|
Title:
|
Update Related to the City’s Comprehensive Financial Plan.
|
City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council receive an update related to the City’s
Comprehensive Financial Plan.
BACKGROUND:
Purpose of the Plan
Developing a Comprehensive Financial Plan was identified by the City Council as
one of the top priorities in fiscal year 2006-07. The Plan is intended to be a
financial management tool to be used for financial and budgetary decisions. The
first phase provides a city-wide five-year perspective on the City’s financial
condition based on historical trends and a broad range of financial information.
Particularly, the plan addresses short-term and long-term financial issues facing
the City and provides options for decision-making and policy direction. The final
phase of the plan will include long-term (fifteen-year) projections.
Developing the Plan
The City Controller’s office, under the City Manager’s direction, has worked with
the City Council Budget and Finance Subcommittee and Executive Management to
develop this Plan. Since the beginning of the fiscal year, staff has been meeting
frequently with the City Council Budget and Finance Subcommittee as well as
three related subcommittees made up of various Executive Management staff and
the City Council Budget and Finance Subcommittee members. These
subcommittees are the Comprehensive Financial Plan Committee, Cost Reduction
Committee, and Revenue Enhancement and Management Committee.
In order to prepare such a long range financial plan, the City Controller’s requested
information from each department to identify the resources needed to: 1) continue
Meeting Date: 9/25/06 Item Number: A-4
AGENDA ITEM: Update Related to the City’s Comprehensive Financial Plan.
Contact Person/Dept.: Marlee Chang,
Budget & Finance
Phone Number: (310) 253-6011
Fiscal Impact: Yes [ ] No [X] General Fund: Yes [] No []
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification: Master Notification List (9/20/06)
Department Approval:
Marlee Chang, 9/20/06
City Manager Approval:
Jerry B. Fulwood (09/20/2006)
City Controller Approval:
Marlee Chang, 9/20/06City of Culver City, California
City Council Agenda Item Report
to provide the existing level of service, 2) provide an adequate level of service, and
3) provide an optimal level of service to the community. This information is being
gathered, quantified, and summarized in an excel spreadsheet. The fiscal impact
of each resource need was projected over the five year period covered by the
Plan.
The Controller’s office then met with each individual Department Head to review
and further refine the specific information about their current and future needs.
This information is incorporated into the financial plan and categorized into the
following operational scenarios and funding needs.
Level I Funding Needs:
Funding that was identified by Departments to be necessary in order to
maintain the current level of service to the City’s residents and customers. Due
to budget constraints, the last two budget cycles did not include an increase for
operations and maintenance to account for inflation. Consequently, the
departmental budgets were, in effect, decreased.
Level II Funding Needs:
Funding that is anticipated or expected to be needed in the coming years to
restore departmental budgets and address some cost reductions and service
level decreases that had been approved in prior years.
Infrastructure Funding Needs:
A. Deferred Maintenance:
Set-aside necessary funding in order to maintain facilities and
infrastructure in the future.
B. Capital Projects:
Funding needed for new infrastructure construction projects.
C. Unfunded State Mandate:
It is anticipated that State mandated costs for Stormwater Cleanup
(NPDES/TMDL) will be significant, possibly ranging in the tens-of-
millions of dollars.
Future Unfunded Liability Funding Needs:
Set-aside necessary funding in order to off-set the future liability increases (e.g.
Self-insurance Fund, Worker’s Compensation, Retiree medical insurance,
Pension costs).
Level III Funding Needs:
Funding that will enhance the City’s delivery of service and/or programs to the
community and its own in-house customers.
Concurrently, Budget & Finance staff researched the availability and cost for
computer programs/software to assist in the development of the Comprehensive City of Culver City, California
City Council Agenda Item Report
Financial Plan. Staff visited various websites to review the capabilities of a
number of programs, downloaded and tested the trial versions of a few excel
based programs, and contacted several firms to obtain more detailed information
on their software packages. However, most of the software that looks flexible and
useful requires a significant time and financial investment to meet our needs.
Staff discussed alternate options with the IT Director. It was concluded that the
most feasible approach is to work with current IT staff with expertise in Microsoft
Excel to assist in preparing a comprehensive excel based program to customize
and enhance data compiling and updating features for the preparation of the plan.
This Excel program will enable staff to enter various assumptions in order to
display different financial scenarios.
Updated Financial Policy
Another component of the Financial Plan is to update the existing financial policy.
A draft amendment of the Financial Policy was prepared for discussion and
consideration by the Subcommittee. An updated Financial Policy will reinforce
fiscal discipline and provide a financial guideline for the City Council. This will be
presented to City Council for consideration as Part Two if the City Council update.
Financial Options
There are revenue enhancement and cost reduction options which are currently
being reviewed and discussed by the appropriate staff subcommittees. The
recommendations with associated financial impacts are being reviewed by the City
Council Subcommittee and will be presented to the City Council for consideration
in phase two of the plan.
Fees and Charges Study
One part of the revenue enhancing strategy that the City Council has already
begun to address is a full study of the City’s fees and charges. The Council is
being asked to award a contract to a professional services firm to conduct a
comprehensive city-wide fee study. That item is being presented tonight as a
separate agenda item. Pending approval, this study is anticipated to begin in
October and conclude in January 2007.
Summary
On September 14, 2006, a draft report of the Comprehensive Financial Strategy for
the General Fund was shared and discussed with the City Council Budget and
Finance Subcommittee and Department Heads. The draft “Comprehensive
Financial Strategy for the General Fund” will be provided to City Council within the
next two to three weeks. The final plan will include all City funds and fiscal impacts
between each fund.City of Culver City, California
City Council Agenda Item Report
Staff will continue to work with the City Council Budget and Finance Subcommittee
and the three Executive Management subcommittees to define options and
develop a timeline for each stage of this process. With the City Council Budget
and Finance Subcommittee’s support and concurrence, staff plans to complete and
present the final phase of the report to the City Council by the end of January
2007.
MOTION:
Receive an update related to the City’s Comprehensive Financial Plan.