Council Meeting: 2/25/97           Santa Monica, CA

TO:       Mayor and City Council
          Chairperson and Housing Authority Members
          Chairperson and Parking Authority Members

FROM:     City Staff

SUBJECT:  Recommendation to Conduct FY1996-97 Mid-Year Budget
          Review and Adopt Associated Budget and Fee Changes

Introduction
This report provides a mid-year review of the 1996-97 budget,
recommends technical, personnel and fee changes and reports on
progress on work objectives.

Background
The mid-year budget review is an opportunity to assess the status
of the adopted budget and make necessary course corrections.  In
addition to reviewing projected revenues and expenditures after
six months of operations, staff evaluates progress on
collaborative and departmental objectives.  Revisions to the
adopted budget are recommended based on this analysis and the
availability of the latest information and data.

Discussion
A summary review of all funds is at Exhibit A.  There will be no
significant change in any fund balance as a result of the actions
proposed in this report.  The impact on the General Fund balance
of the recommended budget changes, previously adopted budget
changes and the projected transfer of $3.8 million to augment the 
set-aside for construction of the Public Safety Facility is shown
below.
          $    14.7      -    Audited beginning Fund Balance for
               FY1996-97
               133.3     -    FY1996-97 Estimated Actual Revenue
               (124.4)   -    FY1996-97 Revised Expenditure
               Budget*
               (      4.9)    -    FY1996-97 Revised Net Balance
               Sheet Transfers**
               (      3.8)    -    Projected Transfer to Public
               Safety Facility Construction Reserve
          $    14.9 -    Projected Ending Fund Balance for
               FY1996-97
               ________________
*    Reflects adopted budget for FY1996-97, Council approved
     changes through 12/31/96, changes recommended by this
     report, less reappropriated capital which is financed from
     other designated reserves.
**   Reflects adopted budget for FY1996-97 and changes
     recommended in this report.

 Details of the previously approved budget actions and the mid-year analysis of revenues are contained in Exhibit B.

As is the City's practice, an analysis will be prepared at the
end of the fiscal year to identify changes in any of the fund
balances as well as any final expenditure savings or budget
revisions that are necessary.

Operating Budget Review - Recommended budget transactions are
outlined in Exhibits C, D and E.  Revenue adjustments will more
accurately reflect grant funds the City will receive during the
fiscal year. These revenue changes are necessary so that
corresponding expenditures can be initiated. 

In addition to proposed technical adjustments, a number of
significant expenditure budget changes are recommended: 
      A proposed $125,000 loan from the General Fund to the Pier
     Fund to replace $75,000 of underrealized lease revenue and
     to make a $50,000 loan to the PRC for enhanced Pier
     marketing and facility planning.
     Service improvements by the Big Blue Bus will be facilitated
     by the addition of 15 motor coach operators and associated
     support staff.  Those improvements are outlined in a
     separate item to be considered on this agenda.
     Budget changes are also proposed to strengthen internal
     services to support  important City initiatives.  This
     report recommends the addition of 4 staff positions in
     Personnel and Information Systems, to better support the
     organization's use of technology and to speed the
     recruitment and selection of qualified staff.

Departmental Program Performance Review  - Staff also reviewed
departmental program performance and collaborative objectives. 
With the exception of work objectives listed at Exhibit F, all
collaborative and departmental work objectives and performance
measures are on target. 

Capital Improvement Projects (CIP) Review - A CIP Status report
as of December 31, 1996 accompanies this staff report.  It
presents information on project implementation, financial status,
management responsibility and changes in the scope or cost of
project work authorized.  All projects authorized in the 
FY 1996-97 revised budget are listed, as well as those projects
from prior years which were not completed by June 30, 1996.

Personnel Actions - Included at Exhibit G is a resolution
revising salaries for various positions.  These salary changes
result from an analysis of similar positions in comparable cities
and internal equity factors.  The cost of these changes will be
absorbed in the existing budget.

Also at Exhibit G is a listing of new positions and 
reclassifications which have been reviewed and approved by the
City Manager,  Personnel Director and Personnel Board as well as
reclassifications which have already been approved by Council but
which only need to be incorporated into the FY 1996-97 City
budget at this time.  No appropriation change is required to
implement any of these changes.

Purchases Required to be Reported to Council Pursuant to
Ordinance #1743 - City procurement procedures require competitive
bidding, but also authorize the City Manager to secure necessary
resources on an expedited basis if an emergency arises, or if it
is in the interest of public health and safety.  If the City
Manager exercises this authority, it must be reported to the
Council.  Applicable purchases since July 1, 1996 are listed at
Exhibit I.

Fee Increase for Adult Rides on Carousel - Approval of the
resolution at Exhibit J will implement the recommendation of the
PRC to increase the fee for adult carousel rides from $.50 to
$1.00.  This fee has not changed since 1986, and the increase
will enable the Carousel to be self-supporting.  The $1.00 fee
would still be significantly below adult rides fees for all other
carousels in the general area.  No budget action is necessary
because the increased fee was anticipated when the FY 1996-97
budget was adopted.

Recommendations
It is recommended that the City Council, Housing Authority, and
Parking Authority approve the resolutions at Exhibit H which
recommend the revenue and expenditure budget changes noted in
this report and the attached exhibits.  Staff also recommends
that the City Council adopt the changes in job classifications
and approve the salary resolution contained in Exhibit G, and
approve the fee increase resolution at Exhibit J.

Prepared By:   Susan McCarthy, Assistant City Manager
          Mike Dennis, Director of Finance
          Karen Bancroft, Director of Personnel
          Ralph Bursey, City Treasurer/Revenue Manager
          David Carr, Assistant City Treasurer
          John Karcic, Budget Manager
          Joan Akins, Administrative Services Officer
          Katie Lichtig, Senior Management Analyst


                             EXHIBIT
(Available in the City Clerk's Office)


     A -
FY 1996-97 Revenue and Expenditure Analysis by Fund


     B -
FY 1996-97 Revisions to Adopted Revenue and Expenditure
Budget (7/1/96-12/31/96) and FY 1996-97 Mid-Year
Revenue Analysis


     C -
Proposed Changes to FY 1996-97 Revenue Budget


     D -
Summary of Proposed FY 1996-97 Appropriation
Increases/(Reductions)


     E -
Summary of FY 1996-97 Transfers Requiring City Council
Approval (No Net Budget Impact)


     F -
Exception Report on Work Objectives


     G -
Resolution Containing Recommended Salary Changes for
Certain Positions, and a Listing of Position
Reclassifications and Previously Approved
Reclassifications Requiring Council Approval for
Incorporation into the Budget 


     H -
Budget Resolutions


     I -
Listing of Procurements Required to be Reported
Pursuant to Ordinance #1743


     J -
A Resolution of the City Council of The City of Santa
Monica Revising The Public Ride Fee For The Santa
Monica Pier Carousel