City of San Marino staff presented a balanced city budget for fiscal year 2017-2018 to the San Marino City Council last Friday during a special meeting of the council at Crowell Public Library.
City revenue is projected to increase to $29.4 million, a $1.6 million increase since last year, which can be attributed to a projected six percent increase in property tax revenue. Property tax is 62 percent of total revenue.
The proposed $29.3 million of expenses include a $24.4 million operating budget, $3.9 million capital improvement projects budget and $1 million capital equipment purchases budget.
As a result of the balanced budget, the city expects to contribute a total of $80,937 to its fund balances, or reserves, which is nearly 100 percent of the city’s operating budget, according to Interim City Manager Cindy Collins.
Collins explained that staff implemented a zero-based budget approach—consistent with one of Mayor Richard Sun’s mayoral goals—to prepare next year’s budget.
The new citywide approach, which has previously been used by the recreation department, saved the city $268,711 in the area of services and supplies.
Services and supplies savings could have been greater, Collins noted, but the city expects to experience some one-time one-year costs next year—such as a new phone system that could cost up to $95,000.
In the area of personnel, she said, the city took a conceptual zero-based budget approach.
“Because the city, by policy, delivers services, the personnel budgets were prepared using the concept of zero based budgeting, which included the evaluation of services, activities and delivery methods,” Collins said.
The conceptual approach will decrease contractual services by internalizing the operation of certain services.
Personnel will also better accommodate demands for service across city departments.
As a few examples, Collins noted that a work order system at public works might improve efficiencies in that department.
The dissolution of the tri-city shared fire command agreement and elimination of the deputy fire chief position will cut costs at the fire department.
A restructured administration department may help control workers compensation costs along with a variety of other efficiencies gained with the hiring of an administrative services director.
Collins emphasized that the city’s $22.5 million unfunded pension liability and aging infrastructure would continue to pose a challenge to the city’s finances.
“You have to address those two areas. You can’t let those just be the secondary aside priorities, because they end up costing more money,” she stated, noting that the city will spend $1.4 million in the upcoming year to pay down the liability.
“A lot has been done this year to get a foundation for the city to work off of,” Collins added, noting that the city received an actuarial study of its liability, prepared a infrastructure investment plan, and commissioned the establishment of an long range financial strategic planning ad hoc committee to address these issues.
Contract Finance Director Misty Cheng presented revenues and expenses in a variety of different ways.
In addition to the 62 percent of revenue received from property tax, the city earns 10 percent of its revenue from charges for service, another 10 percent from other governments, 5 percent from the Utility User Tax, two percent from donation and 12 percent from other sources.
On the expense side, 61 percent, or $17.8 million, is earmarked for personnel, 23 percent for services and supplies, 13 percent for equipment, and 3 percent for capital equipment purchases.
The San Marino Police Department takes the largest slice of the city $24.4 million operating budget at 28 percent, or $6.86 million, followed by Fire and Emergencies services at 26 percent, Parks and Public Works at 14 percent, Administrative Services at 12 percent, Recreation Department at 9 percent, and the Library Department at 6 percent, or $1.58 million.
Capital Improvement Plan
Parks and Public Works Director Dan Wall presented the $3.94 million capital improvement plan budget. Wall stated that 51 percent, or $2 million, of that budget will be spent on streets.
The proposed streets budget is an $800,000 increase from last year. A recent assessment of the city’s pavement found that a $1.2 million annual streets budget would result in an overall decrease in pavement quality.
A $2 million annual budget over 10 years would maintain the current quality of San Marino’s streets at a pavement condition index of 64, but still result in a $13 million increase in deferred maintenance.
Wall hopes to achieve a pavement condition index of 80 and eliminate the existing $13.65 million maintenance backlog.
In the 2017-18 fiscal year, Wall said, segments of California Boulevard, San Marino Avenue, Canterbury Road, Euston Road, Oakwood Drive, Palmas Drive, and Somerset Place will be repaved.
Nearly $1 million will be spent at Lacy Park. The Lacy Park Rose Arbor will be completely reconstructed—a project funded by a sizeable donation by former Mayor Matthew Lin and wife, Joy.
A Lacy Park irrigation system will provide automated irrigation to all of Lacy Park. Wall said this would eliminate the cost of hand watering 25 percent of the park.
Lacy Park storage yard fencing will also be added.
Wall reported that the city’s sewer and storm drain system is nearing the end of its useful life. The project cost of replacement is $18 million. Next year, $265,000 will be budgeted to fund on-going replacement projects and develop a sewer master plan.
A quarter of a million dollars has been proposed to fund sidewalk replacement. A total of $463,000 will fund renovations of the Lacy Park restrooms, exterior painting of Crowell Library, refurbishment of the fire department restroom and pedestrian lights at the Old Mill.
Park and Public Works
Director Dan Wall also presented the parks and public works department budget.
Expenses are projected to decrease by approximately $60,000 for a total of $3,405,470.
In the 2016-17 fiscal year, the department completed conversion of its streetlights to be more energy and cost efficient, and pavement management plan that will place the city on a cost efficient path to maintain its streets.
“We have started using our own resources whenever possible to reduce overall costs such as in the repair of the outer loop, in advance of the current slurry seal project, and in using our resources in the demolition of the Rose Arbor, “ Wall noted.
He added, that a sewer master plan, improvements at Lacy Park, and implementation of the first year of the pavement management system would be the department’s 2017-18 objectives.
