SR - - SECOND STUDY SESSION PROPOSED FY 2014-15 BUDGETAGENDA ITEM
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2 April 22, 2014 Meeting
J
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C`pUN,�, GP
TO: Honorable Mayor and
Members of the City Council
FROM: John W. Sibley,
City Manager
ReviewedNerified B
City Manager
Finance Director
To Be Presented By:
Rik
tto, ACM
Calendar X
C (y Mgr. Reports
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1. SUBJECT
Second Study Session for the Proposed Fiscal Year 2014 -15 Budget
2. SUMMARY
This is the second study session in support of the preparation of the FY 14 -15 budget (FY 15).
This study session is intended to provide an analysis of the projected General Fund revenues and
expenditures for FY 15 and to present the Annual Department Work Plans.
3. ACTION
Receive report and provide policy direction.
4. FISCAL IMPACT
Fiscal impact will be determined with final budget adoption.
5. STRATEGIC PLAN GOALS
2. Be a fiscally healthy community: a) Expend fiscal resources responsibly; b) Analyze future
fiscal needs and potential revenue opportunities and c) Provide appropriate reserves.
4. Provide outstanding public service; b) Provide facilities and services to meet customer
expectations.
6. GENERAL PLAN IMPLEMENTATION
N/A
ITEM f / 1 4/22/14
7. DISCUSSION and BACKGROUND
This is the second study session in support of the preparation of the City's FY 15 budget. This
study session is intended to focus on the following items:
• Providing a status of the General Fund budget for FY 14 and FY 15;
• Providing an analysis of the projected General Fund revenues and expenditures for FY
15; and
• Presenting the annual department work plans.
In addition, this report provides additional information on specific issues as requested by the City
Council at the March 25`" study session. Depending on the feedback received by the City
Council during this study session, it may be necessary to conduct a third study session in May.
Nevertheless, at this point, we are on target to present a proposed FY 15 budget to the City
Council for review and adoption at the June 2014 meeting.
Status of FY 14 General Fund Budget
As the end of FY 14 quickly approaches, FY 14 General Fund revenues are expected to increase
to $93.2 million, 3.4% over budget. Sales tax and property taxes continue to trend upward,
further indicating that the economy is in a slow but steady recovery mode. General Fund
expenditures are on target to close at $92.1 million. Should year -end revenues and expenditures
hold steady, staff expects to end the fiscal year with slightly more than $1.0 million in revenues
over expenditures. The ending General Fund balance for FY 14 is expected to be approximately
$9.0 million
Projected General Fund Revenues for FY 15
Total General Fund revenues for FY 15 are projected to be $95.4 million. This represents an
increase of $2.2 million or 2.4% over the estimated revenue for FY 14. Provided below is a
summary of the General Fund revenue highlights for FY 15.
• Sales Tax is the largest source of General Fund revenue. In FY 15 the City anticipates
receiving $1.9 million more in sales tax revenue than FY 14. This estimated increase is
primarily the result of increases in auto sales, sale of consumer goods and an overall
improved economy. In addition, the performance of The Outlets of Orange is expected to
remain strong as they continue to add stores that enhance the center's position as a
premier shopping destination.
• Property Tax is the second largest source of General Fund revenue and is expected to
be $22.8 million, an increase of $701,000 or 3.2% compared to FY 14 estimates. As
homes will continue to be assessed with annual increases in their property taxes,
property tax revenue is anticipated to grow.
• Licenses and Permits reflect an increase of $101,000, or 2.4% over the FY 14 estimate
during the upcoming fiscal year to $4.3 million. This projected increase from business
licenses and building related permits (building, electrical, mechanical, etc.) is mainly
due to the recovering economy.
• Use of Money and Property is estimated to be approximately $679,000, which is
$45,000 (7.2 %) more than the FY 14 revenue estimate. As interest rates slowly rise, we
expect an increase in investment portfolio earnings.
