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HomeMy WebLinkAbout2012-06-05; City Council; 20924; Fiscal year 2012-13 Preliminary Operating Budget WorkshopCITY OF CARLSBAD - AGENDA BILL AB# MTG. DEPT. 20,924 06/05/12 Finance Fiscal Year 2012-13 Preliminary Operating Budget Workshop DEPT. DIRECTOR CITY ATTORNEY fj^ CITY MANAGER RECOMMENDED ACTION: Accept report. Set public hearing for June 26, 2012. ITEM EXPLANATION: The Operating Budget work session on June 5, 2012 is an opportunity for the City Council to review the Fiscal Year 2012-13 Preliminary Operating Budget. City staff will be making presentations and will also be available to answer questions. The Preliminary Capital Improvement Program was presented to the City Council at the May 22, 2012 City Council meeting. In addition to these meetings, a Citizens' Budget Workshop will be held on Thursday, June 7, 2012 at 6:00 p.m. at the Faraday Center, 1635 Faraday Avenue, Room 173B, to provide the public with an opportunity to discuss the Operating Budget and Capital Improvement Program with staff. The public hearing and adoption of the FY 2012-13 Operating Budget and Capital Improvement Program is scheduled for the June 26, 2012 City Council meeting. 2012-13 BUDGET OVERVIEW: The theme behind this year's budget development was for the city to continue to provide the very best services to the community while finding operating efficiencies and reducing costs wherever possible. The goal was to achieve a balanced budget for the coming fiscal year while still maintaining the city's long-term financial health, ensuring that future costs can be met without negatively impacting the services provided to the community. Significant ongoing operating expenses were identified and incorporated in the FY 2012-13 budget where necessary, to ensure the budget reflects the ongoing financial obligations of the city. Due to economic conditions experienced over the past few years, the city has taken deliberate measures to continue to allocate resources in a responsible manner, minimizing the impact to users of city services. By planning ahead, the city was able to make adjustments to its budget over the last several years to compensate for large decreases in revenues. As fixed costs like utilities, insurance, and supplies have increased, the city has been able to reduce costs in other areas to maintain a balanced budget without impacting services provided to the community. DEPARTMENT CONTACT: Judi Vincent 760-602-2430 iudi.vincentacarlsbadca.aov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED DENIED CONTINUED WITHDRAWN AMENDED • CONTINUED TO DATE SPECIFIC • CONTINUED TO DATE UNKNOWN • RETURNED TO STAFF • OTHER - SEE MINUTES • Council accepted report and • • • for June 26, 2012. set public hear! Page 2 The Carlsbad economy is starting to improve, including new corporate headquarters and major hotel, retail and commercial projects which will strengthen the local economy. In addition, revenues are improving in the city, with continued gains seen in city sales and hotel tax revenues. However, Carlsbad still faces economic challenges from a fluctuating economy, an unsteady real estate market, continued fixed costs increases, and concerns over the impact that budget decisions at the state and federal levels could have on the city's financial situation. Responsible management of the city's resources includes maintaining a focus on a sustainable future by ensuring the city remains in good financial health, as today's decisions will impact future spending levels. Although the city is entering the new fiscal year in a solid financial position, future economic challenges remain. City staff continues to monitor local, state and federal economic forecasts and routinely updates a ten-year forecast for the General Fund in order to gauge the effects of today's actions on the city's future. The Preliminary Operating Budget assumes that overall General Fund revenue will increase by approximately 1.3 percent in FY 2012-13 compared to the previous year's projected revenue. The Preliminary Operating Budget for FY 2012-13 totals $199.4 million citywide, which represents an increase of $5.6 million, or 2.9 percent, as compared to the FY 2011-12 Adopted Budget. Operating revenues are estimated at $205.8 million, which is about a $5.8 million, or 2.9 percent, increase over the current year's projections. The recommended General Fund Operating Budget is $115.1 million, with estimated revenues of $116.1 million. This is a 1.3 percent increase in the estimated General Fund revenues as compared to the projected FY 2011-12 revenues, and a 3 percent increase in General Fund budgeted expenditures compared to the FY 2011-12 adopted budget. General Fund Estimated Revenues - The majority of the city's General Fund revenues come from taxes. In the upcoming year, it is expected that property tax revenue will be approximately $47.8 million. This is a decrease of 0.6 percent from the revised FY 2011-12 projections. This is based on a 1.2 percent estimated decrease in assessed valuation, as provided by the County Assessor in May 2012, partially offset by new construction that has occurred over the past year. Sales taxes are expected to total $28.8 million for FY 2012-13, an increase of 4.4 percent compared to the FY 2011-12 revised projections. These estimates assume that the improvements we have seen in the city's sales tax revenues in FY 2011-12 will continue over the next year, although at a slightly slower rate. The city's sales tax base is heavily weighted in the transportation and retail sectors. Approximately 25 percent of Carlsbad's sales tax revenue is historically generated from automobile sales, of which Carlsbad recognized substantial growth of around 18 percent in CY 2011. Much of this groyyth was attributed to latent demand, which is unlikely to continue at this rate of growth. General retail sales tax, which comprises approximately 40 percent of annual sales tax revenue, grew by 8.1 percent in CY 2011, outpacing the statewide growth rate of 4.5 percent. Like auto sales, retail sales tax receipts are expected to grow at a slower rate in FY 2012-13. The budget for FY 2012-13 includes additional sales tax revenues generated from new retail activity, such as the opening of the Ponto Hilton. The FY 2012-13 revenues for Transient Occupancy Taxes (TOT) are estimated at $13.5 million for FY 2012-13, an increase of 8 percent compared to FY 2011-12 estimates. Growth in the TOT base (existing hotels) is expected to increase by 3.5 percent in FY 2012-13, driven primarily by forecast increases in the average daily rate paid for rooms. The Ponto Hilton, a Page 3 new hotel, is also expected to open in the summer of 2012 and add additional TOT revenues for FY 2012-13. Franchise taxes are estimated at $4.9 million for FY 2012-13, an increase of 2.1 percent over the FY 2011-12 projections, primarily due to increased receipts from cable and trash services, partially offset by a decrease in gas and electrical services, which are paid by San Diego Gas and Electric (SDG&E). Development Revenues are expected to decrease by 13 percent in FY 2012-13, as a result of subdued residential activity as compared to the strong residential development in FY 2011-12. Development Revenues are estimated to be $2 million in FY 2012-13, as compared to $2.3 million projected for FY 2011-12. General Fund Budgeted Expenditures - The General Fund contains most of the discretionary revenues that fund basic core city services. The recommended General Fund Operating Budget is $115.1 million, which represents a $3.3 million, or 3 percent, increase as compared to the FY 2011-12 Adopted Budget. The overall increase is mainly attributed to an addition of $1.8 million as a transfer to the city's Self-Insured Benefits Fund to address anticipated future pension rate increases and the unfunded pension liability; and to a $1.0 million increase to the Council Contingency budget to provide an allowance for unanticipated emergencies and unforeseen program needs in the coming year. Personnel cost increases, due to anticipated increases in health insurance rates, higher retirement rates as projected by CalPERS, and previously negotiated wage increases, were largely offset by reductions in retirement costs resulting from labor negotiations in prior years, and by reductions in the city's number of full- time and hourly positions. A few expenditures are discussed in more detail below: Proposed Position Changies - A net decrease of 9.75 full-time positions is reflected in the FY 2012-13 Preliminary Operating Budget, as compared to the FY 2011-12 Adopted Budget. The total decrease includes the elimination of 10.75 positions identified through the city's expenditure reduction efforts as well as the addition of 1 full-time limited-term position for management of the new Carlsbad Safety Training Center. These eliminations are in addition to the 33.5 positions eliminated over the past three fiscal years. The FY 2012-13 Operating Budget includes the elimination of the following 10.75 full-time positions: 1.0 Assistant Planner 1.0 Parks Maintenance Worker 11 1.0 Building Inspector II 1.0 Planning Technician 1.0 Code Compliance Specialist II 0.25 Records Manager 1.0 Maintenance Aide 1.0 Senior Building Inspector 1.0 Meter Reader 1.5 Tree Trimmer II 1.0 Office Specialist II The net decrease in hourly full-time equivalent (PTE) staff totaled 7.16 positions. This included the elimination of 7.91 hourly PTE positions citywide, as well as the addition of 0.75 hourly PTE positions for the management of the new Safety Training Center. These changes reduce the city workforce from 684.25 to 674.50 full-time employees. Hourly, full-time equivalent positions decrease from 139.74 to 132.58. 3 Page 4 New Facilities -The city has a number of major capital projects scheduled for construction over the next five years. As the city completes these projects, the costs of maintaining and operating the facilities, including additional personnel if necessary, are added to departmental operating budgets. The Carlsbad Safety Training Center was recently opened and additional funds and staffing for operating and maintaining the facility have been incorporated in the FY 2012-13 Preliminary Operating Budget in the Property and Environmental Management Department. Also, funding has been added to the Parks and Recreation Department budget to fund a full year of landscape maintenance for the Madison Street expansion of Pine Avenue Park, completed in of FY 2011-12, and to the Transportation Department budget for technical support in FY 2012-13 for the completed portions of the city's traffic signal program. Capital Outlay - The one major capital outlay purchase planned in the General Fund for FY 2012-13 is $110,000 for the replacement of three portable EKG monitors for the Fire Department's emergency medical services team. Other Budget Requests - The FY 2012-13 Preliminary Operating Budget also includes the following transfers to other funds; . $7.5 million transfer to the Infrastructure Replacement Fund for major maintenance and replacement of city infrastructure. This represents 6.5 percent of the General Fund Revenues, the same as the percentage transfer for FY 2011-12. . $210,000 transfer to the Storm Water Program for reimbursement for the General Fund portion of Storm Water expenses. • $528,000 transfer to the Median Maintenance and Street Tree Maintenance Special Revenue Funds to cover cash shortfalls, as annual assessments collected from property owners do not cover operating expenditures. • $945,000 to the city's municipal golf course for debt service. The budget for The Crossings Golf Course is adopted on a calendar year basis. In December 2011, the Carlsbad Public Financing Authority approved The Crossings Golf Course Budget for calendar year 2012, including this transfer for debt service funding from the General Fund. At that time, there was no anticipated need for a golf course operations transfer from the General Fund for Calendar Year 2012. • $1.8 million to the City's Self-Insured Benefits Fund as a set aside to assist with addressing anticipated future pension rate increases from CalPERS. Finally, the Contingency is budgeted at 1.3 percent of the General Fund Operating Budget, or $1.5 million, for FY 2012-13, which is a $1 million increase as compared to the FY 2011-12 Adopted Budget. This resource is available to the City Council to address unanticipated emergencies or unforeseen program needs throughout the year. Prior to the economic recession, the Council Contingency budget provided between 2 and 2.5 percent of the General Fund Operating Budget for these unforeseen costs. Other Funds - Enterprise Fund revenues, including Water, Wastewater Services and Solid Waste Management, are projected at $58.6 million, an increase of $4.2 million, or 7.7 percent, over current year projections. The budgeted expenditures are estimated at $57.1 million for FY 2012-13, which is an increase of $3.6 million, or 6.7 percent, over the FY 2011-12 Adopted 4 Page 5 Budget. In December 2011, two-year rate increases for the Water & Sewer Funds were approved by the Board of Directors of the Carlsbad Municipal Water District and the Carlsbad City Council to fund maintenance, operations and replacement, as well as to establish and maintain adequate operating reserves. The maximum rate increase approved for January 1, 2013 for the Water Fund is 10 percent and for the Sewer Fund is 6 percent. The primary driver in the proposed water rate increases is the cost of water purchased from the San Diego County Water Authority, including a projected 11 percent increase to the wholesale purchase cost of water (from $957 to $1,063 per acre foot, effective January 1, 2013) and a projected 8.5 percent increase in their fixed charges for water purchases for FY 2012-13. In addition, the cost of purchasing recycled water is anticipated to increase up to 11.5 percent when compared to the prior year. Carlsbad customers have decreased water consumption for several years; however, in FY 2011-12 the quantities purchased began to level off and even increase slightly. The quantities purchased are expected to stay the same in FY 2012-13 as in FY 2011-12. The Operating Budget also includes additional funding for depreciation replacement transfers related to growth and aging of the water infrastructure system. Revenues from Special Revenue Funds are expected to total $11.3 million, a $700,000 or 5.8 percent, decrease from FY 2011-12 projections. Expenditures are budgeted at $10.9 million. This is $500,000, or 4.4 percent, lower than the FY 2011-12 Adopted Budget. The types of items supported within special revenue funds include grants, donations, special fees, and assessments. Revenues do not always match expenditures in a given year due to timing differences related to the receipt of grant and donation funding. The budgets for the Redevelopment Obligation Retirement Funds (RORF) budgets total $1.4 million, and have decreased by $400,000, or 22.2 percent, from the Redevelopment Agency Fund budgets