“If I have the concurrence of the city council, I am prepared to begin the implementation of an alternative service delivery model, which would result in a very significant cost savings,” Wall added. “Because of the labor implications, it would probably be better discussed in closed session.”
A line-by-line version of the budget can be found here.
The city manager’s office will include the newly created administrative services department in next year’s budget, said Collins.
Administrative services will centralize the city’s finance, human resources, and information technology functions, and result in additional personnel costs, but a decrease in contract costs.
“If [our workers compensation claims] were managed more aggressively, those costs could come down. And I think you will see a savings just off of that alone with a human resources manager,” Collins shared as an example, explaining one of the potential long-term savings achieved by the new structure.
For the next fiscal year, the department will experience an overall operating cost increase of $240,000, which will result in a total department expenditure of $2.75 million.
During Collins’ presentation of the department’s budget, the council inquired about a variety of issues, including the city’s investments, fee schedule, and banking practices.
Mayor Sun requested the staff inquire about a new bank with which the city could bank, and consider postponing a fee schedule survey for the city’s fees and fines.
Planning and Building
Planning and Building Director Aldo Cervantes introduced his department’s $1,172,786 budget for the 2017-18 fiscal year. The proposed budget noted that 75 percent of the department’s costs are recovered. However, Cervantes stated, the department typically recovers 80 percent of its costs by the end of the fiscal year.
In the current fiscal year, planning and building implemented the 2016 California Building Codes, performed an internal audit of all active business licenses, issued 726 building permits, processed 80 design review applications and 27 planning commission applications, clarified the zoning designations of several properties, adopted several new ordinances, and created a dedicated reception area and customer service line.
In the upcoming year, Cervantes hopes to process a new historic preservation ordinance and wireless telecommunications ordinance, to continue to support planning commissioners and design review committee members, and hire a code compliance coordinator.
Cervantes informed the council that an upgrade to the business license software, known as HDL Prime, will allow businesses to renew licenses and pay online and allow more efficient communication between the city and businesses.
A line-by-line version of the budget can be found here.
SMPD is projected to spend an additional $115,000 compared to the current year for a total budget of $6,857,898.
Police Chief John Incontro attributed the increased expense to an increase in uniform costs, contract services for maintenance of equipment, non-capital equipment purchases and a decrease in reimbursements from the state.
In the current fiscal year, the men and women in blue increase traffic enforcement activities by 34 percent, which, Incontro said, is correlated to a 43 percent reduction in injury traffic collisions.
The department also fully implemented its NIXLE communication program and Coffee With A Cop outreach program.
The department maintained a two-minute and 28 second response time for priority 1 calls, such as burglary, larceny and package theft.
In 2017-18, the police department has set goals of filling the remaining four police officer vacancies, reducing part 1 crimes by five percent, increasing community meetings by 10 percent, and developing and implementing a volunteer program.
Fire/ Emergency Management
Fire Chief Mario Rueda began his presentation of the San Marino Fire Department budget with a reminder that 90 percent of the department’s work is emergency medical services.
The department budget is expected to increase by $96,000 compared to the current year’s budget. The proposed total budget for the department is projected to be $6,222,669.
The new budget includes a $710,000 for a new fire engine, which would take approximately six to nine months to build. “It really does ensure the readiness of our equipment,” said Chief Rueda, noting that the department’s reserve engine is nearing the end of its useful life.
SMFD’s frontline engine was out of service for 150 days in the 2016-17 year, Rueda added. Out of those 150 days, the department was without its frontline or reserve engines for two weeks and relied on South Pasadena Fire Department for coverage.
“Without their equipment, they really are dead in the water,” he said of his crew.
Chief Rueda also expressed concern about the department’s current vendor for truck maintenance.
SMFD also requested a new defibrillator for its frontline engine. The department’s frontline ambulance currently has a new defibrillator.
Rueda said moving forward he would like the cost of equipment worked into the department’s fee schedule to allow to department to save for large capital expenses over time.
SMFD experienced several accomplishments in the 2016-17 fiscal year including certification of engine 91 as a paramedic engine, a formal revenue agreement with LA County for ambulance response, upgrades to the station by fire personnel, training of fire-line paramedics and providing command officer training.
In the new fiscal year, the department will strive to track fire department overtime by account, improve disaster preparedness, complete the transition to a new two-city shared command structure, and conduct CPR training at San Marino public schools.
A line-by-line version of the budget can be found here.
The Recreation Department budget is projected to decrease by $36,000 compared to fiscal year 2016-17 for a total budget of $2,223,898.
Recreation Manager Rose Pinuelas said the department is expected to recover 77 percent of its general fund costs.
To better evaluate the cost recovery and fee structures of specific programs, Pinuelas noted, the department has started to reallocate personnel costs to the program area supported by personnel.
In the current fiscal year, the Recreation Department expanded its private swimming lessons and increased its senior citizen course offerings.
In the 2017-18 fiscal year, the department aims to continue to expand senior citizen programming, increase the number of Recreation Commission meetings, and continue to analyze special events for cost recovery and sponsorship opportunities and age diversification.
The Crowell Public Library budget is projected at $1,583,100—a $65,000 decreased compared to this year’s budget.
The Library was ranked in the top 6.5 percent of libraries in the nation in its class. City Librarian Irene McDermott also noted that the library has grossed over $150,000 in passport acceptance fees—a significant increase from the project amount of $30,000 the year prior.
In the upcoming fiscal year, the department plans to install a radio frequency identification inventory tracking system with funds from the Library Foundation. There are also plans to hold a large celebration on Jan. 26, 2018 in honor of the Library’s 10-year anniversary.