ITEM 2 4/22/14
• Motor Vehicle in Lieu is anticipated to generate $216,000 or 2% more in revenue in FY
15. As an increase in auto sales are projected to continue in the next fiscal year, motor
vehicle fees are expected to generate an estimated $11.0 million in revenue for FY 15.
Projected General Fund Revenue for FY 15
Other Taxes
_$550,000
0.58%
Property Taxes
$22,768,413
23.87%
It is encouraging that many of the key economic indicators continue to show signs of a rebound
in the national and state -wide economy. Furthermore, our local economy is feeling the effects of
a slow rebound, as illustrated by the fact that our revenues have finally returned to and exceeded
FY 2007 -08 levels of $93.6 million. It is expected that future growth in General Fund revenue
will continue to be modest. For this reason, it is essential that we continue an aggressive
approach to economic development in order to attract and retain major retailers and significant
revenue generators. Maintaining and enhancing our tax base is critical to the City being able to
provide the highest level of services and programs to our residents and businesses.
Estimated General Fund Expenditures for FY 15
The City has relied on its conservative spending practices to weather the economic downturn for
the past six years. This was aided by the fact that the City quickly responded to the pending
economic downturn early on by implementing many budget reduction measures over the past six
years. These reductions have included significant departmental operating budget reductions,
underfunding internal service fund allocations, freezing vacant positions, and implementing a 5%
furlough for all non - safety and management employees. While the 5% furlough will end
effective July 1, 2014, the City continues to realize a substantial savings by holding a tight
control on operating expenses and from a continuation of the policy to freeze vacant positions.
Reaching a tipping point in our ability to deliver services, in FY 13 we began to fill certain
critical positions that became vacant. With the proposed FY 15 budget, it is estimated that the
City will have approximately 43 full -time frozen positions saving over $4.9 million annually. As
we progress through this budget process and into next fiscal year, we will continue to evaluate
ITEM 3 4/22/14
Sales Tax
Transient
Occupancy Tax
$39,270,000
Misc. Revenues
$3,751,000
41.18%
$776,895
3.93%
0.81%
Use of Money &
Property $679,248
0.71%
Revenue from Other
Agencies $1,163,767
1.22%
Charges to Other Funds
$2,100,912
2.20%
Franchises
- '}
$2,568,976
2.70%
Fees for Services
$4,216,121
4.42%
Fines & Forfeitures
$2,277,500
Licenses & Permits
Motor Vehicle In -Lieu
2.39%
$4,256,700
$10,992,058
4.46%
11.53%
Other Taxes
_$550,000
0.58%
Property Taxes
$22,768,413
23.87%
It is encouraging that many of the key economic indicators continue to show signs of a rebound
in the national and state -wide economy. Furthermore, our local economy is feeling the effects of
a slow rebound, as illustrated by the fact that our revenues have finally returned to and exceeded
FY 2007 -08 levels of $93.6 million. It is expected that future growth in General Fund revenue
will continue to be modest. For this reason, it is essential that we continue an aggressive
approach to economic development in order to attract and retain major retailers and significant
revenue generators. Maintaining and enhancing our tax base is critical to the City being able to
provide the highest level of services and programs to our residents and businesses.
Estimated General Fund Expenditures for FY 15
The City has relied on its conservative spending practices to weather the economic downturn for
the past six years. This was aided by the fact that the City quickly responded to the pending
economic downturn early on by implementing many budget reduction measures over the past six
years. These reductions have included significant departmental operating budget reductions,
underfunding internal service fund allocations, freezing vacant positions, and implementing a 5%
furlough for all non - safety and management employees. While the 5% furlough will end
effective July 1, 2014, the City continues to realize a substantial savings by holding a tight
control on operating expenses and from a continuation of the policy to freeze vacant positions.
