City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
The City Council Subcommittee on Animal control (Vice-Mayor Silbiger and Council
Member Armenta) recommends the City Council consider allocating funding in Fiscal
Year 2008-09 for either 1) a part-time animal control officer or 2) a full-time animal
control officer.
BACKGROUND/DISCUSSION:
On August 27, 2007, the City Council unanimously passed the following motion:
1. DIRECT STAFF TO CONTINUE THE CITY’S IN-HOUSE ANIMAL LICENSING
PROGRAM;
2. DIRECT STAFF TO WORK WITH THE COUNTY OF LOS ANGELES TO
SCHEDULE A CANVASSING PROGRAM DURING THE SECOND HALF OF
FISCAL YEAR 2007/2008 (JAN – JUNE 2008);
3. DIRECT STAFF TO WORK WITH THE COUNTY OF LOS ANGELES TO
SCHEDULE TWO LICENSING CLINICS DURING THE SECOND HALF OF
FISCAL YEAR 2007/2008 (JAN – JUNE 2008);
4. DIRECT THE CITY ATTORNEY TO REVIEW THE CONTRACT WITH THE
COUNTY AND APPROVE AS TO FORM AND AUTHORIZE THE CITY
MANAGER TO EXECUTE THE AGREEMENT ON BEHALF OF THE CITY;
Meeting Date: 06/16/08 Item Number: A-1
AGENDA ITEM: Consideration of a New City Program related to Animal Control,
Including the Consideration of the Creation of the Position of Animal Control
Officer.
Contact Person/Dept.: Shelly Wolfberg or
Mary V. Noller
Phone Number: (310) 253-6008 or
(310) 253-6012
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [x] Attachments: [X]
Public Notification:
Friends of Culver City Animals; Los Angeles County Animal Care and Control; and
Master Notification List (06/12/08)
Department Approval:
Jerry B. Fulwood (06/12/08)
City Attorney Approval:
Carol Schwab (by H. Baker) (06/12/08)
Chief Financial Officer Approval:
Jeff Muir (06/12/08)
City Manager Approval:
Jerry B. Fulwood (06/12/08) City of Culver City, California
City Council Agenda Item Report
5. APPROVE THE SOFTWARE MAINTENANCE AGREEMENT WITH
PROGRESSIVE SOLUTIONS, INC.; AND
6. APPROVE A BUDGET AMENDMENT OF $58,600.00 FROM GENERAL FUND
RESERVES.
The City Council also voted in favor (4-1) on the following motion:
1. APPROVE THE RENEWAL OF THE CONTRACT WITH THE COUNTY OF LOS
ANGELES FOR ANIMAL CONTROL FIELD SERVICES AND SHELTERING
FOR A FIVE-YEAR PERIOD, WITH A NINETY-DAY TERMINATION CLAUSE.
At the April 28, 2008 City Council Meeting, the City Council named Vice Mayor
Silbiger and Councilmember Armenta to the Animal Control Subcommittee (the
“Subcommittee”). Since that time the Subcommittee has met with City staff and
members of the Friends of Culver City Animals. The discussions centered around
options to hire a full or part-time City employed animal control officer and associated
costs; the options to shelter animals at a facility other than the County of Los
Angeles-operated Carson Shelter; license revenues; and research with other cities.
At the request of the Subcommittee the City Council is being asked to consider
funding either a part-time or full-time Animal Control Officer to be employed by the
City of Culver City. The Subcommittee proposes that this individual supplement or
complement the current services provided by the County. Various City departmental
staff met with the Subcommittee to review options. Staff included representatives
from Human Resources, the Finance Department, the City Manager’s Office and the
Police Department. In its research, staff determined that most Municipal Animal
Control programs reside in the City’s Police Department. Staff is including the
personnel levels that would be required in order to implement a new City position of
either a full-time or part-time Animal Control Officer to supplement existing contract
levels provided by the County of Los Angeles. In designing a new City program,
staff is cognizant of the community’s demand for high quality service delivery. An
option would be to Implement a 12-24 month pilot program to gauge revenues with
the new program. Start up costs may not be recovered with this option.
The County of Los Angeles states that it assigns one officer to the City of Culver City
and has service available 24-hours per day/7-days per week. The County would
provide staffing simultaneously with the City’s staffing, to ensure coverage of the
entire City during days, nights, and weekends. If the proposed City Animal Control
Officer is sick, on vacation, or out for other reasons, the entire staffing would be
borne by the County.
City of Culver City, California
City Council Agenda Item Report
Field Service Levels:
When determining the need for a local Animal Control Officer and beginning a new
City program, the City Council may want to consider the existing number of calls for
service. Current Animal Control services as provided by the County of Los Angeles
Animal Care and Control include field services; licensing processing costs (before
the City brought Animal licensing in house in April 2007); and license canvassing
costs. The following table shows the field service request calls.
Field Service Statistics (Excluding Sheltering Costs):
7/1/02-
6/30/03
Annual
7/1/03-
6/30/04
Annual
7/1/04-
6/30/05
Annual
7/1/05-
6/30/06
Annual
7/1/06-
6/30/07
Annual
7/1/07-
6/30/08
Annual
(Projected)
Monthly
Average
Service
Request 951 964 1,045
1,007
944
811 79
Total Field
Service Cost
(Incl.