shown in the previous year. On June 29, 2011, California Governor Jerry Brown signed ABX1 26 to dissolve all redevelopment agencies within the State of California. All agencies were subsequently dissolved as of February 1, 2012, and a Successor Agency was designated to complete the work of the Carlsbad Redevelopment Agency (RDA) and satisfy the financial obligations. The FY 2012-13 Preliminary Operating Budget reflects the initial Recognized Obligation Payment Schedule (ROPS) that was prepared by the Successor Agency in April 2012, but which must ultimately be approved by the Oversight Board, the County of San Diego and the State of California. The initial ROPS identified financial commitments of the former RDA, including $250,000 in administrative costs, which will be paid from semi-annual tax increment revenue received by the Successor Agency. More information regarding all of the city's projected revenues and Operating Budget recommendations can be found in the attached exhibits. FEES AND CHARGES FOR SERVICES One of the City Council's goals is to annually evaluate fees and charges for services. In addition to the proposed utility rate increase mentioned above, staff has reviewed all of the fee schedules and is recommending the changes as shown on Exhibit 6, and further discussed below. GENERAL CITY FEES These are fees charged for the usage of city services and property, such as rentals and classes. In the past, these fees have been increased annually by the increase in the annual < Page 6 West Urban Consumer Price Index (CPI) published by the Bureau of Labor and Statistics, which reflects the cost of inflation. However, City Council chose not to increase fees for the past three fiscal years. For FY 2012-13 it is recommended that fees be indexed by the one year change in CPI, which is 2.8 percent. In addition to the general increase mentioned, the following fees are proposed to change for FY 2012-13: Fees reduced to match the cost of service that was recently updated: Finance - Master List of Active Business Licenses from $51 to $42 Police - Administrative Fee DDI from $20 to $18 Fire - Permit-Motor Vehicle Repair from $176 to $168 Utilities - Water Meter Construction Meter Relocation from $34 to $27 Utilities - Water Service Fee - After Hour Turn On from $185 to $174 Utilities - Water Service Fee - Door Hanger (Paper or Electronic) from $12 to $10 Fees to be increased: • Library Fees - New technology at the library now allows them to check out mobile devices for use in the library. A new fee is proposed for the late return of these devices. This new late fee would be $5 for each hour the device is returned late and would apply after a 20 minute grace period. Fees to be deleted: • Parks and Recreation - Tournament Field Rental Day Use Hourly Rate will be deleted to create more consistency for the applicant. • For consistency purposes, all Parks & Recreation aquatics program and service fees that are currently on the Master Fee Schedule will be removed, as they are already in the Community Services Guide. Title Changes: • Library - Library Borrowing-Audio Visual Insurance Fee-Per Video Game/DVD will be changed to Library Borrowing-Audio Visual Insurance Fee-Per DVD. • Library - Lost Damaged Video Game/DVD will be changed to Lost Damaged DVD • Parks & Recreation - Non Refundable Security Deposit for Leo Carrillo Ranch (Categories B-F) to read Partially Refundable Security Deposit for Leo Carrillo Ranch (Categories B-F) and the terms to read $1,000 or payment in full. If the reservation is cancelled at least 90 days before the rental, then $500 of the deposit is refundable. Otherwise the entire $1,000 deposit is non-refundable. • Parks & Recreation - Senior Center Kitchen Warming - Hourly Rate - Category A-F to read Senior Center Kitchen Warming & Small Lunch Room - Hourly Rate - Category A-F. • Parks & Recreation - Senior Center Art Room - Hourly Rate - Category A-F to read Senior Center Art Studio, Multipurpose Room & Game Room - Hourly Rate - Category A-F. Page 7 • Utilities - Trash Collection - Residential- Per Month to read Trash Collection - Residential - Per Month - 96 or 64 Gallon Cart. DEVELOPMENT RELATED SERVICE FEES These are fees charged to recover the cost of staff time and materials spent on development related activities. A Cost of Service Study is prepared every two to three years to establish the actual cost of providing the service. Then, annually. Development Related Service Fees are increased by an index stated in the respective resolution or ordinance establishing the fee. An annual review is conducted to ensure that the fees being charged do not exceed direct and indirect costs of providing the service. The Cost of Service Study is available from the Finance Department upon request. For FY 2012-13 it is recommended that fees be increased by the one year change in the associated index. Other fee changes not being changed by the index include: • Community & Economic Development - Fish & Game Fee, which is set by state statute • Community & Economic Development - Building Permit Fees, which are based on a percentage of the Uniform Building Code. • Community & Economic Development - Plumbing, Electrical and Mechanical Permit (not combined with Building Permits) Development Related Service Fees to be deleted because they are no longer eligible for cost recovery: • Information Technology - GIS 2005 Topographic Contour Lines • Information Technology - GIS 2005 Natural Color Aerial Photography *.tif Format Development Related Service Fees that are decreasing: • Community & Economic Development - Street Light Energizing Fee will be decreasing due to a reduction in the induction rate charged by San Diego Gas & Electric • Housing & Neighborhood Services - Affordable Housing Credit Per Unit - Villa Loma (Southeast and Southwest Quadrants) will be reduced from $49,000 to $48,000, which is based on an annual calculation. Development Related Service Fees that are increasing: • Housing and Neighborhood Services Fees - A new fee has been added to the Master Fee Schedule for Affordable Housing Credit Per Unit - Cassia Heights (Southeast and Southwest Quadrants). This fee is $57,465 per unit. Development Related Service Fees reduced to match the cost of service that was recently updated: • Parks and Recreation -Trails Inspection fee is proposed to be reduced from $667 to $298. • Community & Economic Development - Environmental Monitoring Fee from $218 to $206 Page 8 • Community & Economic Development - Village Area Noticing Fee (Minor) will not be fully indexed. It will be indexed up to the cost of providing the service which is $223. • Community & Economic Development - Village Area Permit Noticing Fee (Major) will not be fully indexed. It will be indexed up to the cost of providing the service which is $413. DEVELOPMENT IMPACT FEES These fees are used to recover the cost that growth will have on city infrastructure. These fees are increased annually by an index stated in the respective resolution or ordinance establishing the fee, typically the Engineering News Record (ENR) construction cost index. Council has chosen not to increase these fees in the past three fiscal years and amended the ordinances in those years holding fees in abeyance. Prior to the fees being held in abeyance, developers were paying the indexed fees. New developers are currently paying a lower fee and it is estimated that development projects will not have enough funds for development in those areas to be completed. Due to the inequity issue this creates, for FY 2012-13 these fees are recommended to be increased by the four year cumulative increase of the respective index since the last time fees were increased. EXHIBITS: 1. Fiscal Year 2012-13 Preliminary Operating Budget (Overview) 2. Operating Funds, Projected Fund Balances for FY 2011-12 and FY 2012-13 3. Operating Funds, Revenue Estimates for FY 2011-12 and FY 2012-13 4. Operating Funds, Budget Expenditure Schedule FY 2009-10 through FY 2012-13 5. Personnel Allocation Schedule FY 2010-11 through FY 2012-13 6. Proposed Fee Changes - June 2012 The Preliminary Operating Budget and Capital Improvement Program for Fiscal Year 2012-13 are on file with the City Clerk. Exhibit 1 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW The Preliminary Operating Budget for Fiscal Year 2012-13 totals $199.4 million, with revenues for the year estimated at $205.8 million. General Fund revenues are estimated at $116.1 million and General Fund budgeted operating expenditures are $115.1 million. REVENUE The following table shows the total operating revenues anticipated to be received by the city for Y 2011-12, as well as those estimated for FY 2012-13. REVENUE SUMMARY BY FUND TYPE (in Millions) FUND PROJECTED 2011-12 ESTIMATED 2012-13 $ CHANGE % CHANGE GENERAL FUND SPECIAL REVENUE ENTERPRISE INTERNAL SERVICE REDEV. OBLIG. RETIREMENT $ 114.6 12.0 54.4 15.9 3.1 $ 116.1 11.3 58.6 17.7 2.1 $ 1.5 (0.7) 4.2 1.8 (1.0) 1.3% -5.8% 7.7% 11.3% -32.3% TOTAL $ 200.0 $ 205.8 $ 5.8 2.9% Revenue estimates for the Operating Budget indicate that the city will receive a total of $205.8 million in FY 2012-13, a $5.8 million, or 2.9 percent, increase over the prior year's projections. The significant changes from the prior year include a $4.2 million, or 7.7 percent, increase in the Enterprise Funds due to proposed water and wastewater rate increases. The General Fund shows an increase of $1.5 million, or 1.3 percent, and Special Revenue Funds show a decrease of $700,000, or 5.8 percent, from the prior year. More information on the city's revenue sources can be found in the discussion that follows. General Fund General Fund revenues provide a representative picture of the local economy. These revenues are of particular interest as they fund basic city services, such as Police, Fire, Library, Street and Park Maintenance, and Recreation programs. The table below provides a summarized SIGNIFICANT GENERAL FUND REVENUES (In Millions) PROJECTED ESTIMATED $ % FUND 2011-12 2012-13 CHANGE CHANGE PROPERTY TAX $ 48.1 $ 47.8 $ (0.3) -0.6% SALES TAX 27.6 28.8 1.2 4.4% TRANSIENT OCCUPANCY TAX 12.5 13.5 1.0 8.0% FRANCHISE TAXES 4.8 4.9 0.1 2.1% BUSINESS LICENSE TAX 3.7 3.6 (0.1) -2.7% DEVELOPMENT REVENUES 2.3 2.0 (0.3) -13.0% ALL OTHER REVENUE 15.6 15.5 (0.1) -0.6% TOTAL $ 114.6 $ 116.1 $ 1.5 1.2% 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW General Fund revenue sources indicate that Carlsbad is benefitting from an improving state and local economic climate. Two of our largest revenue sources, sales tax and transient occupancy tax (TOT) have exhibited healthy growth in FY 2011-12 and are expected to continue that trend in the coming fiscal year. Revenues from sales tax and TOT increase are highly sensitive to changes in the economic activity, unlike property tax revenues, which tend to lag behind economic growth and remain relatively stable over time. Home prices in Carlsbad have continued to fall over the past year and, in FY 2012-13, property taxes are expected to decrease slightly, providing approximately $47.8 million to the General Fund, compared to $48.1 million in FY 2011-12. This is based on a 1.2 percent estimated decrease in assessed valuation, as provided by the County Assessor in May 2012, partially offset by new construction that has occurred over the past year. The median single family home sales price in Carlsbad is fell to $580,000 in March 2012, down over 7 percent from last year. Property taxes tend to lag behind the rest of the economy, as the tax revenue for the upcoming fiscal year is based on assessed values from January. Thus, the taxes to be received for Fiscal Year 2012-13 are based on assessed values as of January 1, 2012. Property and Sales Tax Revenues 60.00 50.00 -Sales Tax -Property Tax Proposition 13, adopted in 1978, limits the annual increase in assessed values for property. Under this proposition, assessed values (and the related property tax) can grow by no more than two percent per year. The value upon which the tax is based is only increased to the full market value upon the sale of the property. Thus, property taxes tend to grow slowly unless there is a significant amount of housing activity. In past decade, we have seen robust growth in property taxes due to new development, high turnover of existing homes, and double-digit growth in housing prices. Fiscal Year Business to Business 13% Sales Tax by Category Fourth Quarter 2011 Miscellaneous 1% Changes in sales tax revenue align more closely with changes in the overall condition of the economy, and are expected to increase as the current economic recovery gains steam. Sales taxes are expected to total $28.8 million for FY 2012-13, an increase of 4.4 percent compared to the FY 2011-12 projections. Approximately 25 percent of Carlsbad's sales tax revenue is histohcally generated from automobile sales, which slumped significantly during the recent economic downturn. New auto sales are expected to stabilize at around $5.7 million in FY 2012-13, as Carlsbad recognized substantial growth in auto sales of around 18 percent in CY 2011. Califomia auto dealers in general, sold 1.3 million cars, an annual improvement of almost 10 percent and trucks in 2011, with the Honda Civic being the top seller. Much of this growth was attnbuted to latent demand', which is unlikely to continue this rate of growth. General retail sales tax, which comprises approximately 40 percent of annual sales tax revenue, grew by 8.1 percent in CY 0 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW 2011 outpacing the statewide growth rate of 4.5 percent. Like auto sales, retail sales tax receipts are expected to grow at a slower rate in FY 2012-13. The budget for FY 2012-13 includes additional sales tax revenues generated from new retail activity, such as the opening of the Ponto Hilton. Several years ago, the State of California implemented the "Triple Flip." The "Triple Flip" is essentially a temporary swap of a VA cent of the cities' sales taxes in return for property tax. It was done in order to give the state a revenue source against which they could issue deficit reduction bonds. The city's sales tax estimates continue to show this amount as sales tax since the amount is reflective of what the city would receive. As can be seen in the chart on the previous page, the city's sales tax base is heavily weighted in the transportation (predominantly new car sales) and retail sectors. These two sectors make up approximately 70 percent of the city's sales tax base and were negatively impacted by the recent economic recession. During FY 2011-12, sales tax revenues, especially in the auto and retail sectors, increased as a slow economic recovery took root in San Diego. Sales tax estimates also include approximately $800,000 in Proposition 172 funds, which are earmarked for public safety service expenditures. Proposition 172 requires that the 'A cent increase in Califomia sales taxes be allocated to local agencies to fund public safety services. Transient Occupancy Taxes $ Millions The third highest General Fund revenue source is Transient