Reaching a tipping point in our ability to deliver services, in FY 13 we began to fill certain
critical positions that became vacant. With the proposed FY 15 budget, it is estimated that the
City will have approximately 43 full -time frozen positions saving over $4.9 million annually. As
we progress through this budget process and into next fiscal year, we will continue to evaluate
ITEM 3 4/22/14
evaluate vacant and frozen positions. In addition, over the past two years we have restructured
labor group agreements lowering labor costs to further aid in reducing our structural deficit.
While we had to deal with significant losses in General Fund revenues (approximately $15
million between FY 08 and FY 10), with the support of our staff and the leadership of the City
Council we did a good job of dealing effectively with the loss of revenue while still providing
essential services.
The current projected expenditures for FY 15 are $95.2 million. This amount represents a 6.0%
increase over adopted budgeted expenditures for FY 14. This increase is primarily due to the
contracted salary increases, the end of the furlough program, the absorption of previously funded
Successor Agency costs and the considerable increase in employee retirement (PERS) costs. The
increase in the projected expenditures is due to the following conditions:
1. 3% Salary Increase and 5% Furlough
As mentioned in the first study session on March 25` ", the City Council approved a 3%
across the board salary increase for most bargaining groups effective July 1, 2014 which
results in an increase to the General Fund of $635,000 for FY 15. Further, the proposed
budget reflects the elimination of the 5% furlough program for non - safety and
management employees, also effective July 1, 2014. While the end of the furlough
means increased City Hall public hours, the results in a $1.1 million increase to the
General Fund (total $1.7 million).
2. Successor Agency Costs
The proposed FY 15 budget reflects transfer of additional expenses previously funded by
the Successor Agency to the General Fund. These costs include the reallocation of staff
funding in the amount of $222,000 due to determinations by the State Department of
Finance (DOF) and maintenance costs of $278,000 associated with certain properties that
have been transferred from the Successor Agency to the City (total $500,000).
3. PERS Cost Increase
The FY 15 proposed budget includes a PERS costs increase of $2.2 million. As part of
their plan to fully fund all retirement plans over the next 30 years, PERS established a
plan to dramatically increase rates over a five -year period, beginning FY 15. In addition,
changes in actuarial assumptions based on life expectancy have also increased retirement
costs for all agencies.
4. Sales Tax Cost Sharing
As part of ongoing economic development strategies, the City has entered into sales tax
cost sharing agreements with several car dealerships in an attempt to attract and retain
them in Orange. Staff is estimating a FY 15 total cost for the tax sharing agreements of
$350,000 based on the recent agreements with Stadium Nissan ($60,000) and
Volkswagon of Orange ($55,000) as well as an on -going agreement with Ford of Orange
($235,000).
5. Department Personnel Restructuring
In our continuing efforts to assess how we are delivering our services, some departments
are proposing personnel restructuring for operational effectiveness and efficiency.
Furthermore, through this budget process it has been determined that there are certain
positions that are working "out of class" and require an adjustment in classification. All
total, these proposed changes result in a General Fund impact of $191,300. These
proposals include Community Services (reclassification of various positions),
ITEM 4 4/22/14
Finance (reclassification of a Warehouse /Inventory Specialist to a Buyer and salary
adjustments for certain positions), and Library (unfreezing of one part-time Library
Assistant position and funding for part-time help).
6. Animal Control
The Control contract with the County will be increasing by $84,000 (15 %) in FY
15. The City had previously used carryover money to cover cost increases in the past
years however this option is no longer available. Therefore the budgeted increase
between FY 14 and FY 15 is $200,500.
7. Contract Increases
For several years, staff has done an outstanding job of managing and maintaining
contracts and the cost for miscellaneous services with little to no increases. This prudent
fiscal responsibility continues in FY 15 with only a few cost increases which include
custodial services, electronic haz -mat reporting, human resources and fire support
services ($87,900).