Canvassing)
$100,614 $49,460 $52,313 $73,495 $66,595 $59,882 5,588.32
Annual Sheltering Operations Statistics:
7/1/02-
6/30/03
Annual
7/1/03-
6/30/04
Annual
7/1/04-
6/30/05
Annual
7/1/05-
6/30/06
Annual
7/1/06-
6/30/07
Annual
7/1/07-
6/30/08
Annual
(Projected)
Monthly
Average
Dogs
Impounded
89 78 81 77 83 69 7
Cats
Impounded
84 87 104 90 104 51 7
Other
(Animal)
Impounded
138 128 185 201 175 173 14
Number of Dog Licenses:
The current number of dogs licensed in Culver City is 1,742. In the upcoming
weeks, the County of Los Angeles Animal Care and Control will perform canvassing
services for the City to collect license fees from those dog owners who are out of
compliance with licensing requirements. In recent years, the highest number of
licenses sold was in FY 2002-03 with 3,736 dog licenses, when licensing was
handled by the County. County staff had performed 1,023 hours of canvassing
during this time period. City of Culver City, California
City Council Agenda Item Report
Proposed Anticipated Duties for Animal Control Officer:
1. Investigates complaints from the public and other agencies regarding nuisance,
stray, uncontrolled, dangerous, wild or diseased animals;
2. Investigates animal bites, arranging for appropriate identification and quarantine;
3. Explains to the public, state and local laws, codes and ordinances relating to the
care and control of animals, and filing of complaints;
4. Issues citations for violations of applicable regulations;
5. Patrols assigned areas operating a City vehicle;
6. Captures wild, stray and unlicensed animals for impounding;
7. Transports stray, unwanted and other wild and domestic animals to the animal
shelter from officers, the public, and night deposit cages;
8. Receives service calls to assist the public in claiming lost animals;
9. Prepares reports and maintains records;
10. Monitors and observes animals for signs of illness or injury and reports
symptoms to the supervisor; removes dead animals from public and private
properties; transports injured animals;
11. Under emergency conditions, destroys dangerous or grossly injured animals in
the field or arranges for destruction by City police;
12. Testifies in court regarding citations and disposition of complaints;
13. Approves and monitors home quarantine of biting animals in accordance with
regulations;
14. Assists other agencies and City departments in animal control and handling;
operates firearms, humane traps, mobile radios, and related animal control tools
and equipment;
15. Identifies symptoms of common animal diseases and recommends veterinary
medical care, isolation or destruction;
City of Culver City, California
City Council Agenda Item Report
16. Cleans and maintains building and grounds areas at the temporary kennel;
17. May perform operations desk duties as needed;
18. Performs related duties as assigned.
If a new position is created, the class specification would need to be reviewed by the
Civil Service Commission for recommendation to the City Council and then approved
by the City Council.
Potential Workers Compensation and General Liability of the Position Impacts to the
City of Culver City:
The Animal Control Officer may encounter aggressive and/or large animals during
the course of his or her duties. This type of work may lead to injuries not only from
animal bites, but also from the physical exertion required to place the animals into
the truck. This will potentially increase the City’s Workers Compensation claims
against the City. In addition, there will be a higher risk of the exposure in general
liability for the City. One example of increased liability would include if a pet owner
feels that his or her pet was mistreated by a City of Culver City employee, and
decides to make a claim against the City for the treatment of the owner’s animal.
Supervisorial Support Description:
The Animal Control Officer would need to report to a management employee who
would oversee quality services.
Administrative Support Description:
This position would require administrative support for the Animal Control Officer.
Administrative support is not uncommon with other agencies who employ Animal
Control Officers. Support includes managing files, callbacks to residents for
compliance issues, and potential dispatch work for the Animal Control Officer. It
would be more efficient for the Animal Control Officer to be out in the field
responding to field requests or performing canvassing for licenses.
Associated Program Costs:
Temporary Shelter: Most cities that have their own Animal Control Officer, such as
Torrance, have their own temporary holding area for animals on City property. This
would enable animals to be stored in cages while the owner is located and before a
trip to the Carson Shelter is made. At this point, a location has not been identified.
Estimates for this component of the program are unknown at this time. City of Culver City, California
City Council Agenda Item Report
Vehicle: The estimated initial cost for an Animal Control vehicle is $42,115. This
quote was obtained through our Equipment Maintenance Division, and is in-line with
Culver City’s configuration requirements. It was found through the survey of other
cities, that one vehicle was not sufficient. If it were damaged or out of service for a
significant amount of time, there would be no back-up vehicle for use. There are a
few different approaches the City might want to take if a second vehicle is
warranted. These include:
• Purchase a second truck identical to the first truck.
• Research the purchase of a container only which can be towed behind a
regular pick-up currently within the fleet (this would only be used when the
regular truck is in for repair, etc.)
• Purchase (research) a used container which would suffice our needs. They
are available, albeit sparingly at approximately 60% the cost of a new
container.
Additionally, standard City policy requires funds be deposited into the Equipment
Replacement Fund annually. This annual cost would be part of the budget for the
Animal Control Officer program.
Associated Equipment: The new Animal Control Officer would require equipment
to do his or her job. The total costs are anticipated to be: $2,000.
Training: The new Animal Control Officer would be required to undergo specific
training. Training programs are offered through the State Humane Association of
California. These costs are anticipated to be $600.
Computer Equipment: The new Animal Control Officer would require computer
equipment, potentially a laptop computer. This would cost approximately $3,000.
