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Mayor's Proposed Budget 2011-12-1

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Mayor's Proposed Budget 2011-12-1 Powered By Docstoc
					        Mayor Antonio R. Villaraigosa


Overview of Proposed 2011-12 Budget
              April 20, 2011
                  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


                                                                                                            $155.7      $162.4
                  $600.0
                                                                                               $131.0
                                         $131.2            $128.5            $127.7
    In Millions




                             $120.6
                  $400.0
                                                                                                             $390.0    $393.0
                                                                                              $374.2
                                                            $338.0             $339.9
                                          $308.5
                             $280.7
                  $200.0



                    $0.0
                           2005-06     2006-07           2007-08           2008-09           2009-10       2010-11    2011-12*

                                                Health Care and FLEX                       Worker's Comp

*Proposed Budget
Health Care and Flex includes Unemployment Insurance contributions and Employee Assistance Contributions
              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

                                                                                                  $220.2
                    $800.0                                   $187.1                   $190.1
                                                $170.3                   183.3

                    $600.0
     In Millions




                              $107.5                                                                $581.9
                                                  $502.7      $549.9                   $520.6
                                                                         513.5
                    $400.0
                                 $371.8
                    $200.0


                      $0.0
                              2005-06           2006-07      2007-08    2008-09       2009-10     2010-11
                                                             Pension         Health
**LAFPP and LACERS
Source: CAO, 8/3/10 and 10/22/10 Council Presentation
      Summary of General Fund Spending

                        2010-11 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
                                        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
       FY2011-12 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 FY2010-11
Adopted Budget.
                                                          In Thousands

                                                2010-11                  2011-12
 Property Tax                                     $1,408,529                 $1,436,363
 Licenses, Permits, Fees & Fines                     778,177                       721,272
 Utility Users' Tax                                  654,600                       627,832
 Business Tax                                        411,960                       439,219
 Sales Tax                                           289,412                       306,239
 Power Revenue Transfer                              257,000                       254,000
 Parking Fines                                       142,446                       141,000
 Transient Occupancy Tax                             122,700                       136,200
 Documentary Transfer Tax                            105,000                       105,000
 Parking Users' Tax                                   85,983                        88,200
 Remaining Revenue Sources                           119,408                       123,675
 Total General Fund Receipts                      $4,375,215                 $4,379,000
                          Revised CAO Estimated
                        FY11-12 General Fund Deficit
                                                                                       Health
            4.5                                                                       Benefits,
                                                                          Capital
                                                                                      $24M, 7%
                                                                         Program
                                                                        $38M , 11%
             4
                                                        Employee
                                                         COLAS
                                                         $122M,
$ Billion




                                                          36%
            3.5


                                                                        Pension
             3                                                          Benefits
                                                                        $152M,
                                                                         46%


            2.5
                  Estimated General Estimated General         Estimated GF Deficit:
                   Fund Spending     Fund Revenue                 $336.3 million
      Final General Fund Deficit to Solve
NOTE:                                      (millions)
                                                        Revised CAO Estimated
The City’s projected deficit for next      ($336.3)     FY11-12 General Fund Deficit
year as last published by the City
Administrative Officer (CAO) was
$350 million. The CAO has revised                       Remove Assumption that Negotiated
                                            ($80.0)
this figure to $336 million.                            Police OT Reduction Continues

However, in order to get a complete
                                                        Remove Assumption that
picture of what the budget must solve       ($41.2)     Fire Modified Staffing Continues
for next fiscal year, it is necessary to
start with an alternative, fully
burdened projected deficit of $457.5       ($457.5)     Fully-Burdened Deficit to
million.                                                be Addressed by Budget
    Overview of Budget Balancing Solutions
                                                             New
                                                            Revenue


GENERAL FUND DEFICIT          ($457.5)                  Special
                                                                       One-Time
                                                         Fund          Solutions      Fire
Fire Deployment Plan             $53.7
                                                   Maximization                    Deployment
LAPD Sworn Salary and OT        $100.0                                                Plan
Reductions
Civilian Furloughs               $93.4   Reductions
                                              &
                                                                                      Police
Reductions and Efficiencies     $105.3   Efficiencies
                                                                                      Sworn
Special Fund Maximization        $51.0                                              Reductions


New Revenue                      $11.0                             Civilian
                                                                  Furloughs
One-Time Solutions               $43.1

      REMAINING DEFICIT          $0.0
                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
Fire Deployment Plan
       $53.7 M
The new LAFD Deployment Plan replaces the Modified Coverage Plan (MCP) that has
been in place since 2009.
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 re-
focuses 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
    Police Sworn Salary and
     Overtime Reductions
            $100 M
The Mayor’s Proposed FY2011-12 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
  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 2011-12
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).
        Long-Term Solution: Reducing the Workforce
                 FY 2005-06 to FY 2011-12
          Total           38,574         38,869           39,615           39,261           37,974           34,298            33,618
         15,000
                                          13,886           14,060           14,053           14,055           14,140           14,034
         14,000          13,777
                                                                13,374                       12,936
         13,000         12,791           12,538                             12,875
                                                           12,181               12,333
         12,000                          12,445
                         12,006                                                                10,983
         11,000
                                                                                                                  10,437       10,389
         10,000
                                                                                                              9,721
          9,000                                                                                                                     9,195

          8,000
                      2005-06          2006-07          2007-08           2008-09          2009-10           2010-11         2011-12*

                         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
       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
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.
    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.
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%.
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

				
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