8. Internal Service Funding
The proposed budget reflects a status quo of $6.5 million in the level of Internal Service
Fund allocations from the General Fund. The largest allocation in FY 15 will be to the
Workers' Compensation Fund in the amount of $2.9 million. The increase in the
allocation to Workers' Compensation is a means to help solidify this fund as allocations
in past years were not sufficient to maintain increased costs. The projected fund balance
by the end of FY 15 is $338,639. However, this amount does not include the reserve for
potential workers' compensation claims totaling over $7.3 million. We are working to
reduce this reserve as we strive to close out a number of claims.
The Employee Accrued Liability Fund is estimated to begin FY 15 with a $3.5 million,
fund balance which includes $3.0 million transferred into this fund in prior years to help
offset future increases in PERS retirement costs. An additional $426,000 in allocations
from the General Fund is proposed for FY 15. This fund also covers costs associated
with payouts to retiring employees. It is proposed that with the adoption of the FY 15
budget, an additional $1.0 million be transferred into this fund to further offset future
PERS costs.
The Equipment Maintenance Fund has been underfunded in recent years and as such, the
fund balance has been reduced substantially. In FY 15, the proposed budget includes
$1.6 million in allocations resulting in a 5.3% increase over FY 14.
Due to the continuation of the slow growth in revenues we are still not able to fund the internal
service funds at a desired level. It is expected that as with the prior year's budget, we will be
using the unreserved General Fund balance to transfer funds into specific internal service fund
accounts to provide funding to these cost centers. As such, it is recommended that we transfer
$2.1 million into the Equipment Replacement Fund, $1.0 million into the Employee Accrued
Liability Fund, $250,000 into the Liability Fund and $850,000 into the Computer Equipment
Replacement Fund. These allocations and other adjustments detailed later in this report will
reduce our unallocated or year -end General Fund balance from a projected $9.0 million to a $1.9
million.
ITEM 5 4/22/14
In order to better provide an overall view of the City's General Fund budget the following is a
more detailed picture of the FY 15 proposed budget compared to the FY 14 adopted budget, by
department. FY 15 increases are primarily compensation related due to the 3% salary increase,
elimination of the 5% furlough, PERS cost increases, and absorption of previously funded
Successor Agency staff costs disallowed by the California State Department of Finance
(affecting City Attorney, City Manager, Community Development, Finance and Public Works).
Another variance to the Non - Departmental and Public Works budgets includes the Gas Tax
Exchange Program with OCTA which sunset in FY 14. As a result, the $1.4 million expense
moved from Non - Departmental to the Public Works Department. The Gas Tax Exchange
Program between the City and OCTA had been in existence for approximately 20 years. The
program earmarked General Fund dollars for specific roadway maintenance and operation
activities such as pot hole repair and electricity for street lights, but was funded through our Non -
Departmental program rather than the Public Works Department budget. With the
discontinuation of the program, those expenses are now reflected in the Public Works
Department budget.
General Fund Expenditures — Comparison of FY 14 and FY 15
Department
FY 14 Adopted
FY 15 Proposed
% Inc /(Dec)
City Attorney
$801,924
$960,777
19.8%
City Clerk
720,191
769,915
6.9%
City Council
44,949
44,965
0%
City Manager
897,363
1,201,853
33.9%
City Treasurer
183,818
106,697
-4.2%
Community Development
3,372,614
3,787,977
12.3%
Community Services
7,048,197
7,940,596
12.7%
Finance
2,582,054
3,006,313
16.4%
Fire
23,853,726
24,471,572
2.6%
Human Resources
1,192,754
1,315,939
10.3%
Library
3,868,082
4,232,689
9.4%
Non - Departmental
2,770,634
535,313
-80.7%
Police
37,173,957
39,341,359
5.8%
Public Works
5,342,795
7,488,463
40.2%
Totals:
$89,853,058
$95,204,428
6.0%
Summarizing the financial picture, the current proposed FY 15 expenditure budget is $95.2
million. With the projected FY 15 revenue amount projected to be at $95.4 million, the General
Fund budget will be balanced and our revenues are expected to exceed expenditures for the third
consecutive year. This continues to be a significant milestone and something that the City
Council and staff can be very proud of. We truly have weathered the economic storm and
although we have a long way to go to get to a solid fiscal position, we are able to balance the
budget without the use of any of our catastrophic reserves and we are still maintaining an
organization committed to quality customer service for our residents and businesses.