Prosecution: Currently, the District Attorney prosecutes any citations issued by the
County’s Animal Control staff. If the City’s Animal Control Officer issues citations for
violations of applicable regulations, as described in the Officer’s duties hereinabove,
such citations may require prosecution by the City Attorney’s Office. It is uncertain
as to whether the County will agree to handle citations issued by a City Animal
Control Officer in addition to those issued by their own officers. Depending on the
nature (infraction versus misdemeanor) and number of citations issued, there could
be a substantial impact on the resources of the City Attorney’s Office, which is
difficult to quantify at this time.
City of Culver City, California
City Council Agenda Item Report
COSTS
Option One: Continue Shelter and Field Services with LA County.
Description Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Sheltering and Field
Services with LA
County
$65,500
$67,465
$69,490
$71,575
$73,720
$347,750
The City of Culver City currently has $65,500 included in the fiscal 2008-09 budget
for animal shelter and field services with the County of Los Angeles Department of
Animal Control (LADAC). A 3% annual increase has been calculated for estimation
purposes.
Option Two: Part-time Animal Control Officer (not including City Attorney,
Supervisory or Clerical support) – continues sheltering and field services with LA
County. Attachment 1 contains details on the part-time Animal Control Officer costs.
Description Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Sheltering and Field
Services with LA
County – On-going
$65,500
$67,465
$69,490
$71,575
$73,720
$347,750
Personnel Costs:
Part-time Animal
Control Officer (20
hours/wk), Fully
Benefited (Beginning at
Step B) – On-going
$ 37,933
$ 41,184
$ 44,908
$ 48,817
$ 50,671
$ 223,513
Operating &
Maintenance: Includes
Fuel, Amortization
Charge, Training,
Supplies, etc. - On-
going
$ 12,460
$ 12,722
$ 12,995
$ 13,278
$ 13,573
$ 65,028
Start-up Expenses:
Includes Vehicle,
Computer Equipment,
Special Equipment –
$ 47,115
$ 0
$ 0
$ 0
$ 0
$ 47,115
TOTAL COSTS $163,008 $121,371 $127,393 $133,670 $137,964 $ 683,406
Option Three: Full-time Animal Control Officer (not including City Attorney,
Supervisory or Clerical support) – continues sheltering and field services with LA
County. Attachment 2 contains details on the full-time Animal Control Officer costs.
City of Culver City, California
City Council Agenda Item Report
Description Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Sheltering and Field
Services with LA County
– On-going
$65,500
$67,465
$69,490
$71,575
$73,720
$347,750
Personnel Costs:
Part-time Animal Control
Officer (20 hours/wk),
Fully Benefited
(Beginning at Step B) –
On-going
$69,615
$76,117
$83,565
$91,384
$95,092
$ 415,773
Operating &
Maintenance: Includes
Fuel, Amortization
Charge, Training,
Supplies, etc. - On-going
$ 12,460
$ 12,722
$ 12,995
$ 13,278
$ 13,573
$ 65,028
Start-up Expenses:
Includes Vehicle,
Computer Equipment,
Special Equipment –
$ 47,115
$ 0
$ 0
$ 0
$ 0
$ 47,115
TOTAL COSTS $ 194,690 $156,304 $ 166,050 $176,237 $182,385 $ 875,666
The hourly salary used to calculate the estimated personnel costs for options two
and three for an Animal Control Officer is $20.50 - $24.996. This is average with
other cities surveyed by the Human Resources Department who have in-house
Animal Control Officers. Assumptions include annual step increase of 5%, MOU
increase of 4%, and average O & M increase of 3%. The salary calculated for the
above costs assumes the employee would start at Step B and receive annual Step
increases.
It is important to note that the personnel costs above in Options Two and Three are
for a full-time or part-time Animal Control Officer position only. These options do not
include costs associated with supervision or clerical support. In addition, there may
be impacts to service levels to the Police Department and the City Attorney’s Office
with the addition of an Animal Control Officer.
Most cities surveyed who have an in-house program, have civilian supervisors who
report most often to Police Management, when the program is under the Police
Department. There is also clerical support, both part-time and full-time. This
amount has also not been factored in at this point. There may also be a need for
substantial City Attorney resources for prosecution of citations issued.
Financial Policies
City of Culver City, California
City Council Agenda Item Report
The implementation of an in-house Animal Control Officer would be a new program
for the City. The City’s Financial Policies, revisited and adopted by the City Council
in July 2007, include policies that are meant to maintain the City’s fiscal stability. A
few policies that should be reviewed when considering and discussing this item, and
all new programs brought before the City Council, are noted below, and a complete
copy of “Council Policy 5002 – Financial Policies” is included with this report as
Attachment 3.
LONG-TERM FINANCIAL PLANNING
OPERATING BUDGET POLICIES
Revenues:
1. On-going revenues will fund on-going expenditures and a diversified and
stable revenue system will be developed and maintained to protect
programs from short-term fluctuations in any single revenue source.
OPERATIONAL MANAGEMENT POLICIES
1. The City shall endeavor to avoid committing to new spending for operating
or capital improvement purposes until an analysis of all current and future
cost implications relating to those programs and projects is completed.
FINANCIAL MANAGEMENT POLICIES
2. All requests for City Council action shall include an analysis of the
immediate and future fiscal impact of such action. No appropriation for
new or expanded programs or staffing levels shall be approved without
identifying the amount and source of available funds.
REVENUE OPTIONS
Currently, the City projects approximately $40,000 in license revenues for FY 2007-
08. License revenues could double with additional pet licenses. The City Council
may consider several additional funding options as a basis for its decision to add an
Animal Control Officer.
1. Wait and review the City’s financial situation relative to the economy at mid-year.
2. Wait to see if there are additional revenues as a result of the increase of Citywide
fees and charges.
