Agenda Packet 2003-05-29 SP
CITY COUNCIL Cttt of
AGENDA ArrOlo GrancIe
Tony M. Ferrara Mayor
Jim Dickens Mayor Pro Tem Steven Adams City Manager
Thomas A. Runels Council Member Timothy J. Carmel City Attorney
Sandy Lubin Council Member Kelly Wetmore Director, Administrative Services
Joe Costello Council Member
NOTICE OF SPECIAL MEETING
CITY COUNCIUREDEVELOPMENT AGENCY
AGENDA SUMMARY
THURSDA V, MA V 29, 2003
6:30 P.M.
Arroyo Grande City Council Chambers
215 East Branch Street, Arroyo Grande
1. CALL TO ORDER: 6:30 P.M.
2. ROLL CALL: COUNCIURDA
3. FLAG SALUTE
4. CITIZENS' INPUT, COMMENTS, AND SUGGESTIONS on Special
Meeting Agenda Items. Members of the public wishing to address the
Council/RDA on any item described in this Notice may do so when
recognized by the Presiding Officer.
5. CONSIDERATION OF BI-ANNUAL PRELIMINARY BUDGET FY 2003-
04 & FY 2004-05 (ADAMS/SNODGRASS)
The City Council/Redevelopment Agency will review the Bi-Annual
Preliminary Budget for FY 2003-04 & FY 2004-05. The City Council/RDA
will consider adoption of the Bi-Annual FY 2003-04 & FY 2004-05 Budget
at its Regular Meeting of June 10, 2003.
6. ADJOURNMENT to Regular City Council/Redevelopment Agency
Meeting of Tuesday, June 10,2003 at 7:00 p.m. in the Council Chambers,
215 East Branch Street.
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MEMORANDUM
TO: CITY COUNCIUREDEVELOPMENT AGENCY
FROM: STEVEN ADAMS, CITY MANAGER ~
SUBJECT: CONSIDERATION OF FY 2003-04/ FY 2004-05 PRELIMINARY BI-
ANNUAL BUDGET
DATE: MAY 29,2003
RECOMMENDATION:
The FY 2003-04/FY 2004-05 Preliminary Bi-Annual Budget is provided for review,
discussion, public input and direction. No action is recommended at this time. The
proposed budget will be placed on the June 10, 2003 City Council agenda for formal
consideration.
FUNDING:
The proposed General Fund budget is $10,728,525 for FY 2003-04 and $11,219,770 for
FY 2004-05. The FY 2003-04 amount represents a .5% decrease from the FY 2002-03
amended budget. The total recommended City budget for FY 2003-04 is $17,643,950
and $17,047,900 for FY 2004-05. All funds are balanced.
DISCUSSION:
Please find attached the recommended Preliminary Bi-Annual Budget for FY 2003-04
and FY 2004-05. Staff is presenting a two-year budget for the first time, which is
consistent with the recommendations approved by the City Council in January 2000
regarding the City's financial practices. The document represents the collective
recommendation of the department directors for the work plan for the upcoming year.
All funds are balanced under the proposal. We believe the draft budget addresses
existing needs, but does so prudently by managing ongoing costs, balancing priorities
and planning long term.
The recommended budget will address each of the budget priorities established by the
City Council at the initiation of the budget process, which include:
. Maintain existing service levels;
. Address increased costs of retirement plan rates caused by the economic downturn;
. Provide contingency plans to address potential State budget impacts;
. Addition of a third full-time paid Fire Engineer position;
. Increase street maintenance funding;
CITY COUNCIL
FY 2003-04/ FY 2004-05 PRELIMINARY BI-ANNUAL BUDGET
MAY 29, 2003
PAGE 2
. Increase in park maintenance costs for the new Rancho Grande Park;
. Plan for fiscal impact of labor negotiations; and
. Continue plan to address the shortfall in the Redevelopment Agency budget.
The Fund Balance for the General Fund is projected to be approximately $2,683,900
(25% of appropriations) at the end of FY 2003-04 and $2,963,900 (26.4%) for FY 2004-
05. These amounts will be reduced by costs associated with any commitments
resulting from ongoing labor negotiations. Staff is recommending the reserve policy be
increased from 15% to 20% at this time, which we believe is a more standard and
prudent fiscal policy. It is also recommended that new policies be established that
specify minimums for reserves in the Sewer and Water Funds.
The City's Capital Improvement Program (CIP) will continue to make a significant
investment in the community's future through the maintenance of the infrastructure
system. Major projects programmed in the 5-year CIP include resurfacing of Branch
Mill Road, Brisco Road, EI Camino Real, Farroll Road, Wilton Place and increased
funding for the annual pavement management program. Other significant projects
include Sewer Lift Station No. 1 replacement, Reservoir No. 1 replacement, and the
Newsom Springs drainage project.
The budget includes additional recommendations this year to reduce costs to the
Redevelopment Agency in order to address the current shortfall. Based on these
recommendations, annual tax increment revenues are projected to exceed expenses by
FY 2004-05, at which time the Agency will begin to repay existing debt to the Sewer and
Water Facility Funds.
The budget proposals also include contingency planning for potential impacts of the
State budget crisis on local funding sources. Plans include a $50,000 contingency fund
in each year of the two-year budget. Booking fee reimbursement has not been included
as budgeted revenue. If additional reductions in revenues are experienced, it is
proposed to address them initially through reserves until recommendations for further
budget adjustments can be proposed.
The department directors should be commended for the cost effective manner in which
they have prepared and managed their budgets. In particular, the City's Director of
Financial Services, Lynda Snodgrass, has done another exceptional job in preparing the
budget document. It is also important to recognize that the continued improvement to I
the City's financial condition is largely attributable to the ongoing prudent fiscal policies ,
and direction of the City Council. !
The budget recommendations, as well as departmental goals and accomplishments, will
be presented in more detail at the special City Council Study Session. Please feel free
to contact staff with any questions or requests for additional information in the
meantime.
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CITY COUNCIL
FY 2003-041 FY 2004-05 PRELIMINARY BI-ANNUAL BUDGET
MAY 29, 2003
PAGE 3
Al TERNA TIVES:
The following alternatives are provided for the Council's consideration:
- Receive and discuss recommendations;
- Direct staff to provide additional information and/or make changes.
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