Item 4 - Consideration of the Comprehensive Financial Plan for FY 1986-87P
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AGENDA
(''dENDA REPORT} o
CITY OF POAY
TO: Honorable Mayor and. Members of the City Council
FROM: James L. Bowersox, City Mans
b.
DATE: June 10 , 1986
SUBJECT: Consideration of the Comprehensive Financial Plan
for Fiscal Year 1986-1987
BACKGROUND
In January 1986, staff began the preparation of the Comprehensive Financial Plan 4
for Fiscal.Year 1986-1987. Budget meetings were conducted at the staff level
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during the months of March and April. On May 5, 1986, the City Council
appointed the Budget Review Committee who began its review process This
review, which required 6 evening meetings with staff, was concluded on
Wednesday, June 4, 1986.
FiNDINGs
Attached for City Council consideration is the Proposed Canprehensive Financial
Plan for F'isal Year 1986.-1987. As proposed, the Plan recommends that the City
Council approve an operating budget of $15.7 million, a City Capital hprovement
Program of $ 491, 600 , and a Redevelopment budget of $3.8 mill ion . Included for
City Council review is a copy of the final report of the Budget Committee. This
report will be formally presented to the City Council at the June 17, 1986 con-
tinued hearing on the budget by Bob Brooks, Carmittee Chairman.
MCCION
It is recommended that upon completion of the City Manager's introduction . of the
Combined Financial Program for Fiscal Year 1986-1987, that.the City Council open
the public hearing. Upon conclusion of the evenings testimony, it is recam
mended that the hearing be continued to June 17, 1986.
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JUN 10 1986 ITEM
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MEMORANDUM � lt�{ OF [gip
CITY OF POWAY
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CfTY i\ THE
TO: Mayor and Members of the City Council
FRAM; Members of the Budget Review Committee
DATE'; June 17, 1986
SUBJECT: The Proposed ComprehensiveFinancial Plan for Fiscal Year
1986-87
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The Budget Review Committee .has completed the review of the City Manager's
proposed financial plan for fiscal- year 1986-87 The Committee is pleased _ •
to recommend that the City Council/Redevelopment Agency adopt the plan
4 following the public hearing process.
The Committee, consisting of Bob Brooks, David Calvert, Kim Conant, Chuck
Glenn, and Vern Marsten, held public meetings with the City Manager and his
staff on May 5, 12, 19, 28 and June 2, and June 9 to review the proposed
i �Y financial planfor the City of Poway and the Poway Redevelopment Agency.
In addition the Cccrmttee members spent many additional hours of their own
time reviewing the plan and the supporting material provided by City Staff.
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The review included a review of recommendations of previous Budget Review
Ccnnittees, a review of information regarding the City's investment
program, comparisons of top management salary levels with other San Diego
County cities, an accounting of the City's bonded indebtedness, a comparison
of the number ofees to population with other California cities of
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comparable size, a report regarding the construction and maintenance of the
}' City's trail system, a report regarding the proposed water and sewer rates
for FY 1986-87, a report indicating the percentage of the budget that was
expended for the past three years for personnel costs, operations and main-
tenance and capital outlay, a report on health insurance costs, and a
report indicating the proposed capital outlay items to be purchased. during
the 1986-87 fiscal year. our review also included a page -by -page examina-
tion of the budget detail for the.cperating budget, an analysis of the
anticipated revenues, the activity of the various City and Redevelopment
Agency funds and the proposed Capital Improvement and Redevelopment Agency
budgets.
We are pleased to report that the City continues to be financially sound
and is continuing to experience adequate growth in City revenues. We also
noted that the City continues to maintain an adequate reserve and the
City's investment program continues to obtain a good yield while still
maintaining for the monies that have been invested.
on the basis of our review of the Proposed Comprehensive Financial Plan for
Fiscal Year 1986-87 for both the City and the Redevelcpment Agency, we feel
that the proposed expenditures are justifiable and warranted and provide
the City with a proper level of service for the upcoming fiscal year.
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The following is ,a last of the specific conclusions, moments, and recam
mendation of the Canuittee for fiscal year 1986-87
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1. The Budget Review Committee has reviewed the recommendations of past
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Budget Review Carnittees and the actions taken regarding those recam
mendations. We are pleased to note that the past Committees' items have
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either been implemented or, as in the following two items, are in the
process of being implemented.
In the report from the 1985 Committee, it was noted that a disparity
existed between the cost of the three health insurance plans. The City
is in the process of attempting to rectify the inequality in the bene-
fit level by discussing this issue through the meet and confer process
with the City's employee groups.
An additional recommendation that was made by the. 1985 Canmittee was 1
that the heading for prior year's expenditures be changed frau
"estimated" to "actual" when the final budget was printed. While
actual expenditures were shown in the budget, the heading was not
changed. This oversight will be corrected in the printing of the 1
adopted financial program for EY 1986-87.
2. In reviewing the budget performance for the past three years, it was
noted that, on the average, the City expended only 94 percent of the
amount approved in the City's operating budget.- This amounted to a net
cumulative savings of over $2 million which was returned to the City's
fund balances for future use. The Committee was pleased to note this
excellent performance and recommends that this information be provided
annually.