3. Recommend placing a future ballot measure for additional tax revenue for an
Animal Control Officer.
4. Reinstitute mandatory cat licensing to potentially achieve additional revenues. City of Culver City, California
City Council Agenda Item Report
5. Allocate $20,000 in funding previously identified for canvassing in FY 2007-08 for
the Animal Control Officer position in FY 2008-09.
FISCAL ANALYSIS:
Currently the City has budgeted $65,500 in FY 2008-09 for Los Angeles County
Animal Care and Control sheltering and field services.
The total estimated initial cost for a full-time Animal Control Officer would be
$129,190, which includes both ongoing and one-time costs. The total estimated
initial cost for a part-time Animal Control Officer would be $97,508, which includes
both ongoing and one-time costs. Creating this program would result in a decrease
in service levels both for the Police Department and City Attorney’s Office. There is
no plan at this time to hire additional supervisory or clerical staffing; therefore
existing staffing levels would support the program.
Dependent upon recommendations from the City Council regarding revenue options,
staff can bring back in depth revenue alternatives for further consideration.
ATTACHMENTS:
1. Part-time Animal Control Officer Costs Summary
2. Full-time Animal Control Officer Costs Summary
3. Council Policy Statement 5002 – Financial Policies
MOTION:
That the City Council:
A. PROGRAM OPTIONS
1. Allocate $129,190 in funding in FY 2008-09 for a full-time Animal Control Officer
and direct staff to take the necessary steps for creating such position (i.e.
creation of class specification, etc.); or
2. Allocate $97,508 in funding in FY 2008-09 for a part-time Animal Control Officer
and direct staff to take the necessary steps for creating such position (i.e.
creation of class specification, etc.); and/or City of Culver City, California
City Council Agenda Item Report
3. Designate an amount not to exceed $120,000 from the City Council Discretionary
Fund for FY 2008-09 to fund a full-time or part-time Animal Control Officer;
and/or
4. Transfer $20,000 in funding previously identified and approved by City Council
for canvassing in FY 2007-08 for the Animal Control Officer position in FY 2008-
09 and stop the County of Los Angeles from conducting canvassing for FY 2007-
08; and/or
5. Allocate $________ from the General Fund Reserve for the Animal Control
Officer and appropriate the funding in the City’s proposed FY 2008-09 Budget.
B. PILOT PROGRAM OPTIONS
1. Direct staff to conduct a 12-month Pilot program for a full-time Animal Control
Officer; or
2. Direct staff to conduct a 24-month Pilot program for a full-time Animal Control
Officer; or
3. Direct staff to conduct a 12-month Pilot program for a part-time Animal Control
Officer; or
4. Direct staff to conduct a 24-month Pilot program for a part-time Animal Control
Officer; or
5. Direct staff not to initiate a Pilot program.
C. REVENUE OPTIONS
1. Direct staff to identify additional revenues based on increased Citywide fees and
charges to fund the Animal Control Officer; and/or
2. Direct staff to bring back information regarding a future ballot measure for
additional tax revenue for an Animal Control Officer; and/or
3. Reinstitute mandatory cat licensing to potentially achieve additional license
revenues; and/or
4. Direct staff to research additional fees associated with animal care and control
services and enforcement.
D. OTHER
1. Maintain current service levels without the addition of an Animal Control Officer;
and/or
2. Direct staff as deemed appropriate.
MEETING DATE: 6/16/08
AGENDA ITEM: Consideration of the Recommendation of the City Council Committee on
Animal Control to Allocate Funding in FY 2008-09 for either 1) A Part-
Time Animal Control Officer or 2) A Full-Time Animal Control Officer.
ATTACHMENTS
Pages
1. Part-time Animal Control Officer Costs Summary 1
2. Full-time Animal Control Officer Costs Summary 2
3. Council Policy Statement 5002 — Financial Policies 3 - 12ATTACHMENT 1
Animal Control Estimated Program Budget
1 Part-Time Animal Control Officer In-House (20hours/week) (Year 1)
Comments
Salary - Animal Control Officer (Step B) 22,412 $21,322 -$25,995 per officer (4% incr will occur 111109) Annual
Overtime pay $ 2,185 Based on 2 hrs. per pay period (104 hrs/yr) Annual
Uniform Expense $ 250 $250 per year Annual
Fringe Benefits - Animal Control Officer $ 13,086 $12,595 - $14,698 per officer = 45% of salary + 100% of medical Annual
Total Annual Personnel Expenses $ 37,933
Amortization Charge $ 5,810 Vehicle Replacement Fund (One Vehicle - 8 Year Est Life Cycle) Annual
Fuel $ 4,250
ESTIMATE - (32 mi./trip)(30trips/mo.)=11,520 miles/yr
12-14 miles/gallon = 960 gallons + 240 gals/yr for patrols @ $4.50/gal Annual
Garage charges (Maintenance) $ 1,000 $1,000 per vehicle: will be increased as the vehicle ages Annual
Phone - communication $ 600 $50/month for 1 cell phone Annual
Office Expense $ 200 Office supplies Annual
Training & education $ 600 $600/each Annual
Total Annual Operating Expenses $ 12,460
Artn ISts1:04otal Exjleagis
PC & software, printer purchase $ 3,000 One PC/Laptop Start-up