Occupancy Taxes (TOT, or hotel taxes), estimated at $13.5 million for FY 2012-13, an increase of 8 percent compared to FY 2011-12 estimates. Growth in the TOT base (existing hotels) is expected to increase by 3.5 percent in FY 2012-13, driven primarily by forecast increases in the average daily rate paid for rooms. The Ponto Hilton, a new hotel, is also expected to open in the summer of 2012 and add additional TOT revenues. TOT revenues peaked in FY 2007-08 at $14.3 million and, during the economic downturn, fell to a low of $11.5 million in FY 2009-10. As the graph indicates, this sector appears to be on the mend. 2005 2007 2009 2011 Fiscal Year 2013e $ Millions Franchise Taxes I Other Franchise I SDG&E Franchise 2005 2007 2009 2011 2013e Fiscal Year One of the more volatile General Fund revenues is the Franchise Tax. Franchise taxes are paid by certain industries that use the city right-of-way to conduct their business. The city currently has franchise agreements for cable TV service, solid waste services, cell sites, fiber 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW optic antenna systems and gas and electric services. The cable and solid waste franchises have been growing along with the growth in population, changes in their rate structures, and the continued growth of the city's newest cable franchises, AT&T and Time Warner. Overall, franchise tax revenues are projected to increase by approximately 2.1 percent, primarily due to increased receipts from cable and trash services, partially offset by a decrease in gas and electrical services, which are paid by San Diego Gas and Electric (SDG&E). SDG&E pays franchise taxes for the use of the public land over which they transport gas and electricity. The city also receives an "in-lieu" franchise tax based on the value of gas and electricity transported on SDG&E lines, but purchased from another source. The "in-lieu" tax captures the franchise taxes on gas and electricity that is transported using public lands but which would not othen^^ise be included in the calculations for franchise taxes, due to deregulation of the power industry. The majority of the "in-lieu" taxes received is attributable to Cabrillo Power, the operator of the Encina power plant, and is based on the gas used in the generation of electricity. The continued reduction in operations at the Encina power plant is projected to negatively impact the "in-lieu" franchise tax paid by SDG&E, leading to the projected decrease in franchise taxes paid by SDG&E. Development-related revenues include planning, engineering and building permits, and fees paid by developers to cover the cost of reviewing and monitoring development activities such as plan checks and inspections. These revenues are difficult to predict, as many of the planning and engineering activities occur months or years before any actual development. During FY 2009-10, development related revenues began to turn around from historic lows experienced in FY 2008-09. During FY 2010-11, development related revenues continued to strengthen, especially on the non-residential side with the permitting of the new Isis Pharmaceuticals headquarters and the Hilton Beachfront Hotel. Although not as high as FY 2010-11, development related revenues are projected to end the year very strong in FY 2011- 12, with the development of several master planned residential communities and the development of the new Legoland Hotel. In FY 2010-11, there were 260 units permitted for residential housing. For FY 2011-12, 336 residential units have been permitted through April 2012. For FY 2012-13,183 permits are projected to be issued for residential housing. Although commercial and industrial building activity weakened in FY 2011-12 as compared to FY 2010- 11, it is expected that activity will pick up again in FY 2012-13 with the projected development of the new Lowes and La Costa Town Square shopping centers. Due to projected subdued residential activity as compared to the strong residential development in FY 2011-12, building- related revenues are expected to drop by 13 percent in FY 2012-13. Although Business license taxes are closely tied to the health of the local economy, due to some one-time revenues received during FY 2011-12, they are projected to decrease by 2.7 percent to an estimated $3.6 million. There are currently about 8,900 licensed businesses in Carlsbad, with just over 2,500 of them home-based. All other revenues include transfer taxes, interest earnings, ambulance fees, recreation fees, and other charges and fees. The estimate for Fiscal Year 2012-13 totals $15.5 million, a $100,000, or 0.6 percent, decrease from the previous year. Interdepartmental charges are generated through engineering services charged to capital projects, reimbursed work from other funds and miscellaneous interdepartmental expenses charged to funds outside the General Fund for services performed by departments within the General Fund. Transfer taxes are those taxes paid to the county upon the transfer of interests in real estate. The tax is 55 cents per $500 of property value, and is split equally between the county and the 1^ 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW city. Carlsbad expects to receive approximately $1.1 million in transfer taxes for FY 2012-13, which is a $136,000 increase over FY 2011-12. This is mainly due to the increase in the sale of new homes as well as an increase in distressed home sales. Income from investments and property includes interest earnings, as well as rental income from city-owned land and facilities. The city is expected to earn about $1.4 million in interest on its General Fund investments for Fiscal Year 2012-13 (a projected 1.7 percent yield on the city's investment portfolio) as well an additional $200,000 in interest earnings from a loan repayment from the former Redevelopment Agency. General Fund Revenues $ Millions 140 + 1.2% FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012e FY 20138 Overall, as reflected in the bar chart, General Fund revenues are expected to be up 1.2 percent from FY 2011-12 estimates due to the increase in sales and transient occupancy taxes. Although the city experienced revenue growth between 9 and 17 percent in the late 1990's, it was not sustainable growth. Much of those increases were due to the opening of new hotels, restaurants, retail centers, and new home development. As new development slows, it will be increasingly more difficult to produce double-digit growth in revenues. Due to the slow pace of the current economic recovery, limited growth of is anticipated in the next fiscal year and beyond. The City has a General Fund reserve policy that sets a minimum reserve of 30 percent of the General Fund Operating Expenditures. In addition, the policy sets a target reserve of 40 percent to 50 percent of General Fund Operating Expenditures. The minimum reserve would provide approximately three to four months of operating expenditures for unforeseen emergencies. At the end of FY 2010-11, the unassigned General Fund balance was approximately $57.5 million. At the end of FY 2011-12 the reserve is projected to be approximately $59.1 million, or 51 percent, of the FY 2012-13 Budget. The reserve amount is consistent with Council Policy 74: General Fund Reserve Guidelines. Other Funds Revenues from Special Revenue funds are expected to total $11.3 million in FY 2012-13, a $700,000, or 5.8 percent, decrease from FY 2011-12. The types of programs supported within Special Revenue funds are those funded by specific revenue streams such as: • Grants (Rental Assistance-Section 8 and Community Development Block Grants) • Special fees and assessments (Affordable Housing and Maintenance Assessment Districts) • Donations (Library, Cultural Arts, Recreation and Senior Donations) 13 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW SPECIAL REVENUE FUNDS 2012-13 PROJECTED REVENUES Donations and Grants 9% All Others 4% Maintenance Districts 25% Rental Assistance 51% Affordable Housing 11% The most noteworthy changes in the Special Revenue funds occurred in the Affordable Housing Trust Fund, the Street Lighting Fund and the Rental Assistance Fund. Estimated revenues decreased approximately $1 million, $241,000 and $130,000, respectively, from FY 2011- 12. During FY 2011-12, the city received approximately $1.4 million in one-time affordable housing credits. In order to meet the inclusionary housing obligations for certain areas of the city (e.g., the southeast and southwest quadrants), units related to developments such as Villa Loma and Cassia Heights were made available as affordable housing credits for housing developers to purchase. Due to the small size of certain projects and the difficulty in obtaining financing, some developers/applicants have opted to purchase affordable housing credits instead of constructing units. During FY 2011-12, the city received approximately $205,000 in American Recovery and Reinvestment Act (ARRA) funds from the California Energy Commission (low interest loan). The city does not anticipate drawing down any additional loan funds in FY 2012-13. These revenues are one-time monies which are being used towards the City's street light retrofit project. The street light retrofit project will replace the city's high-pressure sodium vapor lights with induction lights. The Federal government is reducing the amount of reimbursements for administrative expenses for their Section 8 Rental Assistance Program, which is reflected in the reduced estimated revenues for the Rental Assistance Program in FY 2012-13. Enterprise fund revenues for FY 2012-13 are projected at $58.6 million, an increase of $4.2 million, or 7.7 percent, over current year projections. The increase in revenues is primarily due to the planned rate increases for Water and Wastewater funds. Enterprise funds are similar to a business, in that rates are charged to support the operations that supply the service. Carlsbad Enterprise funds include water and recycled water delivery, wastewater services, and solid waste management. The Water Enterprise Fund revenue is estimated at $43.2 million, an increase of $3.4 million, or 8.5 percent over the current year estimate. These revenues reflect $3.4 million in increased sales revenue due to proposed rate increases. In December 2011, two year rate increases 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW were approved by the Board of Directors of the Carlsbad Municipal Water District. The maximum rate increase approved for January 1, 2013 is 10 percent. Anticipated increases paid to the San Diego County Water Authority include an 11 percent increase to the wholesale purchase cost of water (from $957 to $1,063 per acre foot, effective January 1, 2013), and an 8.5 percent increase in the fixed charges for water purchases (from $5.1 million to $5.6 million) for FY 2012-13. In addition to paying for the wholesale and fixed water costs, the FY 2012-13 Operating Budget includes funding for replacement of Carlsbad's water infrastructure, ongoing meter replacements, and building a sufficient operating reserve. Estimated revenues for Wastewater are $11.9 million, $610,000 over the current year estimate. The revenue increase reflects proposed rate increases to fund the ongoing cost of operations, maintenance, and funding for replacement of infrastructure, as well as providing a sufficient operating reserve. In December 2011, two year rate increases were approved by the Carlsbad City Council. The maximum rate increase approved for January 1, 2013 is 6 percent. Internal Service funds show estimated revenues of $17.7 million for FY 2012-13, an increase of about $1.8 million, or 11.3 percent, from FY 2011-12 projections. Internal Service funds provide services within the City itself, and include programs such as the self-insurance funds for Workers' Compensation and General Liability (Risk Management), as well as Vehicle Maintenance and Replacement, and Information Technology. Departments pay for services provided by these funds; therefore, the rates charged for the services are based on the cost to provide the service. The goal of the Internal Service funds is to match their budgeted expenses with charges to the departments, after allowing for a certain level of reserves within the fund. The most significant change occurred in the Self-Insured Benefits Fund. Included in the FY 2012-13 revenues is a $1.8 million transfer from the General Fund to be set aside to assist in the stabilization of future CalPERS retirement costs. The Redevelopment Obligation Retirement Fund (RORF) revenues are expected to total $2.1 million in the upcoming year, a decrease of 32.3 percent, or $1 million, from the projections from the previous year. On June 29, 2011, California Governor Jerry Brown signed ABX1 26 to dissolve all redevelopment agencies within the State of California. All agencies were subsequently dissolved as of February 1, 2012, and a Successor Agency was designated to complete the work of the Carlsbad Redevelopment Agency (RDA) and satisfy the financial obligations. A Recognized Obligation Payment Schedule (ROPS) was prepared by the Successor Agency in April 2012 which must ultimately be approved by the Oversight Board, the County of San Diego and the State of California. The initial ROPS identified financial commitments of the former RDA which will be paid from semi-annual tax increment revenue received by the Successor Agency. Every six months a new ROPS must be prepared and approved by the Oversight Board, the County of San Diego and the State of California in order to receive additional tax increment. Due to the dissolving of the RDA, the RORF will only receive tax increment revenues and interest earnings on any cash balances. Tax increment revenues are projected to decrease due to the increase in County of San Diego administrative costs which are netted against the tax increment revenues received by the Successor Agency. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW EXPENDITURES The city's Preliminary Operating Budget for FY 2012-13 totals $199.4 million, which represents an increase of about $5.6 million, or 2.9 percent, as compared to the adopted FY 2011-12 Budget. The changes in each of the city's programs will be discussed below. Budgetary Policies The theme behind this year's budget development was for the city to continue to provide the very best services to the community while finding operating efficiencies and reducing costs wherever possible. The goal was to achieve a balanced budget for the coming fiscal year while still maintaining the city's long-term financial health, ensuring that future costs can be met without negatively impacting the services provided to the community. All known and ongoing operating expenses were incorporated in the FY 2012-13 Preliminary Operating Budget, as well as in the long-term financial forecast. The FY 2012-13 Preliminary Operating Budget also sets aside $1.8 million in order to address the current unfunded pension liability as well as to help stabilize future pension costs. Responsible management of the city's resources includes maintaining a focus on a sustainable future by ensuring the city remains in good financial health, as today's decisions will impact future spending levels. Although the city is entering the new fiscal year in a solid financial position, future economic challenges remain. The following policies for FY 2012-13 were established in line with conservative estimates for future revenue growth: • Continue to minimize service level impacts to our residents. • No increase in the number of positions and no growth in maintenance and operations, unless required for new facilities. • No new programs unless required under a legal mandate. • Significant known personnel increases should be included in departmental budget projections. • Personnel and operating reductions should be identified in order to offset known budget increases. • Exercise prudence in budgeting. Consider cost containment measures and budget discretionary items at minimum levels. The city uses an "Expenditure Control Budget" (ECB) process in budgeting, where each department is given a block appropriation containing sufficient funds to provide the current level of services for the upcoming year. As a result of the economic recession, in both FY 2008-09 and FY 2009-10 block budgets were decreased in response to decreasing revenues. The city realigned its organizational structure in FY 2010-11, allowing for increased efficiencies with fewer resources, with overall operations costs remaining at FY 2009-10 levels. For both FY 2011-12 and FY 2012-13, in order to meet rising General Fund expenses, some positions were eliminated, related service delivery was restructured, and departments were asked to identify operational reductions to absorb necessary increases in their block budgets. No additional appropriations are expected during the fiscal year, except in the case of a significant unanticipated event. As in past years, amounts that are unspent at the end of the fiscal year will be carried fonA/ard to the next year, or will increase the city's reserves. At the end of FY 2011- 12, the amounts carried fon^/ard by each department will be capped at no more than 10 percent of the previous year's Adopted Budget. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW Budgeted Expenditures Through the application of these guidelines and policies, the FY 2012-13 Preliminary Operating Budget of $199.4 million was developed. Position Changes A net decrease of 9.75 full-time positions is reflected in the FY 2012-13 Preliminary Operating Budget, as compared to the FY 2011-12 Adopted Budget. Total position decreases include the elimination of 5.75 positions identified through expenditure reduction efforts, the elimination of two positions as a result of losing redevelopment funding from the State of California, and the elimination of three positions that had previously been unfunded, for a total of 10.75 position eliminations, resulting in approximately $600,000 in total personnel savings citywide for the coming year. These eliminations are partially offset by the addition of one full-time, limited term position for facility management at the new Carlsbad Safety Training Center. The FY 2012-13 Preliminary Operating Budget includes the elimination of the following 10.75 full-time positions: 1.0 Assistant Planner 1.0 Parks Maintenance Worker II 1.0 Building Inspector II 1.0 Planning Technician 1.0 Code Compliance Specialist II 0.25 Records Manager 1.0 Maintenance Aide 1.0 Senior Building Inspector 1.0 Meter Reader 1.5 Tree Trimmer II 1.0 Office Specialist II The FY 2012-13 Preliminary Operating Budget includes the addition of the following full-time, limited term position: 1.0 Safety Training Center Facility Manager The net decrease in hourly staff totals 7.16 PTE. This includes decreases of 5.16 hourly PTE in Parks and Recreation, 1.0 hourly PTE in Community and Economic Development, 1.0 hourly PTE in Library and Arts, and 0.75 hourly PTE in Human Resources. These decreases are offset by an increase of 0.75 hourly PTE in Property and Environmental Management for new facility building maintenance and custodial services for the City of Carlsbad's Safety Training Center. These changes result in a city workforce of 674.50 full and three-quarter time employees, and 132.58 hourly, full-time equivalent positions. New Facilities The city has a number of major capital projects scheduled to be built over the next five years. As the city completes these projects, the costs of maintaining and operating the facilities, including additional personnel if necessary, are added to departmental operating budgets. The grand opening of the City of Carlsbad's Safety Training Center occurred in May 2012. Additional funds for operating the facility have been incorporated in the FY 2012-13 Preliminary Operating Budget in the Property and Environmental Management Department. Additional staffing has also been added to operate and maintain the facility, as mentioned in the position changes noted above. Also, about $5,000 has been added to the Parks and Recreation Department budget to fund a full year of landscape maintenance of the Madison Street expansion of Pine Avenue Park, completed mid-year of FY 2011-12, and about $6,000 has been added to the Transportation Department budget for technical support in FY 2012-13 for the completed portions of the city's traffic signal program. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW Budget bv Fund Type The table below shows the changes in the Preliminary Operating Budget for FY 2012-13, as compared to the Adopted Budget for FY 2011-12. BUDGET EXPENDITURE SUMMARY BY FUND TYPE (In Millions) FUND BUDGET 2011-12 BUDGET 2012-13 $ CHANGE % CHANGE GENERAL FUND SPECIAL REVENUE ENTERPRISE INTERNAL SERVICE REDEV. OBLIG. RETIREMENT $ 111.8 11.4 53.5 15.3 1.8 $ 115.1 10.9 57.1 14.9 1.4 $ 3.3 (0.5) 3.6 (0.4) (0.4) 3.0% -4.4% 6.7% -2.6% -22.2% TOTAL $ 193.8 $ 199.4 $ 5.6 2.9% The General Fund contains most of the discretionary revenues that support basic core city services. However, this should not diminish the importance of the other operating funds, as they also contribute to the array of services available within Carlsbad. The remainder of this section will provide more information about the budgeted expenditures by fund and program. GENERAL FUND SUMMARY BY EXPENDITURE TYPE (In Millions) BUDGET 2011-12 BUDGET 2012-13 $ CHANGE % CHANGE PERSONNEL MAINTENANCE & OPERATIONS CAPITAL OUTLAY TRANSFERS $ 72.8 29.4 0.1 9.5 $ 73.3 30.7 0.1 11.0 $ 0.5 1.3 1.5 0.7% 4.4% 0.0% 15.8% TOTAL $ 111.8 $ 115.1 $ 3.3 3.0% General Fund The total Preliminary Operating Budget for the General Fund for FY 2012-13 is $115.1 million, which is three percent greater than the previous year's Adopted Budget of $111.8 million. The total increase is mainly attributable to a $1.3 million, or 4.4 percent, net increase in Maintenance and Operations costs and a $1.5 million, or 15.8 percent, overall increase in transfers out of the General Fund to other city funds, as can be seen in the table above. These changes are discussed in more detail below. Personnel costs make up approximately 64 percent of the General Fund budget so any changes in these costs can have a significant effect on the total budget. The total personnel budget for FY 2012-13 is $73.3 million, which is $500,000, or 0.7 percent, more than the previous year's total personnel budget of $72.8 million. The overall increase was due to several factors, as discussed on the following page. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW GENERAL FUND PERSONNEL COSTS (In Millions) BUDGET 2011-12 BUDGET 2012-13 $ CHANGE % CHANGE SALARIES RETIREMENT HEALTH INSURANCE WORKERS COMP OTHER PERSONNEL $ 50.3 13.6 6.5 1.3 1.1 $ 51.0 13.1 6.7 1.4 1.1 $ 0.7 (0.5) 0.2 0.1 0.0 1.4% -3.7% 3.1% 7.7% 0.0% TOTAL $ 72.8 $ 73.3 $ 0.5 0.7% The table above shows the breakdown of personnel costs for the General Fund. Overall, total personnel costs are projected at $73.3 million, an increase of about $500,000, or 0.7 percent, for FY 2012-13 as compared to FY 2011 -12. Salaries include full and part-time staff costs and are expected to increase in FY 2012-13 by $700,000, or 1.4 percent. The increase is mainly due to previously negotiated wage increases scheduled to occur in FY 2012-13, as well as the addition of staff to operate and maintain the new Carlsbad Safety Training Center. Total wage and staffing increases were somewhat offset by the elimination of 10.75 full-time positions citywide as part of the city's efforts to reduce costs in FY 2012-13. Retirement rates, as projected by CalPERS, will increase in FY 2012-13 by about 0.73 percent of salary for General and Management employees, representing a 3.25 percent increase, and by about 1.13 percent of salary for Safety employees, representing a 3.5 percent increase. These rate increases for the city were offset by retirement cost decreases due to prior year General, Management and Safety employee labor negotiations, and due to decreases from position eliminations, resulting in an overall decrease of $500,000, or 3.7 percent, in total retirement costs. In addition to the retirement costs noted here, an additional $1.8 million has been budgeted as a transfer to the City's Self-Insured Benefits Fund as a set aside to help address anticipated future pension rate increases from CalPERS. Health insurance rates are projected to increase by about 5 percent in January 2013, while Worker's Compensation rates are projected to increase by about 3 percent for the fiscal year. These increased costs are partially offset by decreases due to a reduction in the overall number of city personnel, resulting in only slight increases in both areas for the coming year. Miscellaneous other personnel costs are projected to remain flat for FY 2012-13, with small increases offset by the overall personnel decreases previously mentioned. Maintenance & Operations costs (or M&O) represent about 27 percent of the total General Fund budget, and include the budgets for all program expenses other than personnel, capital outlay and transfers. Overall, total M&O costs are projected at $30.7 million, an increase of about $1.3 million, or 4.4 percent, for FY 2012-13 as compared to FY 2011-12. Maintenance and Operations costs are discussed more fully by program later in the report. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW Capital Outlay includes budgeted equipment purchases over $1,000. One major capital outlay purchase is planned in the General Fund for FY 2012-13, namely $110,000 for the replacement of three portable EKG monitors for the Fire Department's emergency medical services team. This is in addition to the three EKG monitors that were budgeted in the FY 2011-12 Operating Budget. Transfers are amounts anticipated to be transferred from the General Fund to another city fund. The transfers included in this year's proposed budget are to the following funds: • $7.5 million to the Infrastructure Replacement Fund for major maintenance and replacement of city infrastructure. This represents 6.5 percent of the General Fund Revenues, the same as the percentage transfer for FY 2011-12. • $210,000 to the Storm Water Program for reimbursement for the General Fund portion of Storm Water expenses. • $527,746 to the Median Maintenance and Street Tree Maintenance Special Revenue Funds to cover cash shortfalls, as annual assessments collected from property owners do not cover annual operating expenditures. • $945,000 to the city's municipal golf course for debt service. The budget and financial reports for The Crossings Golf Course are on a calendar year basis. In December 2011, the Carlsbad Public Financing Authority approved The Crossings Golf Course Budget for calendar year 2012, including this transfer for debt service funding from the General Fund. At that time, there was no anticipated need for a golf course operations transfer from the General Fund for Calendar Year 2012. • $1.8 million to the City's Self-Insured Benefits Fund as a set aside to address anticipated future pension rate increases from CalPERS. Advances are amounts anticipated to be transferred from the General Fund to another city funds and are expected to be repaid to the General Fund in future years. No General Fund advances are included in this year's Preliminary Operating Budget. Another way of looking at the General Fund budget is by program. The chart on the following page compares the total FY 2012-13 Budget to the amounts adopted in the previous year. A brief description of each department and its services and a summary of significant department budget changes in the FY 2012-13 Preliminary Operating Budget, are noted below the chart. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW GENERAL FUND EXPENDITURES BY DEPARTMENT (In Millions) FUND BUDGET 2011-12 BUDGET 2012-13 $ CHANGE % CHANGE POLICY/LEADERSHIP $ 4.9 $ 5.0 $ 0.1 2.0% COMMUNITY & ECONOMIC DEV 7.2 7.1 (0.1) -1.4% FINANCE 3.4 3.5 0.1 2.9% FIRE 16.9 17.5 0.6 3.6% HOUSING & NGHBRHD SRVCS 0.6 0.6 0.0 0.0% HUMAN RESOURCES 2.3 2.3 0.0 0.0% LIBRARY & ARTS 10.4 10.3 (0.1) -1.0% PARKS & RECREATION 13.1 12.7 (0.4) -3.1% POLICE 28.1 27.9 (0.2) -0.7% PROPERTY & ENVIRO MOT 4.7 5.1 0.4 8.5% STORM DRAIN ENGINEERING 0.3 0.3 0.0 0.0% TRANSPORTATION 8.9 8.9 0.0 0.0% NON-DEPARTMENTAL 11.0 13.9 2.9 26.4% TOTAL $ 111.8 $ 115.1 $ 3.3 3.0% The Policy & Leadership Group consists of all elected officials, the City Manager's Office, the City Attorney's Office, and communications and records management functions. The $100,000, or 2 percent, net increase for FY 2012-13 is primarily due to an increase in the City Clerk's Office for increased election expenses anticipated in the coming year. The Community and Economic Development Department includes economic development, planning, development services, building inspection, and land use engineering. The decrease of about $100,000, or 1.4 percent, is mainly due to personnel changes. The department eliminated one vacant full-time Building Inspector II position and a net total of one hourly PTE position. Some of these savings were used to absorb costs previously charged to the South Coastal Carlsbad Redevelopment Area, as well as to fund increases in economic development activity. The department also eliminated two additional positions that had been unfunded in a prior year. The Finance Department provides the services of accounting, financial reporting, capital and operating budgeting, payroll, billing and collections, citywide mail processing, purchasing and receiving, fiscal oversight, and long-term financial planning for the city. The increase of about $100,000, or 2.9 percent, is mainly due to personnel cost increases, as well as an increase in ambulance billings. The Carlsbad Fire Department provides emergency operations, emergency preparedness, and fire prevention services to safeguard lives, property and the environment in the City of Carlsbad. The FY 2012-13 increase of $600,000, or 3.6 percent, is primarily due to contractual wage increases approved in FY 2011-12, as well as increases in public safety pension rates and health insurance rates. Increases were slightly offset by $50,000 of budget reductions in overtime, training, travel and vehicle costs for the department due to the opening of Carlsbad's Safety Training Center. 