Follow -Up from the March 25 Study Session
At the March 25`" budget study session, Council directed staff to return with additional
information on specific items. The following is a list of those items with the information
requested:
ITEM 6 4/22/14
Infrastructure Needs
During the March 25 study session, an inquiry was made related to identifying future
infrastructure needs and associated funding. At that meeting, staff indicated that the two
most underfunded infrastructure needs are the City's sewer infrastructure and City
facilities. Specific to our sewer infrastructure, a sewer Master Plan Update was
completed in August 2012 and adopted by the City Council on November 13, 2012. The
Sewer Master Plan Update included an inventory and assessment of the City's existing
sewer system. The assessment included a review of existing conditions, analysis of
existing and ultimate sewer capacity, identification of future CIP projects needed to
address existing and projected capacity deficiencies, and development of fees for
replacement of damaged and aging sewer lines as well as capacity upgrades. The Sewer
Master Plan identified approximately $64 million in costs for replacing aging sewer
mains and performing pipeline capacity improvements. Funding is yet to be identified to
effectively address the estimated $64 million needed to provide the improvements.
Currently, there are two revenue sources that fund sewer CIP construction. One source is
frontage fees collected from in -fill development projects with the average annual revenue
less than $10,000 per year. The other source is sewer maintenance fees as part of the
Sanitation Service Rate that generates approximately $400,000 per year for CIP projects.
In recent years, most of these funds have been used to replace aging and damaged sewer
pipes in various locations Citywide and is significantly insufficient to address the long-
term sewer maintenance needs. The City Sanitation Service Rate is structured to include
the following components: Sewer Maintenance, Street Tree Maintenance, Storm Water
Management and Environmental Compliance, and Street Sweeping.
Specific to future City facility needs, the Public Works Department currently has a CIP
project to conduct a Facilities Condition Assessment so the City can fully understand the
condition and value of all City building and facility assets, accurately estimate funding
needs, and defined funding priorities. As many City buildings are 40 to 50 years old
including City Hall and several fire stations, it is essential that we identify future funding
needs so that the City is able to pro - actively manage City facilities. It should be noted
that General Funds are likely the only funding source for facility upkeep. To this end, the
City Council has set aside $4.5 million into the Capital Infrastructure reserve fund (Fund
500) during prior budget adoptions for undefined future infrastructure needs. In FY 15, it
is proposed that the following infrastructure needs be funded from the Fund 500 fund
balance: Civic Center HVAC system - $100,000, Fire Headquarters and Senior Center
Roof Coating - $90,000, Parking Lot Maintenance - $20,000 and Fiber Optic
Communication Installation - $25,000.
2. Median Landscaping and Maintenance Cost
During the last study session there was an inquiry regarding the deteriorated median
landscaping on East Katella. The majority of landscaped areas within the Katella Avenue
medians between SR -55 and Wanda are under pine trees which hinder plant growth. As
such, an option is to install stamped concrete with additional limited landscaping which
will cost approximately $350,000. Currently, there is no funding identified for this
potential project. Should the City Council wish to add this project to the CIP for FY 15,
General Fund dollars from the Capital Infrastructure reserve fund will need to be
allocated. It should be noted that the current landscape maintenance cost for that set of
ITEM 7 4/22/14
medians is approximately $2,000 per year. With additional landscaping, the cost will
likely be increased to $3,000 per year.