Special Equipment $ 2,000 ACO equipment and cages Start-up
Vehicle Purchase $ 42,115 1 Equipped Vehicle / range from $34,000 -$46,000 Start-up
Start-up Expenses $ 47,115
Total. tRaleci t 9 ,51:1L
1 Part-Time (20 hours/week) Animal Control Officer In-House - Five Year Outlook
Year 1 Year 2 Year 3 Year 4 Year 5
Assuming
Step B
Assuming
Step C
Assuming
Step D
Assuming
Step E
Assuming
Step E
TOTAL
Total Annual Personnel Expenses $ 37,933 $ 41,184 $ 44,908 $ 48,817 $ 50,671 $ 223,512
Total Annual Operating Expenses $ 12,460 $ 12,722 $ 12,995 $ 13,278 $ 13,573 $ 65,028
Anri totat e,% 5 gg)-06. $ 0 l'A MORE
Start-up Expenses $ 47,115 $ - $ - $ - $ - $ 47,115
640.95
$
IOW Esh cvst 4 5i;W& . $ 53 SW24 57,902 A 335,ess
Assumptions:
Step Increase: 5%
MOU Increase: 4%
0 & M Increase: 3%ATTACHMENT 2
Animal Control Estimated Program Budget
1 Full-Time Animal Control Officer In-House (Year 1)
Comments
Salary - Animal Control Officer (Step B) $ 44,824 $42,644 (Step A) - $51,992 (Step E) per officer (4% incr will occur
1/1/09) Annual
Overtime pay $ 4,370 Based on 4 hrs. per pay period (104 hrs/yr) (Current amount shown
based on Step B salary) Annual
Uniform Expense 250 $250 per year Annual
Fringe Benefits - Animal Control Officer $ 20,171 $19,190 (Step A) - $23,395 (Step B) per officer = 45% of salary Annual
Total Annual Personnel Expenses $ 69,615
Amortization Charge 5,810 Vehicle Replacement Fund (One Vehicle -8 Year Est Life Cycle) Annual
Fuel $ 4,250
ESTIMATE - (32 mi./trip)(30trips/mo.)=11,520 miles/yr
12-14 miles/gallon= 960 gallons + 240 gals/yr for patrols @ $4.50/gal Annual
Garage charges (Maintenance) $ 1,000 $1,000 per vehicle: will be increased as the vehicle ages Annual
Phone - communication $ 600 $50/month for 1 cell phone Annual
Office Expense $ 200 Office supplies Annual
Training & education $ 600 $600/each Annual
Total Annual Operating Expenses $ 12,460
lkirib S en 82,1175
PC & software, printer purchase $ 3,000 One PC/Laptop Start-up
Start-up Special Equipment $ 2,000 ACO equipment and cages
Vehicle Purchase $ 42,115 1 Equipped Vehicle / range from $34,000- $46,000 Start-up
Start-up Expenses $ 47,115
TOtal EStirnalett-Cost •:129,190
1 Full-Time Animal Control Officer In-House - Five Year Outlook
Year 1 Year 2 Year 3 Year 4 Year 5
Assuming
Step B
Assuming
Step C
Assuming
Step D
Assuming
Step E
Assuming
Step E
TOTAL
Total Annual Personnel Expenses $ 69,615 $ 76,117 $ 83,565 $ 91,384 $ 95,092 $ 415,774
Total Annual Operating Expenses 12,460 $ 12,722 $ 12,995 $ 13,278 $ 13,573 $ 65,028
0 2075 :-::-.. 1:,6
$. 48fl 2 4:50 . o .;' s
Start-up Expenses
a
$ 47,115
$ - Total Estunated Cost 4 27,
Assumptions:
Step Increase: 5%
MOU Increase: 4%
0 & M Increase: 3%CITY OF CULVER CITY
COUNCIL POLICY STATEMENT
General Subject: Finance
Specific Subject: Financial Policies
Policy Number 5002
Date Issued 1/23/1995
Date Revised 7/16/2007
Effective Date 7/17/2007
Resolution No. 2007-R043
PURPOSE:
To establish a comprehensive set of financial policies for the City that will serve as a
guideline for operational and strategic decision making related to financial matters.
STATEMENT OF POLICY:
The following financial policies are intended to establish a comprehensive set of
guidelines for use by the City Council and City staff on decision-making that has a
fiscal impact. The goal is to maintain the City's financial stability in order to be able to
continually adapt to local and regional economic changes. Such policies will allow the
City to maintain and enhance a sound fiscal condition. This policy should be
implemented in conjunction with associated subsidiary policies, i.e. Mission Driven
Budgeting Policy (5001), Purchasing Policy, Investment Policy, Grants Policy, etc.
This financial policy will be reviewed annually to ensure that it remains current. The
policy will be included as part of the City's annual Adopted Budget, The City's
comprehensive financial policies shall be in conformance with all state and federal
laws, generally accepted accounting principles (GAAP) and standards of the
Governmental Accounting Standards Board (GASB) and the Government Finance
Officers Association (GFOA).
LONG-TERM FINANCIAL PLANNING
1. The City shall seek a balance in the overall revenue structure between more
stable revenue sources (e.g. Property Tax and Utility Taxes) and economically
sensitive revenue sources (e.g. Sales Tax and Transient Occupancy Tax).
When new revenue sources are proposed, they should be designed to achieve
a desirable balance.
2. The City shall encourage the economic development of the community as a
whole in order to provide stable and increasing revenue streams. It should be
the City's goal to not only attract new businesses but also to retain successful
businesses in the City. Objectives of the revenue strategy should also include:
avoiding an over reliance on revenue from any one particular industry;
recruitment and retention efforts to ensure a balance of revenue sources;
Page 1 of 10ensuring compatible uses; encouraging business synergies; and promoting the
growth of amenities and ancillary services to support business districts and
established industries.
