1. DRAFT FY 2014-2016 Resource Allocation Plan / Two Year Plan
City of Sausalito
DRAFT
FY Resource Allocation Plan / Two Year Plan
“Investing in the Quality of Sausalito’s Future”

2. 2. Department / CIP Discussions
Agenda FY
Budget
1. Budget Highlights
2. Department / CIP Discussions
3. Long-Term Financing
4. New Budget Format
5. Council Adoption

3. Strategic Budget Strategies
Optimize revenues
Cost streamlining for structural balance
Maintaining reserves with risk-based analysis
Linkages to Priority Calendar

4. Budget Highlights – Rebounding Economy
Generating increasing tax revenues – both elastic and inelastic

5. CalPERS Pension Reform
Paid off Side Fund
Misc Side Fund liability of $413,515 and Fire Safety Side Fund liability of $1,333,859
Closed Tier 1 to new entrants,; and created Tier 2 for Classic employees; and created Tier 3 for PEPRA employees;
Required Tier 1 employees to pay the Final Average Compensation – 1 Year premium of the Employer’s Contribution Share to achieve equity with Tiers 2 and 3.
Lowered Pay Ranges
PENSION REFORM SAVINGS
Savings from Tier 2
40,444
46,720
48,063
Savings from Tier 3
45,480
52,639
54,834
Savings from EE paid ER Contributions
37,959
37,969
38,755
Interest Savings from Misc Side Fund Payoff
29,358
27,905
26,235
Interest Savings from Fire Side Fund Payoff
95,268
92,634
89,512
Total Annual Savings
248,508
257,868
257,398
763,774

6. Full Medical Cost OPEB 29 Current Retirees 36 Eligible Retirees
Mean and Median Age grows
Medicare
Lowers premium
Shifts portion of cost to retiree
31 Additional Eligible Retirees
17 employees converted from DB to DC
14 employees removed from eligibility for DB
Mean and Median Age static
Medicare premium static
Shift of cost static

7. Budget Highlights – Labor Reform
Generating significant savings of annual pension and retiree health benefit costs

8. Budget Highlights – Maintaining Reserve Funds

9. Budget Highlights – MLK NOI

10. Budget Highlights – Sewer Fund

11. Budget Highlights – Capital Improvements
Continuing street improvements including concrete streets reconstruction
Increased funding for small parks improvements
Projected ferry terminal shoreside improvements from grant resources

12. Budget Highlights – Continuation of excellent city services: public safety, library, recreation, beautification, maintenance services

13. Priority Calendar Linkage
Priority Calendar Section page 157 & 158
Department budgets

14. Summary Budget Highlights
Operating Budget:
Rebounding economy generating increasing tax revenues – both elastic and inelastic
Labor cost reforms generating significant savings of annual pension and retiree health benefit costs
Maintaining city reserve funds
MLK capital purchase and capital improvements leases retired
Adjusts sewer utility rates to keep pace with environmental projects that protect Richardson Bay and citizens from health hazards
Continuation of excellent city services: public safety, library, recreation, beautification, maintenance services
Capital Improvement Plan:
Continuing street improvements including concrete streets reconstruction
Increased funding for small parks improvements
Projected ferry terminal shoreside improvements from grant resources
Employs strategic use of long-term financing to accelerate sewer infrastructure projects

15. Current Budget Summary
Yes,
Current levels of service are adequately funded (stable)
The budget is structurally balanced and sound (sustainable)
Reserve balances sufficient funded based on a risk analysis and mitigation strategy (resilient);
but…
Significant additional infrastructure investment needed:

16. Long Term Financial Planning – Operating Budget
Assumptions
3% annual wage inflation
5% annual health care inflation
11% average annual pension cost increase (worst case scenarios)
Most expensive implementation of assumption changes
Investment 5th percentile)
2% general inflation
3.5% property tax inflation
4% elastic tax inflation

17. Long Term Financial Planning – Capital Budget

18. Capital Infrastructure Needs
The City does not currently have the funds to adequately address critical infrastructure needs.
Maintaining and Repairing 85-year-old Storm Drains
Storm drains are completely deteriorated/rusted through
Upgrades are needed to prevent pollutants, garbage and sediment from entering Richardson’s Bay
Maintaining and Repairing Neighborhood Streets and Fixing Broken Sidewalks
Deteriorating streets on steep hillsides create hazardous conditions
Crowded sidewalks must be maintained for pedestrian safety and access for seniors and the disabled.

19. Proposal for Enhanced Revenues
Sausalito constituents place a high value on maintaining the City’s fiscal stability and place a high priority on a number of key services.
In order to improve essential City services that impact Sausalito’s quality of life, by a two-to-one margin a solid majority (61%) of constituents say they would be supportive of a potential temporary local sales tax measure to address community needs.
½¢ Sales Tax Measure should generate approximately $1 million annually

20. A Temporary Local Sales Tax Generates Local Funds for Local Needs
Would ensure a guaranteed source of local funding to improve essential City services that cannot be taken by Sacramento
Tax dollars would be spent locally for Sausalito residents
With tens of thousands of tourists coming to Sausalito each year to shop, would ensure that out-of-towners pay their fair share for the strain they place on local services when they visit our city
Is not applied to food purchased as groceries or prescription medication
Recommended fiscal accountability provisions:
Requiring independent financial audits with public review
Including a sunset
Requiring all funds to remain in Sausalito

21. Traditional Line-Item Activity & Performance Budget
New Budget Format
Item
Detail
Description
Narrative description of purpose of department/division
Ongoing Tasks
Typical duties and responsibilities, by programmatic activity
Strategic Plan
How department/division participates in meeting the strategic plan goals and objectives
Priority Calendar
What are department/division Priority Calendar items
Staffing
Full-time equivalents (FTEs for full-time and part-time staff by position
Performance Indicators
Inputs, Outputs, Outcomes, Productivity, Efficiency & Effectiveness Indicators
Department Revenues
Revenues generated by / associated with departmental/divisional activities
Department Expenditures
Expenditures by major category
Traditional Line-Item
Activity & Performance Budget
Budget Orientation
Money Control
Service Delivery
Basic Budget Unit
Line-Item
Activity
Results Measurement
Budget Control
Budget Control & Performance Measurement
Budget Period
Two year
Multi-year

22. Why is the new format important?
Establishes an accountability mechanism
To the public for the governing body’s decisions
To the policy makers for department manager performance
Makes spending priorities for the next year(s)
Determines actual service levels of programs
Allocates funds and establishes responsibility for outcomes to particular organizational units
Informs citizens of government policy and funding decisions and priorities
Provides information on the costs and activities of government organizations
Links long-term objectives with shorter term resource usage

23. Fiscal Transparency Tool

24. “Building on the Basics”
Now that makes good cents!

25. Adopt Budget
Approving the Appropriation Limit for FY Pursuant to Article XIII B of the California Constitution (Gann Limit)
Establishing the Authorized Staffing Levels and Salary Ranges for All Permanent and Temporary Positions for Fiscal Year
Approving the Budget for the Fiscal Year

26. Gann Limit

27. Authorized Staffing Levels

28. FY Budget

29. More Questions… “What if? Why not?”

30. Adopt Budget
Approving the Appropriation Limit for FY Pursuant to Article XIII B of the California Constitution (Gann Limit)
Establishing the Authorized Staffing Levels and Salary Ranges for All Permanent and Temporary Positions for Fiscal Year
Approving the Budget for the Fiscal Year