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW . The Housing and Neighborhood Services Department includes the city's neighborhood services, code enforcement, hiring center and volunteer programs. Budgeted expenditures for the department are expected to remain flat from FY 2011-12 to FY 2012-13. In the General Fund, the department is eliminating one vacant, full-time Code Compliance Specialist that had been unfunded in the prior year. • The Human Resources Department supports the city with staffing and recruitment, employee development, performance management, and compensation and labor relations services. An increase in contractual services for staff training and development is offset by a decrease of a 0.75 hourly FTE position. In total for the department, no significant change is expected for FY 2012-13, as compared to the FY 2011 -12 budget. • The Library and Arts Department provides staffing and a wide variety of programming for two library branches, a library learning center, and a cultural arts office. The department's budget is projected to decrease by $100,000, or 1 percent, from FY 2011- 12 to FY 2012-13, largely due to the downgrading of two full-time positions and the elimination of a net total of 1.0 hourly FTE position. . The Parks and Recreation Department plans, staffs and maintains the city's parks and recreational facilities, provides an assortment of recreational programs for all ages, maintains landscaping at facilities throughout the city, and manages the city's open space areas. Overall, the department's budget is decreasing by $400,000, or 3.1 percent, from the prior year, largely due to the elimination of 3.5 full-time and 0.16 hourly FTE positions in parks and tree maintenance, due to the modification of maintenance operations schedules in the Parks division. In addition, a net total of 5 hourly FTE positions are being eliminated in Recreation by altering service delivery methods and by coordinating duties between staff in the Parks and Recreation divisions. These personnel decreases amounted to almost $500,000 in savings for the department. Also, a decrease of $200,000 was made to the budget for instructional classes to better reflect actual expenses incurred over the last few years. These decreases were somewhat offset by a total $200,000 increase to the budget for a comprehensive City Trails Master Plan update and for a needs assessment study to address future park and recreation programming needs. In addition, the department budget increased by about $100,000 due to the transfer of the Special Events division from the Police Department, including one full-time position. • The Carlsbad Police Department provides high quality public safety services to the community by enforcing laws and ordinances, preserving the peace, and providing for the protection of life and property. Overall, the department's costs are decreasing by $200,000, or 0.7 percent, for FY 2012-13 as compared to FY 2011-12. Approximately $100^000 of the decrease is due to the transfer of the Special Events division, including one full-time position, to the Parks and Recreation Department. Also, in FY 2012-13, the budget is being reduced by $250,000 for booking fees not anticipated to be charged by the County and by another $150,000 in overtime, training, travel and vehicle costs due to savings anticipated from the opening of the City of Carlsbad's Safety Training Center. These reductions are offset by previously approved contractual wage increases, increases in public safety pension rates, health insurance rates. General Liability insurance and Fleet Replacement costs. "3 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW • The Property and Environmental Management Department manages all city-owned property, including real estate, buildings and vehicles. The department also manages the city's environmental programs, which include stormwater, habitat and other environmental maintenance and monitoring programs. The approximately $400,000, or 8.5 percent, increase from the prior year's budget is primarily due to additional costs associated with the opening of the City of Carlsbad's Safety Training Center, including the addition of one full-time and 0.75 hourly FTE positions. • The Utilities Department in the General Fund consists of Storm Drain Engineering activities. No significant change is expected for FY 2012-13 as compared to the FY 2011 -12 budget appropriation. • The Transportation Department manages all streets, traffic and other city-wide transportation services, including city traffic engineering, traffic signal monitoring and maintenance, and maintenance of all city streets and roadways. The department budget is expected to remain relatively flat from FY 2011-12 to FY 2012-13. • Non-departmental expenses include the transfers previously discussed, the Council Contingency account, and administrative and other expenses not associated with any one department. The non-departmental budget is expected to increase by $2.9 million, or 26.4 percent, in FY 2012-13. The increase is largely attributed to budgeting a $1.8 million transfer to the city's Self Insured Benefits Fund to assist with anticipated future pension rate increases. The Council Contingency is a budgeted amount that is available to the City Council to address unanticipated emergencies or unforeseen program needs during the fiscal year. Prior to the economic recession, the Council Contingency budget provided between 2 and 2.5 percent of the General Fund Operating Budget for these unforeseen costs. The Council Contingency was reduced significantly during the last three years to ensure a balanced budget during the economic recession. For FY 2012-13, the Contingency is budgeted at 1.3 percent of the General Fund Operating Budget, or $1.5 million, which is a $1.0 million increase compared to the FY 2011-12 budget. History of General Fund Budgeted Expenditures $ Millions 120 +9.5% I As reflected in the chart to the left, I the city's expenditures were i reduced significantly with the City +2.2% |H j Council's revised budget in FY m%. jam wm 1 2008-09, reflecting a 3.3 percent i decrease from the FY 2007-08 I Adopted Budg^et. A further 3.2 I percent reduction was made in FY 1 2009-10 in order to reduce I expenditures in line with FY2007-08 FY2008-09r FY2009-10 FY2010-11 FY2011-12 FY2012-13 ! continuod General Fund revenue $ii6.5m $ii2.7m $io9.im sio9.4m $iii.8m $ii5.im ( doclines. Expenditure projections ! for FY 2010-11 remained relatively flat, with growth of less than one percent, in anticipation of a flat economy. For FY 2011-12 General Fund expenditures showed a slight increase of 2.2 percent, supported by projected revenue increases. For FY 2012-13 General Fund expenditures are expected to increase by $3.3 million, or 3 percent, based on projections of continued economic growth. 1^ 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW Changes in Other Funds Special Revenue funds, at $10.9 million, are down $500,000, or 4.4 percent, from the prior year. This is mainly due to reduced funding for rental assistance and administration for the federal Community Development Block Grant program. Enterprise funds total $57.1 million, which is an increase of $3.6 million, or 6.7 percent, over the FY 2011-12 Adopted Budget. The most significant change in Water Operations is due to the increase in the cost of water purchased from the San Diego County Water Authority (11 percent increase in fixed costs and a 8.5 percent increase in variable costs due to a proposed increase from $957 to $1,063 per acre foot effective January 1, 2012). In addition, the cost of purchasing recycled water is anticipated to increase up to 11.5 percent when compared to the Adopted Budget for FY 2011-12. Carlsbad customers have decreased water consumption for several years; however, in FY 2011-12 the quantities purchased began to level off and even increase slightly. The quantities purchased are expected to stay the same in FY 2012-13 as in FY 2011- 12. The Operating Budget also includes additional funding for depreciation replacement transfers related to growth and aging of the water infrastructure system. Wastewater operations are projected to increase 2.1 percent, or $231,000, over the Adopted Budget for FY 2011-12. The operating budget includes additional funding for depreciation replacement transfers related to growth in the wastewater infrastructure system. The Internal Service funds total $14.9 million, a decrease of $400,000, or 2.6 percent, from the prior year. The Internal Service funds are self-supporting through user charges. Changes occurred in a number of these funds, including the following: • The Workers Compensation Fund budget shows a decrease of approximately $350,000, or 17.1 percent, based on lower claims projected for the fund, as compared to the prior fiscal years. • The Self Insured Benefits budget shows a decrease of approximately $100,000, or 10 percent, based on a projected decrease in the city's annual required contribution for post-employment health benefits from the fund. • The Vehicle Replacement Fund budget varies from year to year depending on the vehicles to be replaced. The budget for the fund is about $400,000 less than the previous year, or a 25.8 percent decrease, due to fewer vehicles being due for replacement than in the previous year. A list of the requested replacement vehicles can be found at the end of this document. • The Information Technology Fund shows an increase in the department's budget of approximately $200,000, or 3.5 percent, from FY 2011-12 to FY 2012-13. This is mostly due to more technology equipment being due for replacement than in the prior year. The budgets for the Redevelopment Obligation Retirement Funds (RORF) budgets have decreased by $400,000 or 22.2 percent, from the Redevelopment Agency Fund budgets shown in the previous year. On June 29, 2011, California Governor Jerry Brown signed ABX1 26 to dissolve ail redevelopment agencies within the State of California. All agencies were subsequently dissolved as of February 1, 2012, and a Successor Agency was designated to complete the work of the Carlsbad Redevelopment Agency (RDA) and satisfy the financial obligations. The FY 2012-13 Preliminary Operating Budget reflects the initial Recognized Obligation Payment Schedule (ROPS) that was prepared by the Successor Agency in April 2012, but which must ultimately be approved by the Oversight Board, the County of San Diego 3.^ 2012-13 PRELIMINARY OPERATING BUDGET OVERVIEW and the State of California. The initial ROPS identified financial commitments of the former RDA, including $250,000 in administrative costs, which will be paid from semi-annual tax increment revenue received by the Successor Agency. Every six months a new ROPS must be prepared and approved by the Oversight Board, the County of San Diego and the State of California in order to receive additional tax increment. The city eliminated two full-time positions as a result of the dissolution of the Carlsbad Redevelopment Agency. SUMMARY This Preliminary Operating Budget for FY 2012-13 provides a balanced budget for the coming fiscal year while continuing with a long-term plan to sustain a balanced budget in future years. Significant ongoing operating expenses were identified and incorporated in the FY 2012-13 to ensure the budget reflects the ongoing financial obligations of the city. The Carlsbad economy is starting to improve, including new corporate headquarters and major hotel, retail and commercial projects which will strengthen the local economy. In addition, revenues are improving in the city, with continued gains seen in city sales and hotel tax revenues. However, Carlsbad still faces economic challenges from a fluctuating economy, an unsteady real estate market, continued fixed costs increases, and concerns over the impact that budget decisions at the state and federal levels could have on the city's financial situation. To meet these challenges, the city has initiated a program to evaluate all city operations looking for opportunities to reduce costs through efficiencies, shared services or contracting out services in some areas when that makes sense. The city has already seen results from these efforts. As fixed costs like utilities, insurance, and supplies have increased, departments have been able to reduce costs in other areas to maintain a balanced budget without impacting services provided to the community. The City of Carlsbad is entering the new fiscal year in a solid financial position and focused on the future. Careful planning and responsible management have allowed the city to not only maintain core services, but to also move ahead on community projects and other investments that contribute to an excellent quality of life in our community. Promoting a strong local economy and bringing more jobs to the city is a top priority. Due to continued fiscally conservative practices, the city is in an excellent position to take advantage of new economic opportunities that will allow our community to thrive now and for many years in the future. CITY OF CARLSBAD OPERATING FUNDS PROJECTED f^UNb BALANCES Exhibit 2 FUND UNRESERVED BALANCE JULY 1,2011 PROJECTED REVENUES PROJECTED EXPENDITURES ADVANCES &FUND TRANSFERS OTHER CHANGES PROJECTED BALANCE JUNE 30, 2012 GENERAL FUND REPAYMENT FROM SOLID WASTE ADVANCE TO SCCRDA ADVANCE TO GOLF COURSE FUND ADVANCE TO HABITAT MITIGATION FEE FUND CHANGE IN RESERVATIONS & DESIGNATIONS TOTAL GENERAL FUND SPECIAL REVENUE AFFORDABLE HOUSING BUENA VISTA CHANNEL MAINTENANCE CITIZEN'S OPTION FOR PUBLIC SAFETY COMMUNITY ACTIVITY GRANTS COMMUNITY DEVELOPMENT BLOCK GRANT CULTURAL ARTS DONATIONS LIBRARY AND ARTS ENDOWMENT FUND LIBRARY GIFTS/BEQUESTS LIGHTING AND LANDSCAPING DISTRICT NO. 2 LOCAL CABLE INFRASTRUCTURE FUND MEDIAN MAINTENANCE POLICE ASSET FORFEITURE POLICE GRANTS RECREATION DONATIONS RENTAL ASSISTANCE - SECTION 8 SENIOR DONATIONS STREET LIGHTING STREET TREE MAINTENANCE TOTAL SPECIAL REVENUE ENTERPRISE WATER OPERATIONS RECYCLED WATER OPERATIONS WASTEWATER OPERATIONS SOLID WASTE MANAGEMENT TOTAL ENTERPRISE INTERNAL SERVICE WORKERS' COMPENSATION RISK MANAGEMENT SELF-INSURED BENEFITS VEHICLE MAINTENANCE VEHICLE REPLACEMENT INFORMATION TECHNOLOGY TOTAL INTERNAL SERVICE REDEVELOPMENT OBLIGATION RETIREMENT FUNDS VILUGE RDA OBLIGATION RETIREMENT FUND VILLAGE LOW AND MODERATE INCOME HOUSING $57,533,210 (2,420,725) 5,371,069 (806.115) 9,592,343 11,736,572 1,906,287 9,685 1,142,671 555,964 14,377,845 4,212,294 22,204,746 3,002,830 7,156,252 $114,613,000 $111,355,390 (400,000) 33,071,800 6,718,650 11,331,000 3,309,943 54,431,393 1,577,084 1,681,970 870,950 2,911,815 2,079,047 6,712,808 15,833,674 2,686,600 431,680 32,013,625 7,409,233 10,408.759 3,141,223 52,972,840 2,393,578 1,356,594 785,000 2,719,368 1,388,853 7,018,150 15,661,543 340,000 70,191 (1,252,000) $60,790,820 0 (400.000) 0 0 (1,252,000) 