3. The City shall develop and maintain methods for the evaluation of future
development and related fiscal impacts on the City budget.
4.
The City shall develop and implement a five-year infrastructure, facilities and
equipment maintenance/replacement plan, which shall be updated annually and
included in the City's Comprehensive Financial Plan. From this plan a
maintenance and replacement schedule will be developed and followed.
5. The City shall develop and implement a financial plan to address its funding
needs for issues like deferred maintenance and unfunded liabilities, which will
be included in the City's Comprehensive Financial Plan.
OPERATING BUDGET POLICIES
1.
The City Manager shall prepare and present a proposed two-year budget to the
City Council within all statutorily prescribed deadlines. The City Council will
adopt the first year budget with conceptual approval of the second year budget.
A public hearing will be conducted in June of each year to adopt the budget.
2.
A Budget Resolution will be adopted by the City Council annually, which
describes the budget amendment process and also specifies budget
amendment authority.
3. All departments will participate in the responsibility of meeting the City's
financial policy goals and ensure the City's long-term financial health. Budget
control is maintained at the department level.
4.
It is the City's policy to adopt a balanced budget where operating revenue is
equal to, or exceeds, operating expenditures. In the event a balanced budget is
not attainable, and the cause of the imbalance is expected to last for no more
than one year, the planned use of reserves to balance the budget is permitted.
In the event that a budget shortfall is expected to continue beyond one year, the
planned use of reserves must be developed as part of a corresponding strategic
financial plan to close the gap through revenue increases and/or expenditure
decreases.
5.
The operating budget shall serve as the annual financial plan for the City. It
shall serve as the City's management plan for implementing goals and
objectives of the City Council, City Manager and departments. The budget shall
provide staff the resources necessary to accomplish City Council determined
service levels.
LI
Page 2 of 106. During the annual budget development process, the existing base budget
should be thoroughly examined to assure removal or reduction of any services
or programs that could be eliminated or reduced in cost.
7. The annual review process should include an assessment to determine if funds
are available to operate and maintain proposed capital facilities and other public
improvements. If funding is not available for operations and maintenance costs,
the City will delay construction of new projects.
8. Any year-end operating surpluses will revert to unappropriated balances for use
in maintaining reserve levels set by policy and will be available for capital
projects and/or one-time General Fund expenditures upon approval of the City
Council.
9. Where practical, the City's annual budget will include performance measures of
workload, efficiency, and effectiveness.
10. The City's Comprehensive Financial Plan (Plan) is a long-term picture of the
City's finances and will be updated annually as part of the annual budget
development_ The Plan shall include forecasted expenditures and revenues of
at least five (5) years for each fund; however, a ten (10) year forecast is
preferred. The update will include an analysis of any substantial discrepancies
of previous projections.
Revenues:
1. The City will estimate annual General Fund revenues using an objective,
analytical process; specific assumptions will be documented and maintained.
Budgeted revenues will be estimated conservatively using accepted standards
and estimates provided by the state, other governmental agencies, and/or
reliable economic forecasters when available.
2. Specific revenue sources will not be dedicated for specific purposes, unless
required by law or Generally Accepted Accounting Principles (GAAP). All non-
restricted revenues will be deposited in the General Fund and appropriated
through the budget process.
3. On-going revenues will fund on-going expenditures and a diversified and stable
revenue system will be developed and maintained to protect programs from
short-term fluctuations in any single revenue source.
4. The City shall prepare quarterly reports which discuss revenue projections in
light of actual receipts, and shall provide new projections, as appropriate.
Page 3 of 10Appropriations:
1. The City shall, to the extent possible, pay for current year expenditures with
current year revenues. Where authorized activities/equipment remain
incomplete and/or unpurchased, revenues and/or fund balance may be carried
forward at the City Manager's direction to the next fiscal year to support such an
activity/purchase.
2. The City shall avoid budgetary procedures which rely on financial strategies that
defer payment of current operating expenses to future years.
3. Department Heads are responsible for ensuring department expenditures stay
within the department's budgeted appropriation.
4. The City Manager will notify the City Council immediately of the necessity to
increase any departmental appropriation; a budget amendment needs to be
approved by a 415th vote of the City Council prior to such over-expenditure.
GENERAL FUND RESERVE POLICY
1. It is a goal of the City to maintain a general operating reserve of, at a minimum,
25% of projected General Fund operating expenditures for each fiscal year and
an additional 5% for emergency situations (excluding debt service, fund
transfers, and encumbered funds). These reserves are designed to be used in
the event of a significant financial emergency. Should the General Fund
reserve fall below 30%, the City will implement measures to restore the reserve
percentage to 30% in the following fiscal year.
2. The unreserved portion of General Fund Fund Balances can be loaned to the
Redevelopment Agency or to the Refuse or Sewer Funds for a total amount not
to exceed 50% of the "Unreserved" fund balance shown in the most current
Comprehensive Annual Financial Report (CAFR).
a. Such loans should be for a term of five years or less and have a call
provision of no more than 120 days. Furthermore, the loan must be secured
by assets such as real property, tax increment fund, or secured by the user
fee and/or other sound funding source.
b. The interest rate for a loan originated by the City will be determined by the
Chief Financial Officer and should be set based on rates of investments
and/or loans with comparable terms on or about the date the loan is
executed.
c. Such loan shall be considered as part of the reserve calculation.
