCE - OFFICE EQUIPMENT 1,173 704 3,000 3,000 3,500 3,600 600 5603 MAINTENANCE - MACH & EQUIP 14,401 9,098 13,000 13,000 13,000 68,000 55,000 5604 MAINTENANCE - BUILDINGS 7,250 5,924 8,000 8,000 8,000 8,000 - 5605 MAINTENANCE - GROUNDS 23 326 6,000 6,000 6,000 2,000 (4,000) 5606 MAINTENANCE - RADIO COMMUNICATIONS 8,372 11,740 8,200 8,200 8,200 8,200 - 5608 GAS & OIL 45,782 41,148 45,000 45,000 30,900 40,000 (5,000) Subtotal Services & Supplies 501,153 442,629 - 496,500 508,300 487,600 596,600 88,300 5803 LEASE PURCHASE PAYMENTS - 69,000 66,400 Subtotal Debt Service - - - - 69,000 - 66,400 - 6101 DATA PROCESSING EQUIPMENT 232,667 7,454 10,000 10,000 10,000 10,000 - 6103 COMPUTER LICENSING SOFTWARE 15,007 19,525 33,000 33,000 33,000 44,000 11,000 6201 MACHINERY & EQUIPMENT 66,783 42,166 10,000 10,000 10,000 15,500 5,500 6301 VEHICLES - 48,500 61,100 Subtotal Equip Replacement 314,457 69,145 - 53,000 101,500 114,100 69,500 16,500 Attachment 1 Item 12.a. - Page 11 BUDGET ACT ACCOUNT NAME 2014 2015 Original Budget Current Budget 2016 Estimated 2016 2017 2017 Budget vs 2016 Amended Budget Actual Current Year Budget Activity FIVE CITIES FIRE AUTHORITY PRELIMINARY BUDGET For the Fiscal Year Ending June 30, 2017 SAFER GRANT FUNDED 5101 SALARIES FULL-TIME 264,077 55,122 - - - - - 5105 SALARIES OVERTIME 22,394 3,899 - - - - - 5108 HOLIDAY PAY 15,754 4,222 - - - - - 5109 SICK LEAVE PAY 5,212 5,718 - - - - - 5113 VACATION PAY 5,074 18,990 - - - - - 5114 COMPENSATION PAY 17,766 2,296 - - - - - 5121 PERS RETIREMENT 96,196 31,511 - - - - - 5122 SOCIAL SECURITY 26,929 7,345 - - - - - 5126 STATE DISABILITY INS. (SDI)3,515 977 - - - - - 5131 HEALTH INSURANCE 55,408 12,185 - - - - - 5132 DENTAL INSURANCE 6,478 1,445 - - - - - 5133 VISION INSURANCE 1,056 263 - - - - - 5134 LIFE INSURANCE 692 95 - - - - - 5141 WORKERS COMPENSATION 14,600 - - - - - - 5142 UNIFORM ALLOWANCE - - - - - - - 5147 EMPLOYEE ASSISTANCE PROGRAM 175 - - - - - - Subtotal - SAFER Grant 535,326$ 144,068$ -$ -$ -$ -$ - GRAND TOTAL EXPENDITURES 4,471,628$ 4,082,637$ 3,921,500$ 4,133,800$ 4,014,165$ 4,184,900$ 190,200 Attachment 1 Item 12.a. - Page 12