3. Lincoln Avenue Lighting under the SR -55 Overpass
Currently there is no sidewalk lighting under the Lincoln Ave. /SR -55 overpass. The total
estimated cost to install lighting under the SR -55 overpass is $20,000. The proposed
work will extend the electrical conduit from the existing lights in the deck of the overpass
to the sidewalk area. An encroachment permit from Caltrans, which usually takes
between three to six months, will be necessary. Should the City Council wish to add this
project to the CIP for FY 15, General Fund dollars from the Capital Infrastructure reserve
fund will need to be allocated.
4. Succession Planning
At the last study session, the City Council inquired about succession planning and how
we are addressing the development of leaders for the future. A big part of succession
planning is having people in responsible mid -level positions who we can look to as future
leaders when there are changes at positions above them. Unfortunately, many of those
positions were frozen or eliminated as a result of the recession and the necessity that we
right size the organization to insure that we could adopt balanced budgets. Hopefully, the
current economic trends will continue to improve and as they do, we will be able to add
back some of these positions which are necessary for succession planning. To that end,
we will be preparing a staff report following the adoption of the budget that will detail
some of these critical vacancies and the revenues required to reinstate them in an
affordable and responsible manner. That said, we are doing a great deal with the
resources we have to develop our people for responsible positions in our organization.
We have committed to several programs that we think are preparing the next generation
of leaders. These efforts include our award winning TEAM Orange, the Orange
Leadership Academy and the Orange Chapter of the National Management Association
as well as training and tuition reimbursement programs that are critical in preparing our
staff for the next step in their careers, whether it's in Orange or for another organization.
The success of this effort is illustrated by the fact that most of our senior level vacancies
have been filled with internal staff. However, sometimes an internal selection is not
possible and an outside recruitment is necessary. While an internal selection is preferred
in that our staff members have already been trained on the "Orange Way" of delivering
excellent service to our residents, businesses and visitors, an external selection can bring
fresh ideas and new positive approaches to our organization. Although we have clearly
done a great deal to work with what we have, we need to continually assess how to
improve our succession planning efforts to ensure that we are doing all we can to provide
the optimal level of City operations.
Estimated General Fund Balance for FY 15
The projected beginning unreserved fund balance for the General Fund for FY 15 will be $9.0
million. As we are projecting a FY 15 budget in which revenues will be exceeding expenditures,
the unreserved fund balance for the General Fund for FY 15 is estimated at $9.2 million. Of the
unreserved fund balance, staff will be recommending the transfer of $7.2 million to several
internal service funds as well as a new Business Investment Fund to provide future funding for
attracting new businesses to the city. The targeted funds include the Equipment Replacement
Fund, Information Technology Fund, Liability Fund, Employee Accrued Liability Fund and a
ITEM 8 4/22/14
new Business Investment Fund. Following these transfers, the estimated ending unreserved fund
balance for the General Fund for FY 15 will be $1.9 million. It should be noted that the City
continues to maintain a separate Catastrophic Reserve of $18.1 million, which is over 19% of the
General Fund budget.
Estimated Available General Fund Balance
Unreserved Fund Balance Available @ 6/30/14
FY 08
$ 9,010,525
FY 15 Estimated Revenues
95,371,590
FY 12
FY 15 Estimated Expenditures
(95,204,428)
FY 15
Excess Revenues over Expenditures
991,100
167,162
Unreserved Fund Balance Available @ 6/30/15
782,877
$ 9,177,687
Transfers Out
801,924
960,777
Transfer to Equipment Replacement Fund
(2,145,409)
718,821
Transfer to Information Technology Fund
(850,000)
456,887
Transfer to Liability Fund
(250,000)
769,915
Transfer to Employee Accrued Liab. Fund
(1,000,000)
195,644
Transfer to Business Investment Fund
(3,000,000)
134,336
Total Transfers Out
44,949
(7,245.409)
Unreserved Fund Balance Available @ 6/30115
1,052,675
1,932,278
General Fund Catastrophic Reserve
822,661
18,067,960
Est. Reserved & Unreserved General Fund Balance @ 6/30/15
$20,000,238
As a point of historical reference, the following is a year -by -year comparison of General Fund
adopted budget expenditures from FY 08 through FY 15. The information listed below also
reflects the City's immediate response to the economic recession by implementing across the
board reductions to better manage the City's resources.