3. The City shall establish, at the beginning of each fiscal year, an "appropriated
reserve" to provide funding for special projects/programs approved by City
Council after the annual budget is adopted, for unanticipated expenditures of a
nonrecurring nature, or to meet unexpected increases in current service
delivery costs. The amount of this reserve will be approved annually by the City
Council.
Page 4 of 10
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4. A portion of any uncommitted fund balance in excess of 30% of annual
revenues resulting from the previous fiscal year's operations should be
committed to capital improvement projects or should be used to retire existing
debt, fund future liabilities or potential legislative impacts, establish or replenish
equipment replacement funds, and/or establish or replenish deferred
maintenance funds.
5. One-time funds should not be used to fund ongoing City programs. Any one-
time revenue receipt during the fiscal year should be recognized and recorded
in a "non-recurring revenue source" category. One-time revenue windfalls
include: sales of city-owned real estate, CalPERS rebates, lump sum (net
present value) savings from debt restructuring, litigation settlement, unexpected
revenues, and other similar sources of revenue as designated by the City
Council.
6. The City should establish and maintain a designated reserve fund for any
anticipated future expenses that will require a certain level of steady funding
source, i.e. unfunded future retiree medical cost and pension cost. It is prudent
to set aside these funding needs each year in order to maintain City's financial
stability.
FINANCIAL REPORTING POLICIES
Accounting Standards:
1. The City's accounting and financial reporting systems shall be maintained in
conformance with all state and federal laws, generally accepted accounting
principles (GAAP) and standards of the Governmental Accounting Standards
Board (GASB) and the Government Finance Officers Association (GFOA). The
City will make every attempt to implement all changes to governmental
accounting practices at the earliest practicable time.
Annual Audit:
1. An annual audit will be performed by an independent public accounting firm with
an audit opinion to be included with the City's published Comprehensive Annual
Financial Report (CAFR).
2. The independent firm will be selected through a competitive bidding process at
least once every five years. The contract will be for an initial period of three
years with two additional one-year options at the City Council's discretion. The
Budget & Finance subcommittee and City Manager will review the qualifications
of prospective firms and make a recommendation to the City Council. The audit
contract, and any extensions, will be awarded by the City Council.OPERATIONAL MANAGEMENT POLICIES
1. The City shall endeavor to avoid committing to new spending for operating or
capital improvement purposes until an analysis of all current and future cost
implications relating to those programs and projects is completed.
2.
All departments will participate in the responsibility of meeting policy goals and
ensuring long-term financial health. Future service plans and program
initiatives will be developed to reflect current policy directives, projected
resources and future service requirements.
3. Departmental requests for increases in staffing will be thoroughly analyzed; only
those that meet adopted program initiatives and policy directives will be
considered. To the extent feasible, personnel cost reductions will be achieved
through attrition.
User Fees and Charges and Development Impact Fees:
1. All non-enterprise user fees and charges will be examined or adjusted annually
to determine the direct and indirect cost of service recovery rate. Where direct
services to users can be measured, the City shall consider use of appropriate
fees, charges or assessments rather than general tax funds.
2.
User fees and charges for specialized services shall be established at a level
related to the cost of providing such service except where the City Council has
determined there is a public benefit to subsidize the service with tax based
revenue. The acceptable recovery rate and any associated changes to user
fees and charges will be approved by the City Council following public review.
3. The City shall identify the costs associated with new development as a basis for
establishing development impact fees. The long-term benefit of the
development to the City should be considered in establishing such fees.
Grant Management:
1. The City shall actively pursue federal, state and other grant opportunities when
deemed appropriate. Before accepting any grant, the City shall thoroughly
consider the implications in terms of ongoing obligations that will be required in
connection with acceptance of said grant.
2.
The term of Grant funded positions should be clearly identified and presented to
the City Council for approval. It is mandatory to disclose if General Fund
revenues will be needed to fund a position after the Grant expires.
3. Grant funding will be considered to leverage City funds. Inconsistent and/or
fluctuating grants should not be used to fund ongoing programs. Programs
financed with grant monies will be budgeted in separate cost centers, and the
service program will be adjusted to reflect the level of available funding. In the
event of reduced grant funding, City resources may be substituted only after all
program priorities and alternatives are considered.
Page 6 of 104. All externally mandated services for which funding is available shall be fully
costed out, including overhead, to allow for complete reimbursement of
expenses.
Revenue Collection Policy:
1.
The City will pursue revenue collection and auditing to assure that monies due
the City are accurately received in a timely manner.
2. The City will seek reimbursement from the appropriate agency for State and
Federal mandated costs whenever possible.
3.
The City should centralize accounts receivable/collection activities so that all
receivables are handled consistently.
Accounts receivable management and diligent oversight of collections from all
revenue sources are imperative. Sound financial management principles
include the establishment of an allowance for doubtful accounts. Efforts should
be made to pursue the timely collection of delinquent accounts. When such
accounts are deemed uncollectible, they should be written-off from the financial
statements.
FINANCIAL MANAGEMENT POLICIES
1. Staff shall keep City Council apprised of financial opportunities available to the
City and shall develop appropriate recommendations.
2. All requests for City Council action shall include an analysis of the immediate
and future fiscal impact of such action. No appropriation for new or expanded
programs or staffing levels shall be approved without identifying the amount and
source of available funds.
3. All externally mandated services for which funding is available shall be fully
costed out, including overhead, to allow for complete reimbursement of
expenses.
