City of South Gate FY Proposed Budget

Breakdown of General Fund Reserves Category Reserves Results Reserves Reallocation Reserves Unassigned19,146,3354,000,00023,146,335(11,000,000)12,146,335 Emergency Reserve2,000,000 3,000,0005,000,000 Capital Asset Replacement2,000,000 4,000,000 Building & Infrastructure Maintenance002,000,000 Courthouse Rehab1,000,000 4,000,0005,000,000 Capital Projects3,116,000 Parks & Rec221,047 Public Works115,000 Non-spendable /Restricted14,720,769 Totals42,319,1514,000,00046,319,1510 2

Breakdown of General Fund Reserves Category Reserves Establish New Funds Revised Reserves Surplus/Use of Reserves Estimated Reserves Unassigned12,146,335 1,826,80513,973,140 Emergency Reserve5,000,000 Capital Asset Replacement4,000,000(4,000,000)00 Building & Infrastructure Maintenance2,000,000(2,000,000)00 Courthouse Rehab5,000,000(5,000,000)00 Capital Projects3,116,000 (3,116,000)0 Parks & Rec221,047 Public Works115,000 Non-spendable /Restricted14,720,769 Totals46,319,151(11,000,000)35,319,151(1,289,195)34,029,956 3

Notes on General Fund Reserves  FY projected to close with a $4 million operating surplus  That will bring the unassigned portion of the general fund reserves to $23.1 million (52% of annual operating expenditures)  Staff recommends a reallocation of the unassigned reserves  Reallocate $11 million as follows:  $3 million to the Emergency Reserve – bringing total of Emergency Reserve to $5 million  $2 million to the Capital Asset Replacement Fund (CARF) – bringing total CARF to $4 million  $2 million to create a Building & Infrastructure Maintenance Fund  $4 million to the Courthouse Rehabilitation Fund – bringing total to $5 million  Then move the following reserves out of the General Fund into their own separate funds:  Capital Asset Replacement Fund (CARF) – $4 million  Building & Infrastructure Maintenance Fund - $2 million  Courthouse Rehabilitation Fund – $5 million  Unassigned portion of the general fund reserves will be reduced to $12.1 million (27% of annual operating expenditures)  In addition to $12.1 million in unassigned reserves, there is also a $5 million Emergency Reserve in the General Fund 4

General Fund Adopted Budget History 5

Proposed General Fund Operating Budget FY Budget Operating Revenues46,704,819 Operating Expenditures44,878,014 Operating Surplus1,826,805 6

General Fund Revenues – By Category Revenue CategoryFY Property Tax11,736,840 Bradley-Burns 1% Local Sales Tax10,197,000 South Gate 1% Sales Tax9,677,000 Franchise Taxes2,933,100 Business License Tax1,370,000 Other Taxes440,300 Permits1,345,750 Fines & Forfeitures990,000 Use of Money & Property1,710,000 Intergovernmental115,141 Fees & Charges2,293,544 Other Revenues3,896,144 Total Operating Revenues46,704,819 7

Sales Tax Growth 57% growth since

Property Tax Growth 18% growth since

Total Operating Revenue Growth 32.5% growth since

Notes on General Fund Revenues  Sales tax revenues from the azalea shopping center were $2.6 million in the first year and projected to be $3.1 in the second year  Sales tax revenues will not continue to grow at the same rate; they will flatten out going forward  Property tax revenues will also begin to flatten out  Other revenues should remain fairly constant 11

General Fund Operating Expenditures By Department DepartmentFY City Council204,918 City Clerk593,964 City Treasurer21,946 City Attorney1,089,387 City Manager1,014,014 Administrative Services3,277,557 Parks & Recreation6,767,939 Police25,310,025 Community Development2,924,742 Public Works3,673,522 Total Operating Expenditures44,878,014 12

GF Operating Expenditures By Department 13

General Fund Expenditures – By Category CategoryFY % Employee Services32,956,66873% Supplies & Services9,586,87122% Debt Service2,334,4755% Total Operating Expenditures44,878,014100% Capital Assets2,007,688 One-Time Expenditures63,621 Capital Improvement Projects3,524,160 Total General Fund Expenditures50,473,483 14

Breakdown of Operating Expenditures 15

Notes on General Fund Expenditures  FY expenditures include the 7.8% salary increases  CalPERS employer rates increased as follows:  Miscellaneous – from % to %  Safety – from 20.23% to 21.23%  Medical insurance costs expected to increase by 5%  Cost allocation plan was completed to more accurately determine the total cost of various programs and more equitably allocate those costs to operating departments  In addition to the $44.8 million of operating expenditures budgeted, there is $3.5 million budgeted for capital improvement projects, as well as $2.1 million for capital asset & one-time purchases 16

Capital Improvement Projects (using General Funds) City Hall Complex Facility Improvements Sports Center Roof Replacement Seaborg Building Relocation Hollydale Playground Replacement Improvements to Parks Picnic Areas Courthouse Adaptive Reuse Project 17

Capital Asset Purchases Fitness Center Equip (expansion area)Route Truck (replacement) Lighting at Hollydale ParkGraffiti Truck (replacement) Irrigation Truck (replacement)Ford Explorer Skip Loader (replacement)Aerial Lift Truck (replacement) Ride on Mower (replacement)City Hall Office Improvements 18

One-Time Purchases Consultant – inventory of fixed assets Digital camera Technology upgrades in Council Chambers Relamping interior lights at SG Sports Center Replace lights at SG Park Baseball Fields Architectural re renovation of GCH 19

Departmental Staffing Levels DepartmentFull- Time Part-TimeContractTotal City Council0505 City Clerk4105 City Treasurer0101 City Attorney0000 City Manager7007 Administrative Services Parks & Recreation Police Community Development Public Works Totals

Proposed Staffing Changes  Convert 1 contract Computer Information Services (CIS) position to Full-Time (Administrative Services)  Convert 1 hourly graphics positon to a FT Intermediate Typist Clerk position (Parks & Recreation)  Convert 1 hourly Community Development Technician II position to FT (Community Development)  Convert 1 hourly Intermediate Typist Clerk position to FT (Public Works)  Net change = 0 (+4 Full-time; -3 hourly; -1 contract) 21

Proposed Staffing Changes  Create 1 Part-Time Family Violence Specialist position, which will be fully reimbursable (Police Department)  Create 2 Part-Time Maintenance Helper positions for weekend graffiti clean-up (Public Works)  Create 1 Part-Time Maintenance Helper position for removal of illegal signs (Public Works)  Net change = + 4 Part-Time 22

Health of City Funds Healthy Funds General FundCDBG Fund Gas Tax FundHome Program Fund Bicycle Pathway FundUDAG Fund Prop A FundPAC Fund Prop C FundSuccessor Agency Fund AQMD FundLow-Mod Housing Fund Measure R FundWater Fund Grant FundsCIP Fund 23

Health of City Funds Watch-List Funds Traffic Safety FundHousing Authority Fund Asset Seizure FundInternal Service Funds: Lighting & Landscape FundInsurance Fund Sewer Maintenance FundInformation System Funds Refuse Removal FundFleet Management Fund Street Sweeping Fund 24

Issues of Continuing Concern  Possibility of State take-aways  Increasing CalPERS retirement costs  Increasing health insurance costs  Funding of unfunded OPEB (Other Post- Employment Benefits) 25