Adoption of the Fiscal Year 2019 Recommended Operating Budget Joint Finance Committee and City Council Meeting – Item C.5. City Council Meeting – Item 25 June 18, 2018

Fiscal Year 2019 Recommended Operating Budget * * Includes reinstatement of 5 defunded Police Officer positions

Amendments to Recommended Budget Three amendments to the originally presented Recommended Operating Budget: Defund but retain the five Police Officer positions recommended for reduction No financial impact Increase recommended revenues in the Library Special Tax Fund by $108,431 Reduce recommended revenues in the Water Fund by $1.7 million based on projected retail sales

Recommended Actions Close the public hearing and adopt by resolution the 2019 Operating Budget as amended. Adopt a resolution determining the General Fund Transfer from the Light and Power Fund. Direct the City Attorney to prepare an amendment to the PMC moving the responsibility for the Foothill Workforce Development Board to the City Manager’s Office.

Recommended FY19 Operating Budget Thank you

Power Fund Transfer Gross Income from the sale of electric energy at rates and charges fixed by ordinance. Gross Income Calculation includes: Base Rate Revenue Green Sales Energy Service Charge Transmission Revenue FY 2017 Gross Income - $168,462,773.08 10% of Gross Income - $16,846,227.31

Total Avail. For FY 2018 Transfer Power Fund Transfer Net Income Calculation to determine transfer: Operating Net Income for FY General Fund Transfer Less Principal Debt Service Transfer may not exceed one-half of Net Income Calculation Amount each for Sections 1407 and 1408 of the Municipal Code (total transfer cannot exceed 100% of net income) FY 2017 Net Income FY 2017 GF Transfer FY 2017 Principal Payments Total Avail. For FY 2018 Transfer Actual FY 2018 Transfer % of Avail. 13,700 17,371 (11,290) 19,781 16,846 85%

Appropriations By Category – All Funds (In millions)

Appropriations By Category – General Fund (In millions)

Revenues By Category – General Fund (In millions)

Appropriations by Department – General Fund (In millions)

Key Challenges Maintain Essential Services Address aging infrastructure CIP appropriations of $83.45 million $745 million future funding needs Fire stations $100+m 911 emergency response communications $8m Street lighting $21m Sidewalks $12m Maintain Essential Services Eliminate structural deficit Preserve General Fund reserve levels Falling below 20% target Should be adding $1.6m for FY19 Additional costs for CSB and YWCA

Fiscal Reality Significant underinvestment in infrastructure Recommended FY19 budget is balanced $2 million in reductions (14.8 FTEs) $1.2 million in new revenues $250,000 in fund shifts Significant underinvestment in infrastructure General Fund appropriations to capital only $1.16m Without additional revenues Reductions will be required each and every year FY 18 $4.1 million and 14 FTEs Essential City services will be at risk

Projected Fiscal Trends Department of Finance

General Fund Reserve

Proposed Reductions to Close the Gap for FY19

Residents Want to Maintain Services

Year Approved by Voters LA County Tax Rates City Local Tax % Year Approved by Voters Commerce 0.5 2012 Compton 1.0 2016 Culver City Downey El Monte 2008, 2013, 2017 Inglewood 2006 La Mirada Long Beach Lynwood Pico Rivera 2008 San Fernando 2013 Santa Monica 2010, 2016 South El Monte 2010 Southgate

Current and Projected Fiscal Trends

Projected Fiscal Trends Department of Finance