3. The Committee was delighted to note the continued effectiveness of the:
contract with the County Sheriff's Department for law enforcement ser-
vices. Again this year, Poway continues to have the lowest crime rate
in the County. As a result of the low crime rate and a lower than nor-
mal workload for the investigative personnel, the County has reassigned
one of the investigators that would normally be provided under the
contract. Although this action was taken without notifying the City,
the Committee is pleased to report that City staff has convinced
the County to give the City a credit toward the current year's contract
and is pursuing the matter further to ensure that a full credit is
E received for past years.
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4. The Committee reviewed a cooparison of the number of employees employed
by the City for the various functional areas compared to other cities
in the State. The Committee noted that while all of the other agencies
had their own Police.'Departments, that when the number of law enfor-
cement personnel that are assigned to Poway is included in the total
number of employees for Poway, that our City continues to have the
fewest number of employees per capita for cities our size.
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Budget Review Committee Recommendations
June 17,`1986
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The Committee recognizes that no two cities are exactly alike and that
comparisons of this type are difficult to make. However, the Committee
feels that the information is significant and that it shows that Poway
is able to provide an adequate level of service with a lower than nor-
mal number of employees per capita.
S. The Committee also reviewed a comparison. of salaries paid to top ma.na-
gement personnel versus other employees in similar positions in other
cities in the County. The comparisons showed that the salaries paid to
Poway personnel were typically below their counterparts in other i
cities. The Committee feels that it is important for the City to pro-
vide competitive salaries and benefits in order to recruit and retain
quality employees.
6. The Committee discussed the proposed water rates and sewer rates for
next fiscal year. We feel that the procedure for setting water rates
is fair and are pleased to note that no increase in either the con-
modity rate or the capacity charge will be necessary next fiscal year.
The Committee also reviewed the sewer rate and recommends that starting
with the 1986-87 fiscal year that this rate be increased over the next
few years to ensure that the cost of operating and maintaining the
sanitary sewer system is recovered from the sewer service charge. over
the years, the sewer service charge has been kept artificially low by
supplementing the revenues from sewer fees with interest income from
the sewer fund balance. Although the City has improved this situation
since incorporation, a firm plan needs to be established for ensuring
that the sewer service charge recovers the full cost of operating the
sanitary sewer system. The City of San Diego has notified the City of
a $191,563 increase in the cost for sewage treatment which will also
have to be recovered as part of any proposed rate increase.
7. The Committee discussed the use of Landscape Maintenance Districts that
are being created to ensure that common areas are adequately maintained
within developments and along roadways in the City. The Committee sup-
ports the use of Landscape Maintenance Districts where there is a -spe-
cialized benefit to a particular area and recommends that the City
pursue the establishment of districts within existing developed areas
to provide an equitable method for ensuring that the landscaping in
these areas is properly maintained.
As redevelopment plans are approved, the City Council should also con-
sider the formation of Landscape Maintenance Districts to maintain any
areas improved.
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Budget Review Camittee.Reccmmendations
June _17, 1986
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8. The Committee reviewed the use of contract recreation instructors to
provide specialized recreation programs. We support the use of
contractor instructors and are pleased to note that although. the City
is able to provide wide variety of programs, the fees charged to the
participants recover the total costs associated with these programs.
9. The Cb mittee reviewed the means by which services are provided to the
community. The budget is comprised of both staff and contract
programs. The Carrtittee suggests that the City Council continue to
annually review the provisions of services with consideration given to
the means of delivery, be it through City staff, the County or private
enterprise. This will insure that the most economical and efficient
means of providing services is selected.
10. The Camu.ttee has recognized the need to develop a strong revenue base
which is not dependent tin State or Federal funds. Significant losses
are expected in.Fiscal Year.1986-87 in both the Federal Revenue Sharing
and Community Block Grant Funds. It is suggested that econanic deve-
lopment programs continue to be developed which will provide for
increased sales tax receipts and that Redevelopment fundsbeused in
the most appropriate method to ensure the increased financial viability
,tom* of the City.
The Committee is pleased to note that the Redevelopment Agency will be
able to finance capital improvement. programs which will more than off
set the loss of the Federal funds
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r 11. The Committee applauds the openness of the City staff and. the respon-
siveness to the questions and requests for information from the
CcsYmittee. The Caamnittee was also impressed with the staff's- knowledge
of the financial plan and the operations of the City. The Cmmiittee
feels the financial plan is easy to read, comprehensive, and provides
the reader with a reasonable understanding of the City's financial
position and the operations of the various city activities.
We commend the City for its continued.conservative approach to fiscal mana-
gement and for the strong financial position it continues to maintain.
We would like to thank the City Council for the opportunity to serve on the
Budget Camnittee. This Committee not only serves a useful purpose but, as
individuals and citizens of the City, we found service on the committee to
be a very informative and rewarding experience. We would: also like to
thank the City Manager and his staff for the time they spent assisting the
Canmittee during the review process. The Budget Review Cmmittee also
recognizes the total city staff effort that went into the preparation of
the City's financial plan. We believe it is a well prepared, informative
document and would lixe to thank all employees who played a role in its
preparation.
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