57,533,210 114,613,000 111,355,390 59,138,820 14,798,713 2,264,350 530,047 16,533,016 1,304,696 125,700 293,511 1,136,885 (1,765) 84,000 82,235 0 1,065,885 5.000 35,140 1,035.745 2,029,724 24.000 99,777 1,953,947 160,089 29.400 89,029 100,460 260,535 1.000 6,000 255,535 127,598 129.600 130,110 127,088 1.206.572 432.500 220,147 1,418.925 502,958 329.000 450,106 381.852 200,906 718.500 842,662 76.744 804,514 53.000 247,487 610.027 44,400 185.000 649,348 (419,948) 223,008 31.200 42,333 211,875 1,624,233 5.902,000 636,163 6,890,070 194,769 23,000 15,912 201,857 694,849 1,125,500 1,108,995 711,354 130,146 580,500 634,669 75,977 25,371,830 12.043,250 6,113,671 31,301,409 (1.362.550) 4.680,486 116,126 9,761,063 13,195,125 1,089,793 335,061 1,228,621 748,411 15,068,039 3,906,952 22,376,877 5.349,430 7,517,741 sec RDA OBLIGATION RETIREMENT FUND 3,501,055 18,300 170,196 400.000 3,749,159 sec LOW AND MODERATE INCOME HOUSING 269,303 1.000 47.156 223.147 TOTAL REDEVELOPMENT OBLIGATION RETIREMENT FUNDS 13,929,440 3,137,580 627.543 16,839,477 TOTAL OPERATING FUNDS $130,775,798 $200,058,897 $186,730,987 $0 ($1,252,000) $142,851,708 FOR THE GENERAL FUND ONLY THIS REPRESENTS UNDESIGNATED, UNRESERVED FUND BALANCE. OPERATING FUNDS PROJECTED FUND BALANCES Exhibit 2 FUND PROJECTED BALANCE JULY 1,2012 ESTIMATED REVENUES ADOPTED BUDGET ADVANCES &FUND TRANSFERS OTHER CHANGES PROJECTED BALANCE JUNE 30, 2013 GENERAL FUND REPAYMENT FROM SOLID WASTE ADVANCE TO SCCRDA ADVANCE TO GOLF COURSE FUND ADVANCE TO HABITAT MITIGATION FEE FUND CHANGE IN RESERVATIONS & DESIGNATIONS TOTAL GENERAL FUND SPECIAL REVENUE AFFORDABLE HOUSING BUENA VISTA CHANNEL MAINTENANCE CITIZEN'S OPTION FOR PUBLIC SAFETY COMMUNITY ACTIVITY GRANTS COMMUNITY DEVELOPMENT BLOCK GRANT CULTURAL ARTS DONATIONS LIBRARY AND ARTS ENDOWMENT FUND LIBRARY GIFTS/BEQUESTS LIGHTING AND LANDSCAPING DISTRICT NO. 2 LOCAL CABLE INFRASTRUCTURE FUND MEDIAN MAINTENANCE POLICE ASSET FORFEITURE POLICE GRANTS RECREATION DONATIONS RENTAL ASSISTANCE - SECTION 8 SENIOR DONATIONS STREET LIGHTING STREET TREE MAINTENANCE TOTAL SPECIAL REVENUE ENTERPRISE WATER OPERATIONS RECYCLED WATER OPERATIONS WASTEWATER OPERATIONS SOLID WASTE MANAGEMENT TOTAL ENTERPRISE INTERNAL SERVICE WORKERS' COMPENSATION RISK MANAGEMENT SELF-INSURED BENEFITS VEHICLE MAINTENANCE VEHICLE REPLACEMENT INFORMATION TECHNOLOGY TOTAL INTERNAL SERVICE REDEVELOPMENT OBLIGATION RETIREMENT FUNDS $59,138,820 * $116,101,000 59,138,820 16.533.016 1,136,885 0 1,035.745 1,953.947 100,460 255,535 127,088 1,418,925 381,852 76,744 610,027 (419,948) 211,875 6,890,070 201,857 711,354 75,977 31,301,409 (1,362,550) 4,680.486 116,126 9.761,063 13,195,125 1,089,793 335,061 1,228,621 748,411 15.068,039 3,906,952 22,376,877 VILLAGE RDA OBLIGATION RETIREMENT FUND 5,349,430 VILLAGE LOW AND MODERATE INCOME HOUSING 7,517,741 sec RDA OBLIGATION RETIREMENT FUND 3.749,159 see LOW AND MODERATE INCOME HOUSING 223,147 TOTAL REDEVELOPMENT OBLIGATION RETIREMENT FUNDS 16,839.477 1.234,980 121,950 110,388 15,000 0 41,500 4,000 120,000 518,031 369.000 736,118 62.000 668,615 20.750 5.770.242 25.000 884,174 611,150 11,312.898 35,901.800 7.265,650 11.941,000 3.453.200 58.561.650 1.500,830 1.858,560 2.712,594 2.752.170 2.120.012 6,707,781 17,651,947 2,145,000 0 0 0_ 2,145,000 $115,148,098 115,148,098 573,244 133,230 110,388 28,000 540,570 56.500 4.000 65.620 236,256 362,535 735,758 35,775 0 45,319 6,219,914 37,990 1,025,421 651,432 10,861,952 34,654,191 7,627,340 11,288,941 3,503,924 57,074,396 1,655,668 1,673.429 988,113 2,837,449 1,274,500 6,519,859 14,949,018 1,396,715 0 0 0 1,396,715 $60,091,722 0 0 0 0 0_ 60,091,722 17,194,752 1,125,605 0 1,022,745 1,413,377 85,460 255,535 181,468 1,700,700 388,317 77,104 636,252 248,667 187,306 6,440,398 188,867 570,107 • 35,695 31,752,355 (114,941) 4,318,796 768,185 9,710,339 14,682,379 934,955 520,192 2,953,102 663,132 15,913,551 4,094,874 25.079,806 6.097.715 7.517,741 3,749,159 223,147 17,587.762 TOTAL OPERATING FUNDS $142,851,708 $205,772,495 $199,430,179 $0 $149,194,024 FOR THE GENERAL FUND ONLY THIS REPRESENTS UNDESIGNATED, UNRESERVED FUND BALANCE. ^1 CITY OF CARLSBAD OPERATING FUNDS REVENUE ESTIMATES Exhibit 3 REVENUE SOURCE ACTUAL REVENUE 2010-11 PROJECTED REVENUE 2011-12 ESTIMATED REVENUE 2012-13 AS% OF FY 11-12 PROJECTED DIFFERENCE 2011-12 TO 2012-13 [GENERAL FUND TAXES PROPERTY TAX SALES TAX TRANSIENT TAX FRANCHISE TAX BUSINESS LICENSE TAX TRANSFER TAX TOTAL TAXES INTERGOVERNMENTAL VEHICLE LICENSE FEES HOMEOWNERS EXEMPTION OTHER INTERGOVERNMENTAL TOTAL INTERGOVERNMENTAL LICENSES AND PERMITS BUILDING PERMITS OTHER LICENSES 8, PERMITS TOTAL LICENSES & PERMITS CHARGES FOR SERVICES PLANNING FEES BUILDING DEPT. FEES ENGINEERING FEES AMBULANCE FEES RECREATION FEES OTHER CHARGES OR FEES TOTAL CHARGES FOR SERVICES FINES AND FORFEITURES INCOME FROM INVESTMENTS AND PROPERTY* INTERDEPARTMENTAL CHARGES OTHER REVENUE SOURCES TOTAL GENERAL FUND $48,409,518 26,386,132 11.568.576 4.649,535 3,581,368 910,976 95,506,105 483,273 372,945 1,066,496 1,922,714 767,581 822,704 1,590,285 285,268 681,264 668,756 2,471,422 1,694,304 660,770 6,461,784 2.219,842 3.015,094 2,652,756 $114,370,042 $48,107,000 27,561,000 12,545,000 4.785.000 3,689,000 950,000 97,637,000 53,000 375,000 799,000 1,227,000 665,000 870,000 1,535,000 350,000 628,000 640,000 2,525,000 1,500,000 673,000 6,316,000 900,000 2,321,000 3,700,000 977,000 $114,613,000 $47,805,000 28,782,000 13,482,000 4,883,000 3,556,000 1,086,000 99,594,000 0 377,000 496,000 873,000 596,000 780,000 314,000 563,000 573,000 2,581,000 1,527,000 685,000 6,243,000 916,000 $116,101,000 -0.6% 4.4% 7.5% 2.1% -3.6% 14.3% 2.0% -100.0% 0.5% -37,9% -28.9% -10.4% -10.3% -10.3% -10.4% -10.5% 2.2% 1.8% 1.8% -1.2% 10.9% -0.7% -13.0% ($302,000) 1.221,000 937,000 98,000 (133,000) 136,000 1,957,000 (53,000) 2,000 (303,000) (354,000) (69,000) (90,000) (159,000) (36.000) (65,000) (67,000) 56,000 27,000 12,000 (73,000) 16,000 253,000 (25,000) (127,000) $1,488,000 • INTEREST IS CALCULATED ON AN AMORTIZED COST BASIS CITY OF CARLSBAD OPERATING FUNDS REVENUE ESTIMATES Exhibit 3 REVENUE SOURCE ACTUAL REVENUE 2010-11 PROJECTED REVENUE 2011-12 ESTIMATED REVENUE 2012-13 AS% OF FY 11-12 PROJECTED DIFFERENCE 2011-12 TO 2012-13 SPECIAL REVENUE FUNDS AFFORDABLE HOUSING AFFORDABLE HOUSING FEES FEDERAL GRANT STATE GRANT INTEREST OTHER TOTAL AFFORDABLE HOUSING BUENA VISTA CHANNEL MAINTENANCE BUENA VISTA FEES INTEREST TOTAL BUENA VISTA CHANNEL MAINTENANCE CITIZEN'S OPTION FOR PUBLIC SAFETY STATE FUNDING (AB3229) INTEREST TOTAL CITIZENS OPTION FOR PUBLIC SAFETY COMMUNITY ACTIVITY GRANTS INTEREST TOTAL COMMUNITY ACTIVITY GRANTS COMMUNITY DEVELOPMENT BLOCK GRANT FEDERAL GRANT INTEREST OTHER TOTAL COMMUNITY DEVELOPMENT BLOCK GRANT CULTURAL ARTS DONATIONS DONATIONS INTEREST OTHER TOTAL CULTURAL ARTS DONATIONS LIBRARY AND ARTS ENDOWMENT FUND INTEREST TOTAL LIBRARY AND ARTS ENDOWMENT FUND LIBRARY GIFTS/BEQUESTS GIFTS/BEQUESTS INTEREST TOTAL LIBRARY GIFTS/BEQUESTS LIGHTING AND LANDSCAPING DISTRICT NO. #2 LLD #2 FEES INTEREST TOTAL LIGHTING AND LANDSCAPING DIST. NO. #2 LOCAL CABLE INFRASTRUCTURE FUND CABLE FEES INTEREST TOTAL LOCAL CABLE INFRASTRUCTURE FUND MEDIAN MAINTENANCE MEDIAN MAINTENANCE FEES INTEREST OTHER TOTAL MEDIAN MAINTENANCE POLICE ASSET FORFEITURE ASSET FORFEITURES INTEREST TOTAL POLICE ASSET FORFEITURE POLICE GRANTS FEDERAL GRANT INTEREST TOTAL POLICE GRANTS $69,730 89.988 1,000 199,045 601,205 960,968 82,679 17,632 100,311 104,732 6 13,753 405.785 950,929 1,032,304 2,389,018 41,690 1.623 5,000 48,313 3,450 195,312 2,589 415.424 16,118 356,330 6,507 358,994 148 253,850 612,992 49,473 10,521 59,994 247,572 (2,197) $1,720,000 24.350 0 60,000 460,000 2,264,350 100,000 25,700 83,000 1,000 0 24,000 0 24,000 23,000 400 6,000 29,400 1,000 1,000 128,600 1,000 129,600 412,500 20,000 432,500 326,000 3,000 359,000 0 359,500 718,500 50,000 3,000 53,000 185.000 0 185.000 $174,000 580.000 980 260,000 220,000 1,234,980 100,000 21,950 121,950 110,388 0 15,000 34,000 0 7,500 41,500 120,000 0 120,000 489,632 28,399 518,031 362,000 7,000 358,029 0 378,089 736,118 50,000 12,000 62,000 668,615 0 -89.9% 2281.9% 0.0% 333.3% -52.2% -45.5% 0.0% -14.6% 33.0% -100.0% 31.4% 200.0% 0.0% -100.0% 0.0% -100.0% 47.8% -100.0% 25.0% 41.2% 300.0% -6.7% -100.0% 18.7% 42.0% 19.8% 11.0% 133.3% -0.3% 0.0% 5.2% 2.5% 0.0% 300.0% 17.0% 261.4% 0.0% ($1,546,000) 555,650 980 200,000 (240,000) (1,029,370) 0 (3,750) (3,750) 27,388 (1,000) 10,000 0 (24,000) 0 (24,000) 11,000 (400) 1,500 12,100 3,000 3,000 (8,600) (1,000) (9,600) 77,132 8,399 36,000 4,000 (971) 0 18,589 17,618 0 9,000 9,000 483,615 0 CITY OF CARLSBAD OPERATING FUNDS REVENUE ESTIMATES Exhibit 3 REVENUE SOURCE ACTUAL REVENUE 2010-11 PROJECTED REVENUE 2011-12 ESTIMATED REVENUE 2012-13 AS% OF FY 11-12 PROJECTED DIFFERENCE 2011-12 TO 2012-13 I SPECIAL REVENUE FUNDS - CONTINUED PUBLIC ART INTEREST TOTAL PUBLIC ART RECREATION DONATIONS DONATIONS & GRANTS INTEREST TOTAL RECREATION DONATIONS RENTAL ASSISTANCE FEDERAL GRANT INTEREST OTHER TOTAL RENTAL ASSISTANCE SENIOR DONATIONS DONATIONS INTEREST OTHER TOTAL SENIOR DONATIONS STREET LIGHTING GOVERNMENT GRANTS AND LOANS STREET LIGHTING FEES INTERDEPARTMENTAL INTEREST TOTAL STREET LIGHTING STREET TREE MAINTENANCE TREE MAINTENANCE FEES INTEREST OTHER TOTAL STREET TREE MAINTENANCE TOTAL SPECIAL REVENUE FUNDS $2,182 2,182 65.385 3.226 68.611 6.620,340 20,440 21,558 6,662,338 12,956 2,632 14,841 30,429 581,412 732,058 0 (1.696) 1,595,131 466,663 4,989 0 471,652 $14,361,535 $0 30.200 1,000 31,200 5,879,000 3,000 20,000 5,902,000 8,000 1,000 14,000 23,000 204,500 879,200 0 13,800 1,125,500 465,000 1,500 114,000 580,500 $12,043,250 $0 20,750 0 20,750 5,703,538 16.704 50.000 5,770,242 8,000 2,000 15,000 25,000 0 730,557 0 12,230 884,174 461,493 0 149,657 611,150 $11,312,898 0.0% -31.3% -100.0% -33.5% -3.0% 456.8% 150.0% -2.2% 0.0% 100.0% 7.1% 8.7% -100.0% -16.9% 0.0% -11.4% -21.4% -0.8% -100.0% 31.3% 5.3% -6.1% $0 (9,450) (1,000) (10,450) (175,462) 13,704 30,000 (131,758) 0 1,000 1,000 2,000 (204,500) (148,643) 0 (1,570) (241,326) (3,507) (1,500) 35,657 30,650 ($730,352) CITY OF CARLSBAD OPERATING FUNDS REVENUE ESTIMATES Exhibit 3 REVENUE SOURCE ACTUAL PROJECTED ESTIMATED AS% DIFFERENCE REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO 2010-11 2011-12 2012-13 PROJECTED 2012-13 $18,160,522 $21,200,000 $23,300,000 9.9% $2,100,000 7,371,202 8,020,000 8,750,000 9.1% 730.000 2,755,099 2,930,000 2,930,000 0.0% 0 123,440 100,000 100,000 0.0% 0 120,051 125,000 125,000 0.0% 0 280,534 280,000 280,000 0.0% 0 (10,339) 2,800 1,000 -64.3% (1.800) 90,732 80,000 80,000 0.0% 0 89.560 90,000 90,000 0.0% 0 3,386,098 244,000 245,800 0.7% 1.800 32,366,899 33,071,800 35,901,800 8.6% 2,830,000 4,038,481 4,912,000 5,404,000 10.0% 492,000 525,300 575,000 625,000 8.7% 50,000 1,018,673 1,000,000 1,000,000 0.0% 0 73,721 125,000 100,000 -20.0% (25,000) 288,304 106,650 136,650 28.1% 30,000 5,944,479 6,718,650 7,265,650 8.1% 547,000 9,952,563 10,895,000 11,530,000 5.8% 635,000 20,491 20,000 20,000 0.0% 0 185,353 185,000 175,000 -5.4% (10,000) 79,510 90,000 80,000 -11.1% (10,000) 48,841 61,000 66,000 8.2% 5,000 237,374 80,000 70,000 -12.5% (10,000) 10.524,132 11,331,000 11,941,000 5.4% 610,000 127,950 163,000 160,000 -1.8% (3,000) 277,451 275,000 275,000 0.0% 0 54,286 53,000 53,000 0.0% 0 2,683,658 2,600,000 2,700,000 3.9% 100,000 296,556 218,943 265,200 21.1% 46,257 3,439,901 3,309,943 3,453,200 4.3% 143,257 $52,275,411 $54,431,393 $58,561,650 7.6% $4,130,257 [ENTERPRISE FUNDS WATER OPERATIONS WATER SALES READY TO SERVE CHARGES PROPERTY TAXES NEW ACCOUNT CHARGES BACK-FLOW PROGRAM FEES PENALTY FEES INTEREST ENGINEERING OVERHEAD SERVICE CONNECTION FEES OTHER TOTAL WATER OPERATIONS RECYCLED WATER OPERATIONS WATER SALES READY-TO-SERVE CHARGE RECYCLED WATER CREDITS INTEREST OTHER TOTAL RECYCLED WATER OPERATIONS WASTEWATER OPERATIONS SERVICE CHARGES MISC SEWER ENGINEERING OVERHEAD PENALTY FEES INTEREST OTHER TOTAL WASTEWATER OPERATIONS SOLID WASTE MANAGEMENT INTEREST RECYCLING FEES (AB939) PENALTY FEES TRASH SURCHARGE OTHER TOTAL SOLID WASTE MANAGEMENT TOTAL ENTERPRISE FUNDS SI CITY OF CARLSBAD OPERATING FUNDS REVENUE ESTIMATES Exhibit 3 REVENUE SOURCE ACTUAL REVENUE 2010-11 PROJECTED REVENUE 2011-12 ESTIMATED REVENUE 2012-13 AS% OF FY 11-12 PROJECTED DIFFERENCE 2011-12 TO 2012-13 INTERNAL SERVICE FUNDS WORKERS' COMPENSATION INTERDEPARTMENTAL INTEREST OTHER TOTAL WORKERS' COMPENSATION RISK MANAGEMENT INTERDEPARTMENTAL INTEREST OTHER TOTAL RISK MANAGEMENT SELF-INSURED BENEFITS INTERDEPARTMENTAL OTHER TOTAL SELF-INSURED BENEFITS VEHICLE MAINTENANCE INTERDEPARTMENTAL INTEREST OTHER TOTAL VEHICLE MAINTENANCE VEHICLE REPLACEMENT INTERDEPARTMENTAL INTEREST OTHER TOTAL VEHICLE REPLACEMENT INFORMATION TECHNOLOGY FEDERAL GRANT INTERDEPARTMENTAL INTEREST TOTAL INFORMATION TECHNOLOGY TOTAL INTERNAL SERVICE FUNDS $1,327,400 88,873 1,099,703 2,515,976 1,563,720 8,985 28,493 1,601,198 799,077 76,411 2,638,434 3,078 30,272 2,671,784 2,167,436 202,480 45,691 2,415,607 6,514,147 58,255 6,633,069 $16,713,122 $1,457,230 115,574 4,280 1,577,084 1,656,970 0 25,000 1,681,970 832,878 38,072 2,885,809 6,369 19,637 2,911,815 1,862,321 213,232 3,494 2,079,047 6,682,808 15,000 6,712,808 $15,833,674 $1,500,830 0 0 1,500,830 1,858,560 0 0 1,858,560 874,522 1,838,072 2,712,594 2,720,170 0 32,000 2,752,170 1,820,012 300,000 0 2,120,012 0 6,639,381 68,000 6,707,781 $17,651,947 3.0% -100.0% -100.0% -4.8% 12.2% 0.0% -100.0% 10.5% 5.0% 4727.9% 211.5% -5.7% -100.0% 63.0% -5.5% -2.3% 40.7% -100.0% 2.0% 0.0% -0.7% 353.3% -0.1% $43,600 (115,574) (4,280) (76,254) 201,590 0 (25,000) 176,590 41,644 1,800,000 (165,639) (6,369) 12,363 (159,645) (42,309) 86,768 (3,494) 40,965 0 (43,427) 53,000 (5,027) $1,818,273 32 CITY OF CARLSBAD OPERATING FUNDS REVENUE ESTIMATES Exhibit 3 REVENUE SOURCE ACTUAL REVENUE 2010-11 PROJECTED REVENUE 2011-12 ESTIMATED REVENUE 2012-13 AS% OF FY 11-12 PROJECTED DIFFERENCE 2011-12 TO 2012-13 [ REDEVELOPMENT OBUGATION RETIREMENT FUNDS j VILLAGE RDA OBLIGATION RETIREMENT FUND RENTAL INCOME TAX INCREMENT INTEREST OTHER TOTAL VILLAGE OPERATIONS / DEBT SERVICE VILLAGE LOW AND MODERATE INCOME HOUSING TAX INCREMENT INTEREST OTHER TOTAL VILLAGE LOW AND MOD INCOME HOUSING sec RDA OBLIGATION RETIREMENT FUND INTEREST OTHER TOTAL SCCRDA OPERATIONS / DEBT SERVICE see LOW AND MODERATE INCOME HOUSING INTEREST TOTAL SCCRDA LOW AND MOD INCOME HOUSING TOTAL REDEVELOPMENT FUNDS $14,862 2,820,708 40,155 7,718 2,883,443 705,177 357,718 0 1,062,895 96.129 0 96,129 3,380 $4,045,847 $8,800 2,665,000 10,000 2,800 2,686,600 399,680 17,000 15,000 431,680 15,000 3,300 18,300 1,000 1,000 $3,137,580 $0 2,130,000 15,000 0 2,145,000 $2,145,000 -100.0% -20.1% 50.0% -100.0% -20.2% -100.0% -100.0% -100.0% -100.0% -100.0% -100.0% -100.0% -31.6% ($8,800) (535,000) 5,000 (2,800) (541,600) (399,680) (17,000) (15,000) (431,680) (15,000) (3,300) (18,300) (1,000) (1,000) ($992,580) [TOTAL OPERATING FUNDS $201,765,957 $200,058,897 $205,772,495 2.9% $5,713,598 [ 23 CITY OF CARLSBAD OPERATING FUNDS BUDGET EXPENDITURE SCHEDULE Exhibit 4 DEPARTMENT 2009-10 ACTUAL* 2010-11 ACTUALS %INCR (DEC) 2011-12 11-12 BUD ESTIMATED 2011-12 2012-13 TO