January 25, 2017 Study Session Charting Our Path Presentation

transcript

City Council Study SessionJanuary 25, 2017

Purpose of Discussion

• Fiscal sustainability• Measures taken to date• Stakeholder ideas• Proposed process for analysis

Background

Fiscal Overview

• Past 10 years – economic fluctuations• 10‐year forecast – growing gap• Operational shortfalls continue without action

Fiscal Overview

• Past 10 years – economic fluctuations• 10‐year forecast – growing gap• Operational shortfalls continue without action

*$14.7M does not reflect the CalPERS recently reduced discount rate.

*$14.7M

Gap Causes

• Weak revenues– Recession – Changes in shopper’s behavior

• Increased expenses– Pension– OPEB– Healthcare

Past ActionsFY 07/08

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14FY 2007/2008

• $5 Million in reductions• 28 full time positions eliminated

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2008/2009• $10.5 Million in reductions• 112 full / part time positions eliminated • 56 vehicles eliminated

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2011/2012• $5 Million in reductions• PARS Early Retirement Incentive Plan• 72 full time positions eliminated• Refunded City Hall Bonds

($1.7M one‐time savings)

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2012/2013• $700,000 in reductions• Eliminated and extended life cycle of

fleet vehicles

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2013/2014• $900,000 in reductions• Consolidated departments to reduce

costs and streamline operations• Maintenance Services• Recreation Services ‐ Library

• 14 full / part time positions eliminated

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14FY 2007/2008

• $5 Million in reductions• 28 full time positions eliminated

FY 2011/2012• $5 Million in reductions• PARS Early Retirement Incentive Plan• 72 full time positions eliminated• Refunded City Hall Bonds

FY 2012/2013• $700,000 in reductions• Eliminated and extended life cycle of

fleet vehicles

FY 2013/2014• $900,000 in reductions• Consolidated departments to reduce

costs and streamline operations• Maintenance Services• Recreation Services ‐ Library

• 14 full / part time positions eliminated

FY 2015/2016• Non‐General Fund account savings• Department reorganizations to reduce

operating costs• Administrative Services• DWP• Risk and Legal

• 6 full time positions eliminated• Refunded Corporation Yard Bonds

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2016/2017• Implemented zero‐based budgeting• Cash flow savings from prepayment of

PERS annual required contribution• Formed two citywide Community

Facility Districts• CFD 2016‐1 – Public Services ‐ $2.2M potential

annual revenue after build‐out• CFD 2016‐3 – Maintenance Services ‐ annual

assessment will help to offset maintenance costs required for future development

FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

10 Year Totals• $27.4 Million in reductions• $5.5 Million in one‐time savings• 247 positions eliminated (27.7%)

Other Actions Taken

• Survey and benchmarking with comparable communities

• Early Retirement Incentive Program (PARS) ‐ 2011• Exploration of defined contribution plan and other options

• Prepaying CalPERS – 2015 and 2016• Commissioning independent analysis on pension, OPEB and healthcare obligations ‐ 2016

What’s Our Path Forward?

• Solicit and research ideas focused on:– Revenue generation– Cost savings

• Present findings and advice/recommendation• Form a consensus and seek Council direction• Incorporate into upcoming budget process

Budget Timeline

Jan. – Feb.Jan. – Feb. Budget preparation

Personnel budgeting and

revenue forecasting

Feb. – Mar.Feb. – Mar.City Manager

budget meetings

Award of one‐time budget requests

Mar. ‐MayMar. ‐May Budget consolidation

Budget book development

City Manager review

MayMayCity Council Budget

Workshop

Project Team

Abigail SchellbergLibrary & Recreation Services Assistant

Director

Cita LongsworthPurchasing Manager

Cynthia MejiaEconomic

Development Intern

Lisa MobleyCity Clerk

Luis NavarroFinancial Analyst I

Reta WestonAccounting Supervisor

Tracy MartinDWP Utilities Project

Manager

Proposed AnalysisProcess

Guiding Principles

Strong Community

Clarity

Transparency

Fiscal Responsibility

Focused Solutions

Overall Process

Idea Received and Logged

Conduct Research and

Analysis

City Manager Advice to City

Council

Obtain City Council Policy Direction

Information posted to website & reported at Council Study Sessions

Idea Processing

Idea Idea 3

Idea 1

Idea Idea 2

Proposed Analysis Rubric

• Potential cost savings• Revenue generation

BudgetImpact

• Is it legal? Any jurisdictional issues?• Potential litigation?Legality

• Will public services be reduced?• Will services be unaffected/enhanced?

Impact toServices

• Helps achieve a Strategic Plan goal?• In line with City’s Mission Statement?

Community Priorities

• Is there a capital investment required?• How long until benefit is realized?

Return onInvestment

Proposed Rating Legend

Symbol Meaning

Projected or potential positive impacts or benefits for the City

Low impact or requires more research

Projected or potential negative impacts to the City

Each category in the analysis rubric will be assigned a symbol based upon the research:

After the idea is researched and rated, the City Manager will review and make a recommendation for City Council direction:

Recommendation Legend

Symbol Meaning

Recommendation to proceed with idea

Idea requires more research before a determination can be made

Idea is not recommended based upon projected or potential impacts

Sample Advice and Status

Idea Budget Impact Legality Service

ImpactComm. Priorities ROI

CityManager Review

Council Policy

Decision

Idea 1 Pending CC Decision

Idea 2 Rejected

Idea 3 Pending CC Decision

Idea 4 CM Review

Idea 5 Under Research

19Hyperlink to analysis

Sample Analysis

Idea Submission and Website

Idea Submission

• Website: www.DiscoverCorona.com/OurPath• Phone: (951) 736‐2201

Questions?

January 25, 2017 Study Session Charting Our Path Presentation

Government & Nonprofit