BACKGROUND:

During the Fiscal Year 2003-04 Budget Adoption at the June 17, 2003 City Council meeting, Council Member Golonski suggested that a discussion amongst the Council and the School Board of the Burbank Unified School District (BUSD) be considered to ascertain the feasibility of the City providing the District with  financial support for the 2003-04  school year.

Due to the fact that the Council and School Board are conducting a joint meeting on July 16, 2003, the Council thought it would be best to have a preliminary discussion so that the Council will have had time to formulate ideas and determine whether or not they are interested in providing financial support to the BUSD.

As a result of the Council discussion on this matter at the June 17 Council meeting, staff was directed to return with an informational report in advance of the July 16 Joint City Council/School Board meeting.  Since the Council will not have a meeting on July 8 due to the 4^th of July Holiday, the 1^st meeting in July was the best meeting to agendize this issue for Council consideration.

ANALYSIS:

The City has always made it a high priority to assist the BUSD.  The Council understands the importance of the public schools as they relate to enhancing the overall quality and desirability of our City.  This partnership with the BUSD has been very successful over the years, and has resulted in tremendous benefit to the community, and especially the children.

At the June 17 meeting, Council Member Golonski suggested that the City consider providing the District with one-time funding that could come from the year end savings that will be available when the 2002-03 fiscal year ends.       

Staff has provided the Council with information that will hopefully assist them in their discussion regarding potential financial assistance to the District.  A prior report which was presented to the Council on November 19, 2002, is included.  This report and its accompanying reports, was the culmination of a discussion the Joint Action Group (two Council Members and two School Board Members) held related to a desire on the City�s part to assist the School District with their budgetary constraints that were to occur in the 2002-03 school year.  The end result was that no money was provided to the District at that time.

In addition, staff has compiled a summary listing of the various partnerships that exist between the BUSD and the City.  Included on this list are former City/Agency financial contributions for District capital projects and programs as well as a description of the on-going/annual programs.  Also, a memorandum outlining more detail regarding the various School District projects funded by Community Development Block Grant (CDBG) Funds is attached.   In addition, the most recent copy of the Joint Use Agreement and its amendment are attached for reference.

Further, the Council requested staff to research what other municipalities have done to partner with their school districts.  A survey of the various strategies was conducted and the research identifies a number of innovative ideas including Santa Monica�s per parcel tax and Laguna Beach�s School Power program, a private/public partnership.  At the time the agenda was printed and the report distributed, the data for the survey was still being compiled.  However, it will be made available to the public and the Council prior to the meeting on Tuesday.

Lastly, a memorandum that was presented to a BUSD Budget Advisory Sub-Committee earlier this year is included.  This memorandum discusses options that the City and BUSD could consider for joint purchasing opportunities as well as operations.

CONCLUSION:

Although the Council is intimately familiar with the financial struggle the City is encountering beginning with the 2003-04 fiscal year and continuing for the next five years or more, it is worth reminding the Council that should they recommend the use of year end savings for assisting the District, staff had already projected the need to use some of the 2002-03 year end savings for the following purposes:

            Compensated Absences Reserve                         $600,000

            Working Capital Reserve                                           543,000

            Employee Recognition Dinner                                    58,980

            Magnolia Park                                                             125,000

            SERPS                                                                               TBD

            Total Projected Known Usage:                                $840,020                                                      

At this point, staff has estimated that an approximate $2,167,000 will be available as year-end savings once the 2002-03 fiscal year is closed.  As part of the Fiscal Year 2003-04 budget process, staff proposed that any budgetary savings greater than the $2,167,000 be set-aside to assist in the balancing of subsequent budgets.

In contemplating the potential financial assistance to the District it is also important for the Council to be cognizant of the fact that staff has included the use of over $1.547 million from the BWP UUT/In-Lieu Set Aside Fund to balance the 2003-04 Budget.  This use of one-time dollars was needed to meet the General Fund�s recurring expenditures, even after an approximate $6.3 million was reduced from the operating 2003-04 General Fund Budget.

Staff would also be remiss if we did not point out that the City still has a variety of outstanding liabilities that have yet to be addressed.  While this is not an exhaustive list, the following are known potential liabilities for the City: the Police Department needs to replace the police records and computer-aided dispatch systems in the very near future at a projected cost of $2 million; the Oracle upgrade/re-implementation as well as other systems upgrades (i.e. payroll, human resources etc.) is projected to be a big expense that will most likely go  beyond what we currently have budgeted; and, there are still two years of payments (approximately $1.4 million) remaining on the Post Retirement Medical Trust Fund.  

Having just completed the 2003-04 budget process, there is no need to remind the Council that the City is facing a challenging five year outlook.  Meeting our budget deficits over these years will cause us to continue finding ways to increase revenues and reduce services and programs.  Moreover, as was necessary for the 2003-04 budget year, the City will no doubt be in a position again next year and over the next few years to consider more employee downsizing through a combination of retirement incentives (SERPS) and severance packages to assist those employees who will be impacted.  There is no easy way to lose personnel in any organization, but the City is firmly committed to being fair and reasonable and doing so with compassion and financial assistance where possible.    

As much as we support our partnership and continually are desirous of doing our part to support the BUSD, now is not a time when we should be considering more financial assistance.  Burbank is having its own financial issues and we are still uncertain about how much the State will take from us and, more importantly, whether or not any reductions to our revenues will be temporary or permanent as has been suggested by the Legislature. 

As we approached the 2003-04 budget, every attempt was made to make minimal impacts to existing programs to avoid harming the service levels desired by Burbank residents.  This philosophy was also extended to our existing partnerships with the schools.  We will maintain our partnerships with BUSD, they are successful and we want them to continue thriving.  There are still opportunities for the District to seek additional financial assistance next year through the YES Fund, PAY Grants, Perform Art Grants and CDBG for those eligible schools.  Although the funding has been reduced in some areas, there will still be dollars available for grants.  In addition, with the era of financial challenges that both the City and the District are facing in future years, this is a good time to explore other joint ventures.  As discussed in attachment 6, there are many projects that the BUSD and City could do together.  Whether it be joint purchasing, consolidation of warehouses, fleet maintenance, etc., there are a number of opportunities available to us to consider.  Directing staff to open the dialogue with the District to begin the creative brainstorming and formulating of plans would enable both agencies to benefit from possibly moving forward with joint ventures.  Many of these potential ventures have the ability to save each agency significant recurring dollars.       

RECOMMENDATION:

It is staffs recommendation that the City Council not provide any further financial assistance to the Burbank Unified School District above and beyond what the City is already committed to doing in partnership with the District for the 2003-04 fiscal year.  Staff is open to and supportive of Council direction to work cooperatively with the BUSD on other possible cost saving ventures.

Attachments:

Attachment 1 - November 19, 2002 City Council Report on JAG Recommendation on BUSD Funding Request

Attachment 2 - Summary Listing of Services/Programs in Partnership with BUSD

Attachment 3 � BUSD CDBG Funding History

Attachment 4 � Joint Use Agreement and its Amendment

Attachment 5 � Survey of Other Municipality School District Partnerships

Attachment 6 � January 2, 2003 Report on Joint Purchasing Ventures with BUSD

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