EXPENDITURES BUDGET BUDGET 12-13 BUD $298,245 $372,344 $352,729 -5.3% 1,192,657 1.336.460 1,336,908 0.0% 124,469 139.803 141,563 1.3% 1,282,132 1.491,771 1,504,476 0.9% 185,503 197.922 194,812 -1.6% 773,000 679,661 725,987 6.8% 685,930 698,511 792,303 13.4% 4,541,936 4,916,472 5.048.778 2.7% 3,682,088 3,383,709 3,511.305 3.8% 1.952,201 2,294,266 2.275.507 -0.8% 4,820,111 4.738,531 5.135,939 8.4% 10,454,400 10.416,506 10,922,751 4.9% 6,934.565 7.161,357 7,061,612 -1.4% 535,067 550,245 565,991 2.9% 7,469,632 7,711,602 7,627,603 -1.1% 10,519,653 10.412,121 10,308,502 -1.0% 12,076,572 13,115.867 12,718,661 -3.0% 22.596,225 23.527,988 23,027,163 -2.1% 16,923.225 16,931,875 17,540,315 3.6% 27,738,304 28.108,895 27,937,848 -0.6% 44.661.529 45,040,770 45,478,163 1.0% 10,007.090 8,883,352 8,840,761 -0.5% 269,643 281,317 281,483 0.1% 10.276.733 9,164,669 9,122.244 -0.5% GENERAL FUND POLICY AND LEADERSHIP GROUP INTERNAL SERVICES COMMUNITY DEVELOPMENT COMMUNITY SERVICES LIBRARY AND ARTS PARKS AND RECREATION TOTAL COMMUNITY SERVICES PUBLIC SAFETY FIRE POLICE TOTAL PUBLIC SAFETY PUBLIC WORKS TRANSPORTATION STORM DRAIN ENGINEERING TOTAL PUBLIC WORKS CITY COUNCIL CITY ATTORNEY CITY CLERK CITY MANAGER CITY TREASURER COMMUNICATIONS RECORDS MANAGEMENT TOTAL POLICY AND LEADERSHIP GROUP $333,004 1.294,939 105.532 1,598,471 189,895 765,065 777,147 5,064.053 FINANCE HUMAN RESOURCES PROPERTY AND ENVIROMENTAL MANAGEMENT TOTAL ADMINISTRATIVE SERVICES 3,290,451 2,255,036 4.637,869 10,183,356 COMMUNITY AND ECONOMIC DEVELOPMENT HOUSING AND NEIGHBORHOOD SERVICES TOTAL COMMUNITY DEVELOPMENT 8,141,073 390,147 8,531,220 10,101,250 12,323,928 22,425,178 17.111,580 27,291,191 44,402,771 9,023,875 279.592 9,303.467 $352,145 1,327,414 176,655 1,348,850 181,262 793,887 775,002 4,955,215 3.472,814 2,320,758 4.660.673 10,454,245 7,309,222 400,062 7,709,284 10,528,095 11,867,576 22,395,671 16.121.182 27.670,820 43,792,002 8,312,277 260,580 8,572,857 NOTE: ESTIMATED EXPENDITURES MAY EXCEED ADOPTED BUDGET SINCE THEY INCLUDE PRIOR YEAR BUDGET APPROPRIATIONS. * ACTUALS. ESTIMATED EXPENDITURES AND BUDGET HAVE BEEN ADJUSTED TO REFLECT THE CITYS REORGANIZATION IMPLEMENTATION. CITY OF CARLSBAD OPERATING FUNDS BUDGET EXPENDITURE SCHEDULE Exhibit 4 DEPARTMENT 2009-10 ACTUAL* 2010-11 ACTUALS 2011-12 ESTIMATED EXPENDITURES 2011-12 BUDGET 2012-13 BUDGET %INCR (DEC) 11- 12 BUD TO 12- 13 BUD GENERAL FUND - CONTINUED MISCELLANEOUS NON-DEPARTMENTAL EXPENDITURES COMMUNITY CONTRIBUTIONS 22,000 51,612 187,316 33,640 0 -100.0% DUES & SUBSCRIPTIONS 55,081 62,931 54,481 55.000 55,550 1.0% LEGAL SERVICES 42,231 58,605 51,945 80.000 80,000 0.0% PROFESSIONAL SERVICES 37,039 130,552 379,386 88,000 316,100 259.2% OTHER MISCSELLANEOUS EXPENDITURES 56,373 49,566 176,447 0 0 - PERSONNEL RELATED 336,594 26,340 57,904 0 140,000 - PROPERTY TAX & OTHER ADMINISTRATION 660,807 724,334 747,864 750,000 800,000 6.7% TOTAL EXPEDNITURES 1,210,125 1,103,940 1,655.343 1,006,640 1,391,650 38.2% TRANSFERS INFRASTRUCTURE REPLACEMENT FUND 6.538,000 7,175,000 7,382,000 7,382,000 7,547,000 2.2% TRANSFERS TO SELF INSURED BEN.-PERS SETASIDE 0 0 0 0 1,800,000 - TRANSFERS TO GOLF COURSE: DEBT SERVICE 0 0 1,110,750 1.110,750 945,000 -14.9% TRANSFERS TO GOLF COURSE: OPERATING SUBSIDY 0 0 533,842 295,000 0 -100.0% TRANSFER TO LLD#1 (MEDIANS & TREES) 0 253,850 473,000 473,000 527,746 11.6% TRANSFER TO STORM WATER PROGRAM 177,000 134,790 200,000 215,000 210,000 -2.3% OTHER MISCELLANEOUS TRANSFERS 3,137,463 1,350,000 0 0 0 TOTAL TRANSFERS 9,852.463 8,913,640 9,699,592 9,475,750 11,029,746 16.4% TOTAL MISCELLANEOUS NON-DEPARTMENTAL TOTAL MISCELLANEOUS NON-DEPARTMENTAL 11.062,588 10,017,580 11,354,935 10,482,390 12,421,396 18.5% SUBTOTAL GENERAL FUND CONTINGENCIES TOTAL GENERAL FUND 110.972.633 107,896,854 111,355,390 111,260,397 113,648.098 2.1% SUBTOTAL GENERAL FUND CONTINGENCIES TOTAL GENERAL FUND 0 0 0 500,000 1,500,000 200.0% SUBTOTAL GENERAL FUND CONTINGENCIES TOTAL GENERAL FUND $110,972,633 $107,896,854 $111,355,390 $111,760,397 $115,148,098 3.0% CITY OF CARLSBAD OPERATING FUNDS BUDGET EXPENDITURE SCHEDULE %INCR (DEC) 2011-12 11-12 BUD 2009-10 2010-11 ESTIMATED 2011-12 2012-13 TO DEPARTMENT ACTUAL* ACTUALS EXPENDITURES BUDGET BUDGET 12-13 BUD SPECIAL REVENUE FUNDS AFFORDABLE HOUSING $489,965 $422,790 $530,047 $473,580 $573,244 21.0% BUENA VISTA CHANNEL MAINTENANCE 81.213 84.852 293,511 293,511 133.230 -54.6% CITIZEN'S OPTION FOR PUBLIC SAFETY 128.970 90.447 82,235 0 110.388 - COMMUNITY ACTIVITY GRANTS 40,000 0 35,140 50,000 28.000 -44.0% COMMUNITY DEVELOPMENT BLOCK GRANT 435.628 584.813 99,777 664,834 540,570 -18.7% CULTURAL ARTS DONATIONS 83.512 78.703 89,029 76,960 56,500 -26.6% LIBRARY AND ARTS ENDOWMENT FUND 13.025 6.605 6,000 4,000 4,000 0.0% LIBRARY GIFTS/BEQUESTS 188.672 118.516 130,110 59,000 65,620 11.2% LIGHTING AND LANDSCAPING DISTRICT NO. 2 214.478 192.045 220,147 216,847 236,256 9.0% LOCAL CABLE INFRASTRUCTURE FUND 197,584 271.414 450,106 366,962 362,535 -1.2% MEDIAN MAINTENANCE 599,179 715,442 842,662 730,814 735,758 0.7% POLICE ASSET FORFEITURE 99,419 19,450 247,487 156,258 35,775 -77.1% POLICE GRANTS 38,304 341,661 649,348 0 0 - PUBLIC ART 6,542 187,672 0 0 0 - RECREATION DONATIONS 26,933 28,482 42,333 44.408 45,319 2.1% RENTAL ASSISTANCE 6,251,051 6,356,973 636,163 6,622.482 6,219,914 -6.1% SENIOR DONATIONS 23,095 30,973 15,912 34.990 37,990 8.6% STREET LIGHTING 1,287,285 2,268,015 1,108,995 1,002,765 1,025,421 2.3% STREET TREE MAINTENANCE 552,035 645,070 634,669 643,892 651,432 1.2% TOTAL SPECIAL REVENUE FUNDS $10,756,890 $12,443,923 $6,113,671 $11,441,303 $10,861,952 -5.1% ENTERPRISE FUNDS WATER OPERATIONS $29,330,780 $32,787,830 $32,013,625 $31,554,624 $34,654,191 9.8% RECYCLED WATER OPERATIONS 6,419,797 5.926,059 7,409,233 7.404.022 7,627,340 3.0% WASTEWATER OPERATIONS 10,003,751 7,961,081 10.408,759 11,058,124 11,288,941 2.1% SOLID WASTE MANAGEMENT 2,660.596 2,544,050 3.141.223 3,500,924 3,503,924 0.1% TOTAL ENTERPRISE FUNDS $48,414,924 $49,219,020 $52,972,840 $53,517,694 $57,074,396 6.6% INTERNAL SERVICE FUNDS WORKERS' COMPENSATION $1,596,033 $3,029,600 $2,393,578 $1,996,557 $1,655,668 -17.1% RISK MANAGEMENT 1,118,322 2,275.616 1.356,594 1,381,044 1,673,429 21.2% SELF-INSURED BENEFITS 959,026 983.628 785,000 1,098,265 988,113 -10.0% VEHICLE MAINTENANCE 2,576,267 2.701.744 2.719,368 2,845,518 2,837,449 -0.3% VEHICLE REPLACEMENT 1,042,260 1.380,253 1,388,853 1,716,500 1,274,500 -25.8% INFORMATION TECHNOLOGY 5,971.417 6,180,017 7,018,150 6,299,288 6,519,859 3.5% TOTAL INTERNAL SERVICE FUNDS $13,263,325 $16,550,858 $15,661,543 $15,337,172 $14,949,018 -2.5% REDEVELOPMENT OBLIGATION RETIREMENT FUNDS VILLAGE RDA OBLIGATION RETIREMENT FUND $7,776,839 $2,130,553 $340,000 $1,441,954 $1,396,715 -3.1% VILLAGE LOW AND MODERATE INCOME HOUSING 82.053 78,209 70,191 73,558 0 -100.0% sec RDA OBLIGATION RETIREMENT FUND 1.233.314 643,494 170,196 195,459 0 -100.0% sec LOW AND MODERATE INCOME HOUSING 32,017 43,988 47,156 49,016 0 -100.0% TOTAL REDEVELOPMENT $9,124,223 $2,896,244 $627,543 $1,759,987 $1,396,715 -20.6% TOTAL OPERATING FUNDS $192,531,995 $189,006,899 $186,730,987 $193,816,553 $199,430,179 2.9% General Fund Non GF $115,148,098 84,282,081 $199,430,179 NOTE: Estimated expenditures may exceed Adopted Budget since they include prior year budget appropriations. * ACTUALS, ESTIMATED EXPENDITURES AND BUDGET HAVE BEEN ADJUSTED TO REFLECT THE CITY'S REORGANIZATION IMPLEMENTATION. Exhibit 5 PERSONNEL ALLOCATIONS FINAL BUDGET 2010-11 FINAL BUDGET 2011-12 PRELIMINARY BUDGET 2012-13 2012-13 REQUESTED CHANGES CITY ATTORNEY 7.00 7.00 7.00 0.00 CITY COUNCIL 1.00 1.00 1.00 0.00 CITY MANAGER 8.00 7.00 7.00 0.00 CITY TREASURER 0.75 0.75 0.75 0.00 COMMUNICATIONS 2.75 2.75 2.75 0.00 COMMUNITY AND ECONOMIC DEVELOPMENT 54.00 50.00 47.00 (3.00) FINANCE AND RISK MANAGEMENT 30.50 30.50 30.50 0.00 FIRE 88.75 87.75 87.75 0.00 HOUSING AND NEIGHBORHOOD SERVICES 11.00 13.00 10.00 (3.00) HUMAN RESOURCES & WORKERS COMP 9.00 9.00 9.00 0.00 INFORMATION TECHNOLOGY 22.50 22.50 22.50 0.00 LIBRARY & ARTS 52.25 51.25 51.25 0.00 PARKS AND RECREATION 71.95 70.95 68.40 (2.55) POLICE 162.00 162.00 161.00 (1.00) PROPERTY AND ENVIRONMENTAL MANAGEMENT 41.60 39.60 40.55 0.95 RECORDS MANAGEMENT 8.00 6.25 6.00 (0.25) TRANSPORTATION 58.40 54.40 54.40 0.00 UTILITIES 69.55 68.55 67.65 (0.90) FULL AND 3/4 TIME LABOR FORCE 699.00 684.25 674.50 (9.75) SUMMARY OF REQUESTED LABOR FORCE BY CATEGORY 2010-11 2011-12 2012-13 Difference Full Time Personnel 3/4 Time Personnel in Full Time Count Limited Term Personnel Unfunded Full Time Positions Hourly Full Time Equivalent Personnel 694.50 4.50 0.00 (6.00) 138.94 679.75 4.50 0.00 (3.00) 139.74 669.00 4.50 1.00 0.00 132.58 (10.75) 0.00 1.00 3.00 (7.16) TOTAL LABOR FORCE* 831.94 820.99 807.08 (13.91) 2.1 EXHIBITS FY 2012-13 MASTER FEE SCHEDULE CHANGES For FY 2012-13 it is proposed tiiat general city and development related service fees be clianged by the one year increase in their associated index, unless, the actual cost of providing the service can't accept the indexed increase. In this instance the fee will be set at the cost of service. For FY 2012-13 it is proposed that the Development Impact Fees be changed by the cumulative percentage increase due to equity issues. These fees have been held in abeyance for the previous 3 years. Prior to the fees being held in abeyance, developers were paying the indexed fees. New developers are currently paying a lower fee and it is estimated that development projects will not have enough funds for development in those areas to be completed. Below is a list of the indexes and the fees that are associated with them: The following fees are proposed to change for FY 2012-13: INDEX ONE YEAR ASSOCIATED FEES West Urban CPI 2.80% General City and Development Related Service Fees Ambulance Inflation Factor 2.40% Ambulance Fees INDEX ONE YEAR 4 YEAR CUMULATIVE ASSOCIATED DEVELOPMENT IMPACT FEES January ENR 0.90% 9.90% PLDA Fees and License Tax on New Construction Mobile Homes April ENR 2.40% 11.70% All Other Develop. Impact Fees ( Sewer Benefit Area and Bridge & Thoroughfare District #2 ) December ENR 0.80% 9.90% Bridge & Thoroughfare District #3, Sewer Connection, Water District April San Diego CPI 3.00% 8.40% Habitat Mitigation Fee Cal Trans CCI 2.00% N/A Traffic Impact Fees NEW FEES: o Library Borrowing - Mobile Device Loan Late Fee (Per Item, Per Hour) - The Library has implemented a new program for patrons to check out mobile devices for free to use in the library for one hour at a time. The late fee of $5 will apply after a 20 minute grace period for each hour the equipment is late. o A fee has been added for Affordable Housing Credit Per Unit - Cassia Heights (Southeast and Southwest Cluadrants). It is currently being charged at $57,465 and needed to be added to the Master Fee Schedule. EXHIBITS REDUCED FEES: o The following fees are reduced to align with the FY 2011-12 Cost of Service Study. o Business License - Master List of Active Business Licenses Fee to be reduced from $51 to $42. o Permit - Motor Vehicle Repair to be reduced from $176 to $168. o Trails Inspection to be reduced from $667 to $298. o Water Meter - Construction Meter Relocation to be reduced from $34 to $27. o Water Service Fee - After Hour Turn On to be reduced from $185 to $174 o Water Service Fee - Door Hanger (paper or electronic) to be reduced from $12 to $10. o Police Proof of Correction Certification -All Others fee is not proposed to be indexed because that would make the fee greater than the cost calculated in the Cost of Service Study, o Administrative Fee - DUI to be reduced from $20 to $18. o Environmental Monitoring Fee to be reduced from $218 to $206. o Village Area Noticing Fee (Minor) cannot be fully indexed due to the Cost of Service Study calculation. Fee will match the calculated cost of service, o Village Review Permit Noticing Fee (Major) cannot be fully indexed due to the FY 2011-12 Cost of Service Study calculation. Fee will match the calculated cost of service, o Plumbing, Electrical, Mechanical Permit (not combined with Building Permits) cannot be fully indexed due to the FY 2011-12 Cost of Service Study calculation. Fee will match the calculated cost of service. o The Affordable Housing Credit Per Unit - Villa Loma (Southeast and Southwest Quadrants) Fee will decrease from $49,000 to $48,000. o Street Light Energizing Fees set by SDG&E will be decreased due to a reduction in the induction rate. DELETED FEES: o The Tournament Field Rental categories will be eliminated to create more consistency for the applicant. The tournament fee was a discounted fee for most rental categories. However, most of the field use rentals are in category B therefore we do not anticipate any change in revenue. o The fees for GIS 2005 2' Topographic Contour Lines and GIS 2005 Natural Color Aerial Photography in *.tif format are being eliminated because the City Attorney's Office stated that this is a public record and cannot be charged for. Waiting for a Supreme Court ruling that will either override or confirm this change. o For consistency purposes, all Parks & Recreation program and service fees that are currently on the Master Fee Schedule will be removed as they are already in the Community Services Guide. This affects fees related to aquatic programs for lessons and passes. TITLE CHANGES: o Library borrowing-Audio Visual Insurance Fee-Per Video Game/DVD to Library borrowing-Audio Visual Insurance Fee-Per DVD o Lost Damaged Video Game/DVD to Lost Damaged DVD o Non Refundable Security Deposit for Leo Carrillo Ranch (Categories B-F) to read Partially Refundable Security Deposit for Leo Carrillo Ranch (Categories B-F) and the terms to read $1,000 or payment in full. If the reservation is cancelled at least 90 days before the rental, then $500 of the deposit is refundable. Otherwise the entire $1,000 deposit is non-refundable. o Senior Center Kitchen Warming - Hourly Rate - Category A-F to read Senior Center Kitchen Warming & Small Lunch Room - Hourly Rate - Category A-F. EXHIBITS o Senior Center Art Room - Hourly Rate - Category A-F to read Senior Center Art Studio, Multipurpose Room & Game Room - Hourly Rate - Category A-F. o Trash Collection - Residential- Per Month to read Trash Collection - Residential - Per Month - 96 or 64 Gallon Cart. o A title change has been made to Affordable Housing Credit Per Unit (Southeast and Southwest Quadrants) to add the text Villa Loma. It now will read Affordable Housing Credit Per Unit - Villa Loma (Southeast and Southwest Quadrants). ANNUAL CHANGES; o Fish & Game Fee which is set by state statute NO CHANGE: o Water and Sewer fees will be reviewed as part of the Water and Sewer Master Plan which is scheduled to be completed in August 2012. Thus, it is proposed to not index these fees at this time and wait until the completion of this plan to modify them. 1FY 2012‐13 Preliminary Operating Budget 2FY 2012‐13 Budget Calendar•Council Meetings:–May 22 –CIP workshop–June  5 – Operating Budget Workshop•Set public hearing for June 26–June 26 – Public hearing and adoption of Fiscal Year 2012‐13 Operating and Capital Budgets•Other Public