Cash Management Investment:
1.
Cash and investment programs will be maintained in accordance with California
Government Code Section 53600 et seq. and the City's adopted investment
policy and will ensure that proper controls and safeguards are maintained.
Pursuant to State law, the City, at least annually, revises, and the City Council
affirms, a detailed investment policy.
2.
Reports on the City's investment portfolio and cash position will be developed
and presented to the City Council on a quarterly basis, in conformity with the
California Government Code.
Page 7 of 103. City funds will be managed in a prudent and diligent manner with emphasis on
safety, liquidity, and yield, in that order.
CAPITAL IMPROVEMENT PROJECT POLICIES
A five-year Capital Improvement Plan must be developed and updated annually,
including anticipated funding sources. Capital improvement projects are
defined as infrastructure or equipment purchases or construction which result in
a capitalized asset and have a useful (depreciable) life of two years or more.
2.
The capital improvement plan will identify, where applicable, current operating
maintenance costs and funding streams available to repair and/or replace
deteriorating infrastructure and to avoid significant unfunded liabilities.
3. The City should develop and implement a post-implementation evaluation of its
infrastructures condition on a specified periodic basis, estimating the remaining
useful life, and projecting replacement costs.
4.
The City shall actively pursue outside funding sources for all Capital
Improvement Projects. Outside funding sources, such as grants, shall be used
to finance only those Capital Improvement Projects that are consistent with the
five-year Capital Improvement Project and local governmental priorities, and
whose operating and maintenance costs have been included in future operating
budget forecasts.
5. Capital improvement lifecycle costs will be coordinated with the development of
the Operating Budget. Future operating, maintenance and replacement costs
associated with new capital improvements will be forecasted, matched to
available revenue sources, and included in the Operating Budget. Capital
project contract awards will include a fiscal impact statement disclosing the
expected operating impact of the project and when such cost is expected to
occur.
6. The City must carefully seek and analyze the appropriate type of financing
instrument appropriate for financing capital projects. Several options are
available — general obligation debt, fee-supported debt, fund reserves, etc. All
debt financing mechanisms shall be carefully considered and analyzed for fiscal
benefit and cost effectiveness. Long-term borrowing shall be restricted to
projects too large to be financed from current revenues (pay-as-you-go).
Where possible, special assessment, revenue or other self-supporting bonds
shall be used in lieu of general obligation bonds.
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Page 8 of 10DEBT MANAGEMENT POLICIES
Issuance of Debt:
1. The City will not use long-term debt to pay for on-going operations. The use of
bonds or certificates of participation will only be considered for significant capital
and infrastructure improvements.
2. New debt issues, and refinancing of existing debt, must be analyzed for
compatibility within the City's overall financial planning within the
Comprehensive Financial Plan. The review shall include, but not be limited to,
cash flow analysis and the maintenance of the City's bond rating. Annual debt
service shall not produce an adverse impact upon future operations.
3. Debt financing should not exceed the useful life of the infrastructure
improvement with the average (weighted) bond maturities at or below twenty
years.
4.
A ratio of current assets to current liabilities of at least 2 to 1 will be maintained
to ensure the City's ability to pay short-term obligations (i.e. current
assets/current liabilities 2).
Credit Rating:
1. The City will seek to maintain and, if possible, improve its current bond rating(s)
in order to minimize costs and preserve access to credit.
2.
It is the City's goal to maintain an AAA/Aaa credit rating from all three major
rating agencies. The City may pay the bond insurance which is considered as
part of the rating, however, the rating agency does evaluate the structure of the
bond to validate the bond rating. The factors that contribute to a high rating
include the City's financial management practices, low debt levels, budgetary
and fiscal controls, and accountability. To support this policy, the City will
continue to maintain its position of full financial disclosure and proactive fiscal
planning.
INTERNAL SERVICE FUNDS
Self Insurance Fund:
1. The Self-insurance fund pays for insurance premiums, benefit and settlement
payments, and administrative and operating expenses. It is supported by
charges to other City funds for the services it provides. These annual charges
for service shall reflect the five-year historical experience and shall be set to
equal the annual expenses of the fund.
2. Self-insurance reserves (Liability and Workers' compensation) will be
maintained at a level which, together with purchased insurance policies,
adequately indemnify the City's property, liability, and health benefit risk. A
qualified actuarial firm shall be retained on an annual basis in order to
recommend appropriate funding levels, which will be approved by Council. The
City shall endeavor to maintain reserves equal to 30% of the net present value
Page 9 of 10Page 10 of 10
of such future liabilities, with no less than $2 million to cover potential swings in
working capital.
Equipment Replacement Fund:
1. The City shall maintain a fund with a sufficient balance for replacement of
vehicles, equipment (including technology and communication equipment)
2. Vehicle replacement will be accomplished through the use of an amortization
methodology structure. The rates will be revised annually to ensure that
charges to operating departments are sufficient for operation and replacement
of vehicles and other capital equipment (fleet, computers, phones, copiers,
etc.). Replacement costs will be based upon equipment lifecycle financial
analysis.
ENTERPRISE FUNDS (Includes Sewer Fund, Refuse Fund and Transportation
Fund)
1. All Enterprise Funds user fees will be examined annually to ensure that they
recover all direct and indirect costs of service, provide for capital improvements
and maintenance, and maintain adequate reserves.
2. Rate increases shall be approved by the City Council following formal noticing
and a public hearing. Rate adjustments for Sewer Fund operations will be
based on five-year financial plans unless the City Council directs otherwise.