PURPOSE

The purpose of this report is to request that the City Council, Redevelopment Agency, Housing Authority, Parking Authority, Public Financing Authority and Youth Endowment Services (YES) Fund Board adopt the Fiscal Year (FY) 2007-08 Citywide Budget, Citywide Fee Schedule, and Appropriations Limit.

BACKGROUND

On May 8, 2007, staff presented a preliminary overview of the Proposed FY 2007-08 budget, along with the five-year forecast.  The Proposed Budget documents were distributed on May 3, 2007 for Council�s review prior to their annual May Goal Setting Workshop held on May 5, 2007.

Budget Study Sessions were held on May 8, May 15, and May 22, 2007.  The purpose of these sessions was to give Council the opportunity to review each department�s budget, and to provide an opportunity for them to ask questions and make modifications to the budget.  Additionally, on May 29, 2007, the Council reviewed their respective goals for the upcoming year and recommended funding for various items.

The Annual Public Hearing for the Budget was held on June 12, 2007, and after hearing public comments and completing its final review, the following items were addressed by the City Council:

Additional Discussion Items

The Council agreed to fund two additional discussion items that were originally requested by Mayor Ramos at the June 5, 2007 Council meeting.  A holding account of $100,000 for parking enforcement was approved.  Specific use of these funds will be discussed when the overall downtown parking management item is brought back before the Council.  Additionally, $59,004 was included in the budget for an Education Ambassador that not only will educate citizens/businesses with respect to the new smoking ordinance, but also with other new ordinances like the shopping cart ordinance.

Smoothing of Refuse Fund Rate Increases

The proposed budget includes a 9 percent refuse rate increase for FY 2007-08.  This increase would amount to an increase of only $1.81 to the monthly 64 gallon container fee.  Lifeline customer rates will remain unchanged.  The rate increase is recommended to help the Refuse Fund cover its growing operating costs and comply with legal bond coverage requirements.

During the public hearing, Council directed staff to explore the feasibility of �smoothing� the proposed 9 percent refuse rate increase for FY 2007-08.  Staff will look at what can be done to minimize any rate increase while helping bring the Fund back into fiscal health and also enable the fund to comply with other legal requirements and the City�s Fiscal Policies.  Please note that reducing the rate increase to 6% reduces the monthly cost to rate payers by only 60 cents while throwing the fund into a potential deficit.  Staff will provide additional information related to this issue during the adoption of the budget.

RECAP OF DISCUSSION PAPER ITEMS

The following summarizes all the discussion paper items that are included in next year�s budget.

Original Discussion Paper Items

1.     Historic Properties Survey - $50,000 - One-Time

2.     Restoring 3 Previously Frozen Firefighter Positions - $165,168^{[1] -} Recurring

3.     Increased Restroom Maintenance Service in Parks - $100,000 - Recurring

4.     Restoring 2 Previously Frozen Police Officer Positions  - -$216,324 - Recurring

5.     Top to Bottom Review of Police Department - $150,000 - One-Time

6.     Air Quality Element - $60,000 - One-Time

Items Added During Budget Study Sessions / Goal Setting / Public Hearing

7.     Support implementation of sustainability efforts - $300,000 - One Time

8.     Third party traffic review - 250,000 - One Time

9.     PerformArts Endowment Fund - $100,000 - One Time

10.   Expansion of the Tuttle Center shade structure - $63,000 - One Time

11.   Increase in Code Enforcement - $32,000 - Recurring

12.   Communications (Port. Audio System/Town Hall Mtgs.) - $25,000 - One Time

13.   Diversity training for Boards & Commissions - $10,000 - One Time

14.   Pilot oral history program - $10,000 - One Time

15.   Parking Enforcement Holding Account - $100,000 - One-Time

16.   Education �Ambassador� for Ordinance Implementation - $59,004 - One-Time

RECAP OF GENERAL FUND�S FINANCIAL STATUS

After incorporating all the changes recommended by the Council during the Budget Study Sessions, the following summarizes the Proposed General Fund Budget for FY 2007-08.  If adopted as is, the current General Fund budget is balanced with a remaining projected balance of $127,722 (see Attachment A & B for more detail).

The following chart provides a citywide snapshot of the resources and appropriations for FY 2007-08:

CONCLUSION

The adoption of the Budget sets the initial appropriations for the new fiscal year.  For FY 2007-08, total appropriations of $139,693,338 have been balanced against estimated revenue and use of fund balance.  If adopted as is (including the items added by Council), the General Fund budget will be balanced with a projected balance of $127,722 remaining at year�s end.  This year�s General Fund budget is roughly 6% larger than the adopted FY 2006-07 budget.

Due to the combination of the positive economic climate, the General Fund budget is balanced for FY 2007-08.  However, the economy remains somewhat volatile.  Over the next five years, revenues are expected to increase an average of 3.9 percent annually while costs will increase an average of 4.3 percent.  As a result, the budget gap in year 5 (FY 2011-12) is projected to be $2.898 million.  Any additional, unplanned costs, such as subsidies to enterprise funds discussed at the June 12 budget hearing, would exacerbate this situation.  Staff will continue to update the five year financial forecast appropriately and update the Council on a quarterly basis.

RECOMMENDATION:

Adoption of proposed City Council resolutions entitled:

1.      A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR FISCAL YEAR 2007-08, AND MAKING APPROPRIATIONS FOR AMOUNTS BUDGETED.

2.      A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK DETERMINING AND ESTABLISHING THE CITY�S APPROPRIATIONS LIMIT FOR FISCAL YEAR 2007-08.

3.   A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING THE BURBANK FEE RESOLUTION.

4.   Adoption of proposed Redevelopment Agency resolution entitled:

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR FISCAL YEAR 2007-2008.

5.   Adoption of proposed Housing Authority resolution entitled:

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR FISCAL YEAR 2007-2008.

6.   Adoption of proposed Parking Authority resolution entitled:

A RESOLUTION OF THE PARKING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR FISCAL YEAR 2007-2008.

7.   Adoption of proposed Public Financing Authority resolution entitled:

A RESOLUTION OF THE PUBLIC FINANCING AUTHORITY OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR FISCAL YEAR 2007-2008.

8.   Adoption of proposed Youth Endowment Services Fund resolution entitled:

A RESOLUTION OF THE YOUTH ENDOWMENT SERVICES FUND OF THE CITY OF BURBANK ADOPTING THE BUDGET FOR FISCAL YEAR 2007-2008.

Attachments

Attachment A               General Fund Budget Matrix

Attachment B               5-Year General Fund Financial Forecast

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