Meetings:–June 7 – Citizens Budget Workshop ‐Faraday, 6 p.m. 3Citizens Budget Workshop•When: Thursday, June 7•Where: City of CarlsbadFaraday Center1635 Faraday Ave. Room 173B•Time: 6 p.m.For additional informationCity of Carlsbad Finance Department760‐602‐2430 4FY 2012‐13 Budget Overview•Fiscal Responsibility–Balanced budget–Long‐term sustainability–Healthy reserves•Improving Outlook–Revenues increasing–Economy improving 5FY 2012‐13 Budget Overview (continued)•Careful planning, responsible management–Core services maintained throughout recession–Budget reductions made to meet rising costs–Continue to prioritize efficient operations–Focus on local economic growth and retention–City is able to move forward on community projects and new initiatives 6City of CarlsbadFY 2012‐13 Combined Budget$229.9 millionOperating Budget – 87%Capital – 13%Capital13% 7National & Global Outlook•Employment•Housing•Interest rates•Fiscal policy•Overseas 8U.S. GDP Growth Rate3.93.82.52.30.41.31.831.90123452010 Q12010 Q22010 Q32010 Q42011 Q12011 Q22011 Q32011 Q42012 Q1Percent Change in Gross Domestic ProductSource: Bureau of Economic Analysis 9State Perspective•$16 billion deficit•Impact to former RDA•Economic signs of life 10 11Carlsbad’s Economic Profile•Home prices•Taxable sales•Tourism 12General Fund Revues12 $95.0 $100.0 $105.0 $110.0 $115.0 $120.0 $125.02005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12e 2012‐13eMillionsFiscal YearTotal General Fund Revenues 1313General Fund RevenuesFiscal Year 2012‐13 $116.1 million 141401002003004005006007008009002005 2006 2007 2008 2009 2010 2011 2012ThousandsFiscal YearMedian SFR Home Prices 15Assessed Values and Property Taxes15 ‐ 10.0 20.0 30.0 40.0 50.0 60.0 ‐ 5.0 10.0 15.0 20.0 25.0FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013eMillionsBillionsAV ResidentialAV Com/IndustProperty Taxes 16CY 2011 Sales Taxes by Category16General Retail40%Food Products14%Transportation30%Construction2%Business to Business13%Misc.1%Sales Tax by CategoryFourth Quarter 2011 1717 18Transient Occupancy Taxes 1919FY 2012‐13 Operating Revenues by Fund TypeGeneral56%Special Revenue5%Redevelopment Obligation Retirement1%Enterprise29%Internal Service9%$205.8 million 202012‐13Proposed Operating Budget 21City Council’s goals, visions & priority projects10 year forecast monitoredBudget policies set for new fiscal yearDepartments submit requests to FinanceBudget reviewed and City Manager makes recommendations to City CouncilCity Council adopts budget & program optionsOperating Budget Process 22FY 2012‐13 Budget Policies•Provide a balanced budget•Plan for a balanced budget for future years•Minimize service level impacts to citizens 23FY 2012‐13 Budget Policies (continued)•No increase in number of positions, unless for new facilities•No growth in maintenance & operations•Identify efficiencies and reductions if possible to offset known budget increases•Budget discretionary items at minimal levels 24FY 2012‐13 Full‐Time Position Changes•Elimination of 10.75 full‐time positions:–3 previously unfunded–2 related to Redevelopment Agency elimination–3.5 from Parks and Recreation efficiencies–1 Building Inspector–1 Water Meter Reader–0.25 Remainder of Records Manager position•Addition of 1 full‐time , limited‐term position:–Facility Manager ‐Carlsbad Safety Training Center  251.0   Parks Maintenance Worker II1.0 Planning Technician0.25  Records Manager1.0    Senior Building Inspector1.5 Tree Trimmer II251.0 Assistant Planner1.0 Building Inspector II1.0  Code Compliance Specialist II1.0 Maintenance Aide1.0  Water Meter Reader1.0   Office Specialist IIFY 2012‐1310.75 Full‐Time Position Eliminations 26FY 2012‐13 Full‐Time Position Changes (continued)•Total citywide full‐time position count:684.25   FY 2011‐12 total (   9.75) Less: net position changes**674.50    FY 2012‐13 total**A total of 43.25 positions have been eliminated citywide since FY 2009‐10. 27General Fund History of Budgeted Full‐Time Positions695.75717.25717.75716.25699.00684.25674.50 28FY 2012‐13 Part‐Time Position Changes•Elimination of 7.91 hourly FTE positions•Addition of 0.75 FTE positions for maintenance of the new Carlsbad Safety Training Center•Total Citywide Hourly FTE (full‐time equivalent) position count:139.74   FY 2011‐12 total (   7.16)  Less: net position changes132.58   FY 2012‐13 total 2929FY 2012‐13 Budget Overview•Total  proposed citywide Operating Budget :   $199.4 million•Increase of $5.6 million (2.9 %) from FY 2011‐12 Adopted Budget•Significant fund increases:•$3.3 million – General Fund•$3.6 million –Enterprise Funds 30FY 2012‐13 Operating BudgetTotal Budget = $199.4 millionIn Millions 31General Fund Budget Comparison$72.8$73.3$29.5$30.8$9.5$11.0020406080100120140FY 2011‐12 FY 2012‐13TransfersM & O and CapitalOutlayPersonnelTotal $115.1In MillionsTotal $111.831 32General Fund History of Budgeted Expenditures 3333FY 2012‐13 General FundTotal Budget = $115.1 millionIn Millions 3434FY 2012‐13General Fund Budget Recap Revenues $ 116.1 millionBudget Requests $ 115.1 millionProjected Remainder $      1.0 million (0.9%) 3535General Fund BalanceEstimated Balance at 7/01/12 $  59.1 millionPlus:   FY 2012‐13 Remainder 1.0 millionLess:   FY 2012‐13 Advances       ‐0‐Estimated Balance at                   $ 60.1 million*6/30/13             *Excludes impact of Council Program Options 3636FY 2012‐13 Special Revenue FundsSection 8 $6.2 (57%)Maintenance Districts $2.8 (25%)Block grant $0.5 (5%)Other $1.4 (13%)Total Budget = $10.9 millionIn Millions 37FY 2012‐13Special Revenue FundsExpenditure highlights:•Section 8 Rental Assistance ‐$6.2 million•Special Assessment Districts ‐$2.8 million•Community Dev. Block Grant ‐$0.5 million•Community Activity Grants ‐$28,000 3838FY 2012‐13Internal Service FundsTotal Budget  = $14.9 millionIn Millions 39FY 2012‐13Internal Service FundsExpenditure highlights:•Fleet Replacement Equipment ‐$1.2 million•I.T. Replacement Equipment‐$800,000 4040FY 2012‐13 Enterprise FundsWater/Recyled Water $42.3 (74%)Wastewater $11.3 (20%)Solid Waste/Storm Water $3.5 (6%)Total Budget = $57.1 millionIn Millions 41Water Purchase Cost Increases•Purchased potable water from San Diego County Water Authority–Wholesale water – 11% increase–Fixed charges –8.5% increase•Purchased recycled water–28% increase over last 2 years 42Utility Rate IncreasesJanuary 2013MAXIMUM42•Water rates – 10% •Sewer charges –6% 43FY 2012‐13 Key Areas of Focus43 44Background•January Council goal setting workshop•Discussed trends affecting our city•Identified key areas of focus–Above and beyond day to day core city services 45Priorities and Resources•Focus on fulfilling the community vision•Even greater emphasis on efficiency and value•Money saved supports enhanced services45 46•Ensuring future financial health46Ensuring StrongFinancial Health 47Sustainable Organization•Focus on quality and efficiency–Changing the way we do business–High quality at best cost–Best value services–Pay for performance47 48Technology Strategy•City Link knowledge and service hub•Free public wireless access at parks and community centers•New permitting technology•Increased online public engagement•Exploring new public safety technology48 49•Creating quality jobs in a new economy49Creating Quality Jobsin a New Economy 50Quality Jobs in a New Economy•Business retention•Talent attraction•Education hub•Partnerships50 51•Land use in a changing community51Adapting to ChangingLand Use Needs 52Balancing Land Use Policies With a Changing Community•Envision Carlsbad–General Plan update•Land use–Zoning Ordinance update•Development standards52 53Balancing Land Use Policies With a Changing Community•Hilton Oceanfront Resort •LEGOLAND Hotel•Palomar Commons/ Lowes•La Costa Town Square•Plaza Camino Real redevelopment53 54•Safe and efficient transportation54Safe and Efficient Transportation 55Livable Streets•Streets are for moving “people”•Improves traffic flow•Enhances safety•Creates a sense of place55 56Livable Streets •State Street roundabout •Pedestrian crossings (streets and railroad)•Update policies and standards56 57Traffic Management•Residential Traffic Management Program–Part of livable streets–Makes neighborhoods safer57 58Traffic Management•Traffic Signal Program–El Camino Real, Palomar Airport Road, Faraday, Carlsbad Village Drive complete–Wait times already reduced–Next up:  Cannon, College, Ranch Santa Fe, Aviara Parkway58 59•Maintaining a safe community59Maintaining a Safe Community 60Safe Community•Safety Training Center•Fire Station 3 relocation•Regional Communication System•Barrio outreach and coordination•Securing city buildings and parks60 61•Meeting changing parks and recreation needs61Meeting Future Parks andRecreation Needs 62Changing Parks and Recreation Needs•Updating plans to meet future needs•Trails master plan•Alga Norte Community Park •Carlsbad Boulevard realignment62 63Committed to Open Space•Habitat Management Plan–Council goal of 40% citywide HMP Open Space–6,480 acres of dedicated HMP Open Space•Current public and private HMP ownership lands–5,850 acres of dedicated HMP Open Space–90% of HMP Open Space goal•Partnership with Resource Agencies and environmental advocacy groups 64Open Space•Future open space development acquisitions•La Costa Glen 108 acres•Carlsbad Raceway 46 acres•Cantarini Ranch 55 acres•Actively pursuing city acquisition opportunities–Review open space acquisitions on a quarterly basis–Partner with willing sellers 65Additional Priorities•Fostering next generation of leaders•Maintaining quality utility services•Securing new water sources•Library 50‐plus project•Car Country •Hydroelectric project65 66Fee Update 67Fee Descriptions•General city fees–Charged for the usage of city services and property•Development related service fees–Charged to recover the cost of staff time & materials spent on development related activities•Development impact fees–Charged to recover  the cost that growth is anticipated to have on city infrastructure67 6868Fee Escalators•Updated by change in West Urban Consumer Price Index (CPI)–General city fees–Development related service fees •Updated by change in Engineering News Record Index (ENR)–Development impact fees 69Cost of Service•Cost of Service Study was completed in FY 11‐12.•A comparison of the cost to provide the service and the fee requires that a number of fees be reduced. 70Fee EscalatorsINDEXONE YEAR ASSOCIATED FEESWest Urban CPI 2.80%General City and Development Related Service FeesAmbulance Inflation Factor2.40%Ambulance Fees 71Impact Fees to Remain Unchanged•Water Connection•Sewer Connection•Parks in Lieu•Public Facilities 72Fee EscalatorsINDEXONE YEAR4 YEAR CUMULATIVE ASSOCIATED DEVELOPMENT IMPACT FEESJanuary ENR 0.90% 9.90%PLDA FeesApril ENR 2.40% 11.70%Other Development Impact Fees•Sewer Benefit Area•Bridge & Thoroughfare District #2 December ENR 0.80% 9.90%Bridge & Thoroughfare District #3April San Diego CPI3.00% 8.40%Habitat Mitigation Fee 73Traffic Impact Fees•Ordinance CS‐028 states “that the traffic impact fee shall be adjusted annually as part of the budget process, by 2 percent or the annual percentage change in the Caltrans Construction Cost Index, whichever is higher”•TIF fees will increase on average from $216  to $221 74Other Recommended Fee Changes•Decrease in Street Light Energizing Fee•Decrease in Fees that exceed COS•Addition of Late Fee for Mobile Devices•Increase in Leo Carrillo Ranch Security Deposit 75FY 2012‐13 Budget Calendar•Council Meetings:–May 22 –CIP workshop–June  5 – Operating Budget Workshop•Set public hearing for June 26–June 26 – Public hearing and adoption of Fiscal Year 2012‐13 Operating and Capital Budgets•Other Public Meetings:–June 7 – Citizens Budget Workshop ‐Faraday, 6 p.m. 76Citizens Budget Workshop•When: Thursday, June 7•Where: City of CarlsbadFaraday Center1635 Faraday Ave. Room 173B•Time: 6 p.m.For additional informationCity of Carlsbad Finance Department760‐602‐2430 77FY 2012‐13 Preliminary Operating Budget 78 79Information TechnologyDeleted fees:•GIS 2005 2’ Topographic Contour Lines•GIS 2005 Natural Aerial Photography in *.tif format 80FY 2012‐13PROGRAM OPTIONS1.  Economic Development Program2.  Treasury FTE Increase3.  Funding School Resource Officers4.  Carlsbad Village‐Halloween on Elm event5.  Brownley Funds6.  CalPERS Unfunded Liability7.  Agua Hedionda Dredging 81Library FeesNew Fee:Library Borrowing – Mobile Device Loan Late Fee  ‐$5 per hour  82Franchise Taxes 83Parks & Recreation FeesTitle/Fee Change•PartiallyRefundable Security Deposit –Leo Carrillo Ranch –Categories B‐FDeleted Fees•Tournaments (Hourly Rates) Categories A‐F•Fees that are listed in the Community Services Guide 84Annual Index Changes•West Urban CPI–CY 2008 3.5%–CY 2009‐0.4%–CY 2010 1.1%–CY 2011 2.8%–Cumulative 7.2%•ENR Index–April 2009 6.4%–April 2010‐0.3%–April 2011 2.8%–April 2012 2.4%–Cumulative 11.7%Recommend general city and development related service fees increase by 1 year index change and Development Impact Fees by the cumulative index change. 85Discussion•Impact by Department of reducing costs•(e.g.. Parks and Recreation plans, Police changes) 86Housing & Neighborhood ServicesReduced Fees:Affordable Housing Credit Per Unit – Villa Loma (Southeast and Southwest Quadrants) from $49,000 to $48,000New Fees:Affordable Housing Credit Per Unit – Cassia Heights (Southeast and Southwest Quadrants) ‐$57,465 8787Infrastructure Replacement Fund•Funds the replacement of buildings and facilities (non water or sewer)•Annual contribution–FY 2009‐10 – $6.5 million–FY 2010‐11 – $7.2 million–FY 2011‐12 – $7.4 million–FY 2012‐13 – $7.5 million 88Water Enterprise FY 2012‐13 Expenditures$42.3 million88$4,177,486, 10%$12,039,723, 28%$18,790,200, 44%$5,293,000, 13%$2,036,009, 5%PersonnelM&OWater PurchasesTransfersDebt Payments 89Wastewater EnterpriseFY 2012‐13 Expenditures$11.3 million89$2,216,583 20%$3,241,45329%$2,200,905, 19%$3,630,000, 32%PersonnelEncinaCharges M&OReplacementFunding 90Wastewater EnterpriseIncreases in OperationsFY 2012‐13 to FY 2011‐12$230,000 (2.1%)•Encina charges –increase of $83,000•One‐time funding:–Maintenance in environmentally sensitive areas = $125,000 90 91Solid Waste / Storm WaterEnterprise Budget RequestFY 2012‐13 = $3.5 million91$1,542,777, 44%$1,372,726, 39%$588,421, 17%Storm DrainMaintenanceStorm WaterProtectionSolid WastePrograms Our Natural LegacyS.O.S. Save Our SpacePreserve CalaveraCoastal North San Diego County1 Mr. Mayor & City Council Members - You’ve Got Mail!Preserve CalaveraCoastal North San Diego County2 Worth a thousand wordsOver the last few weeks hundreds of residents have mailed you postcards. These cards sent a message asking you to allocate some reserve funds for Open Space Acquisition. The images of some of our beautiful natural lands on these cards show the importance of preserving this legacy. Here are some of those images … 4 MT. CalaveraWALK, RUN OR BIKE THE TRAILS5 Village “H” North6 7 Kato/Manada 9 The Hills are Alive10 11 ge H - a place of natural 18 19 20Preserving our Natural Resources 21 22 23 A teachable moment24 s a Community effort to preserve our open space legacy for future generationsis in your hands. iMacProductions