2015-2017 Operating Budget Highlights

Below is a summary of the 411 page proposed operating budget for 2015-2017.  The Council held the 1st Budget Workshop and Public Hearing last Tuesday and will hold the final Budget Workshop and Public Hearing at the upcoming Council meeting next Tuesday.

Good News

• After major revenue shortfalls in the years following the recession, the City is now seeing modest revenue growth
• Expected general fund revenue for FY 14/15 is $172.3M, FY 15/16 forecast is $185.3M, with FY 16/17 forecasted at $189.3M
• City is anticipating significant positive impact in revenue due to expected completion of Del Amo Mall just in time for the holiday season as well as new car dealerships on Hawthorne Blvd
• Revenue increases allowed the City to provide employees with recent pay increases and offer a budget with no reductions

Bad News

• City had to curtail hoped for enhancements to the budget due to unexpected revenue losses
• City is currently experiences revenue losses of $500 to $700K a month due to ExxonMobil shutdown and resultant decrease in Utility Users’ Tax (UUT) receipts
• Revenue was further impacted by restrictions in paramedic fees (budgeted $1.96M, forecast of $977K – revenues for FY 13/14 were $2.2M)
• City also facing unknown monetary impact of drought mitigation measures
• RDA Loan repayment yet to be resolved with state and the City could be ordered to pay $2.5M
• The City may need to tap into $14.5M Economic Anomaly Reserve to cover shortfalls due to unexpected revenue losses

Proposed Budget Increases (expected to be approved)

• One-time $2 Million increase for FY 15/16 and additional $300K increase for FY 16/17 in Self-Insurance reserve (probably due to increased lawsuits against the City)
• Increase of $100K annually in building maintenance costs
• New Medical Director services position ($30K) and patient care reporting position($42K) for TFD
• Add Police Services Officer for the City Jail ($90K)
• Upgrade computing capacity at Madrona Marsh ($7.2K)
• Add Farmer’s market site leader as well as Security Guard ($28K)
• Increase City Council annual travel budget from $12,208 to $31,500 (mayor’s budget to increase from $2,224 to $7,500)
• New community relations management associate position ($139K)
• Add Administrative Analyst ($124K) and Mechanic ($88K) for Fleet Services
• New Water Apprenticeship/Intern Program ($109K)
• Add several transit positions funded through measure R and Prop C local return ($1.62M in total – $850K for Transit Center positions)

Proposed Budget Increases Still Under Consideration

• Torrance Rose Float donation ($125K)
• Increase annual Torrance Cultural Arts Foundation donation from$109K to $169K

Some Items removed from Proposed Budget by City Manager

• Increase library budget in order to purchase additional library materials ($40K)
• Addition of three firefighter positions ($572)
• Add Streetscape crew ($470K) and concrete crew ($397K)
• Increase tree trimming from every 8 years to every 4.7 years ($77K)
• Increase non-profit donations from $20K to $40K
• Add Special Investigations Analyst ($124K) and admin analyst ($62K)
• 12.5% raise to 4 Legal Secretaries ($40K) and increase training/travel for City Attorney office ($15K)
• Add Accountant and Administrative Assistant to City Treasurer Office ($147K)
• Laser leveling of softball fields ($20K)
• Park equipment replacement ($30K)
• Addition of Museum Director/Curator ($51K)

On the Radar, but not being Considered at this Time

• Return of fireworks to Wilson Park
• Veteran’s Commission and Community Services Commission
• Veteran’s Day Program in conjunction with Armed Forces Day

Items of Interest

• No mention in budget of possible revenue losses due to major business relocations (i.e. Toyota, Kubota, Farmer Brothers, Panasonic, Hello Kitty)
• Actual FY 2014/15 general fund revenues $4M less than projected (budgeted forecast of $176.4M, current forecast of $172.3M)
• No mention of providing money for additional crossing guards
• Water Fund continues to show revenue surplus with FY 14/15 revenues of $39M and expenses of $35.8M (possibly due to recent rate increases – is this a sneaky tax?)
• Expenditure forecasts incorporated recent PERS changes including: decreasing return on investments by 0.25%, limiting amortization to no greater than 30 years, increasing the mortality rates, and accounting for lower than expected return on investments for the current fiscal year
• Budget shows $114K FY 14/15 budgeted amount for City Council salaries and benefits (not including travel reimbursements) amounting to $16,285 in annual salary and benefits per councilmember (not a ton, but still worth mentioning next time you hear one of them say they only get $100 per month for their volunteer job).