General Fund Expenditure - Eight Year Look
Dept
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY 14
FY 15
Attorney
991,100
1,029,745
908,872
782,877
699,777
685,309
801,924
960,777
Clerk
621,268
718,821
611,972
576,569
456,887
736,440
720,191
769,915
Council
208,258
195,644
165,119
142,824
134,336
124,820
44,949
44,965
City Mgr
1,052,675
1,030,853
950,467
822,661
934,632
1,020,765
897,363
1,201,853
Treasurer
92,213
101,616
76,335
74,036
159,776
177,405
183,818
106,697
Comm Dev
3,861,342
3,866,238
3,570,256
3,428,346
3,302,791
3,334,252
3,372,614
3,787,977
Comm Svc
6,688,307
7,128,250
6,812,397
6,348,970
6,586,762
6,735,719
7,048,197
7,940,596
Finance
2,723,660
2,886,182
2,856,235
2,656,773
2,418,273
2,455,709
2,582,054
3,006,313
Fire
22,956,971
23,295,056
22,537,996
22,609,802
22,849,981
23,152,737
23,853,726
24,471,572
HR
1,293,993
1,343,012
1,241,364
1,183,332
1,123,477
1,189,048
1,192,754
1,315,939
Library
4,625,240
4,734,062
4,126,492
3,914,441
3,780,501
3,871,433
3,868,082
4,232,689
Non -Dept
4,022,113
1,919,289
2,805,231
2,906,216
2,749,834
2,692,963
2,770,634
535,313
Police
37,145,977
37,978,849
35,505,589
35,779,442
36,321,561
36,950,560
37,173,957
39,341,359
PW
5,787,675
6,064,421
5,331,552
4,797,100
5,005,212
5,325,428
5,342,795
7,488,463
Totals
92,370,792
92,292,038
87,499,897
86,023,389
86,523,800
88,452,588
89,853,058
95,204,428
Annual Department Work Plans
City departments have prepared Annual Department Work Plans that are consistent with the City
Council's goals and vision in ensuring the most effective use of City resources by focusing on
ITEM 9 4/22/14
key priorities. Attached to this report are the FY 15 Annual Department Work Plans submitted
for your review. At the study session, the Department Heads will be highlighting their top
priorities for FY 15
Conclusion
The recession and proceeding recovery has required our entire organization to focus its talents on
balancing the budget while preserving core services. Our city team has worked hard and made
sacrifices during the past six years with the common goal of providing excellent services to our
residents, businesses and visitors while at the same time dealing with diminishing resources.
Their hard work is reflected in the fact that Orange has one of the lowest employees per 1,000
residents rate when compared to other full- service cities in the region. In 1990, when the City
had 790 full -time employees, we had 6.7 full -time employees per 1,000 residents. Today, we are
down to less than 715 funded positions, resulting in a rate of 5.2 full -time employees per 1,000
residents. Furthermore, the City of Orange continues to have among the lowest water rates, trash
rates, and sanitation rates in the county and our business license and development related fees are
also among the lowest. The community should feel confident that in addition to receiving
excellent services from our staff, they are also receiving extremely efficient and cost effective
services as well.
Six years ago, we employed a strategy of reducing expenditures to close the gap between
revenue losses and required budgetary expenditures. In each of the six years we closed that gap
as close as we could and then the City Council authorized the use of unallocated fund balance
available to close the gap and adopt a budget. That strategy worked, as we were able to close the
funding gap a year earlier than expected and are presenting a balanced budget for the third
consecutive year. As we prepare for the completion of the FY 15 budget, we will continue to
monitor and refine our budget projections and look forward to presenting a balanced budget in
June.
8. ATTACHMENTS
• Annual Department Work Plans document
ITEM 10 4/22/14