City Council, Housing Authority, and Parking Authority Report
City Council Meeting: June 23, 2015
Agenda Item: 9-A
To: Mayor and City Council
Chairperson and Housing Authority Members
Chairperson and Parking Authority Members
From: Gigi Decavalles-Hughes, Director of Finance
Susan Cline, Interim Director of Public Works
Donna Peter, Director of Human Resources
Subject: Adoption of the First Year and Approval of the Second Year of the Fiscal Year (FY) 2015-17 Biennial Budget (including the Second Year of the FY 2014-16 Biennial Capital Improvement Program Budget)
Staff recommends that the City Council, Housing Authority and Parking Authority:
1. Adopt a Resolution of the City Council of the City of Santa Monica adopting the first year and approving the second year of the Fiscal Year 2015-17 Biennial Budget and adopting the second year of the Fiscal Year 2014-16 Biennial Capital Improvement Program Budget at Attachment A1, as amended by Attachment B;
2. Adopt a Resolution of the Housing Authority of the City of Santa Monica adopting the first year and approving the second year of the Fiscal Year 2015-17 Biennial Budget and adopting the second year of the Fiscal Year 2014-16 Biennial Capital Improvement Program Budget at Attachment A2, as amended by Attachment B; and
3. Adopt a Resolution of the Parking Authority of the City of Santa Monica adopting the first year and approving the second year of the Fiscal Year 2015-17 Biennial Budget and adopting the second year of the Fiscal Year 2014-16 Biennial Capital Improvement Program Budget at Attachment A3, as amended by Attachment B.
Staff also recommends that the City Council:
1. Adopt a Resolution of the City of Santa Monica revising portions of the City’s schedule of various permit and user fees and charges in the Planning and Community Development, Public Works, Police, Fire, Records and Election Services, Finance, Community and Cultural Services and Housing and Economic Development Departments, in the City Manager’s Office and for the Santa Monica Public Library, and establishing certain permit and user fees and charges in the Planning and Community Development, Public Works, Records and Election Services and Community and Cultural Services Departments (Attachment C1);
2. Adopt a Resolution of the City of Santa Monica setting forth the administrative citation schedule of fines for certain violations of the Santa Monica Municipal Code, setting civil penalties for parking violations and for the late payment of penalties, setting fines for Police and Fire Department responses to excessive false fire alarms, and setting fines for the Santa Monica Public Library (Attachment C3);
3. Adopt a Resolution of the City of Santa Monica establishing parking rates and permit fees for all City parking facilities and resources (Attachment C4);
4. Adopt a Resolution of the City of Santa Monica establishing rental and membership rates for the Breeze Bike Share System (Attachment C5);
5. Adopt a Resolution of the City of Santa Monica establishing new classifications and adopting salary rates for various listed positions (Attachment D1) and approve the position and classification changes (Attachment D2);
6. Adopt a Resolution of the City of Santa Monica establishing the Gann appropriations limit for FY 2015-16 (Attachment E);
7. Adopt fiscal policies included in the FY 2015-17 Proposed Biennial Budget;
8. Approve the Final Proposed FY 2015-19 Human Services Grants Program (HSGP) (Attachment F1) and the FY 2015-19 Organizational Support Program (OSP) Grants for Arts and Culture Nonprofits (Attachment F2);
9. Authorize the City Manager to negotiate and execute contracts for grantees of the HSGP and OSP, and grant parking permits to HSGP organizations providing outreach and in-home services in Santa Monica, as shown in Attachments F1 and F2;
10. Authorize the City Manager to negotiate and execute lease agreements with human service organizations using City facilities to provide social services under the HSGP, as shown in Attachment F1;
11. Accept Federal Supportive Housing Program (SHP) Renewal Grant funds, now known as Continuum of Care (CoC) funds, from the Los Angeles Homeless Services Authority (LAHSA) in the amount of $389,215 for Coordinated Case Management; and
12. Accept Federal Supportive Housing Program (SHP) Renewal Grant funds from the U.S. Department of Housing and Urban Development (HUD) in the amount of $446,822 for the Serial Inebriate Program.
On January 27, 2015, Council reviewed and commented on the FY 2015-20 Five‑Year Financial Forecast and directed staff to develop a fiscally sustainable budget based on a controlled spending plan. Baseline elements include limiting the growth of total compensation costs, maintaining healthy reserves, and adjusting operations to ensure that the City has the financial ability to manage changes and challenges in the community.
During two budget study sessions, held on May 27 and 28, staff presented the May 2015 Financial Status Update for the General Fund for Fiscal Years 2015-20, as well as the FY 2015‑17 Proposed Biennial Budget and Capital Improvement Program Budget for FY 2015‑16.
The proposed two-year budget is balanced, with resources dedicated to strengthening municipal services, including public safety, water conservation, mobility and planning efforts, affordable housing, human services, and a number of initiatives to increase enforcement of administrative laws. The Proposed Biennial Budget for the City of Santa Monica has been revised from the document presented to the public on May 18, 2015 to reflect final changes based on Council feedback and new information received. The Proposed Budget as revised is $564.4 million in FY 2015-16 and $614.1 million in FY 2016-17.
The May 27 and 28 Budget Study Sessions provided an opportunity for Councilmembers to ensure the Proposed Budget meets community needs. During the study sessions, Councilmembers directed staff to consider incorporating various changes to the proposed operating and capital budgets, and to provide additional information on certain items in time for the budget adoption public hearing on June 23, 2015. Requested changes related to strategies to enhance access to housing and services and Safe Routes to School are described below and included in the list of proposed final changes shown in Attachment B. Additional information on the Pico Youth and Family Center and the Lincoln Middle School field is included in Attachment H; staff seeks direction from Council on these items.
Strategies to Enhance Access to Housing and Services
At the May 28 budget study session, Council directed staff to analyze and propose possible strategies to better connect low-income residents with affordable housing and public benefits offered through Los Angeles County. The City of Santa Monica has long‑standing policies that support low-income residents and workers and has significantly invested in developing an infrastructure of supportive services and housing resources that promote wellbeing, housing stability, economic vitality, and self‑sufficiency. However, in addition to these efforts, more can be done to strengthen the safety net of services and leverage regional resources. Further, the imbalance of jobs and housing in Santa Monica has been a longstanding policy concern for the City. Therefore, City staff is working to ensure that the housing and human service needs of vulnerable Santa Monica residents are met and is looking for strategies to improve access to affordable housing for Santa Monica’s low-income workforce. These strategies include enhanced assistance in applying for affordable housing, secure employment with livable wages and growth opportunities, and making sure that all eligible residents have access to county government benefits.
In order to promote these strategies, staff recommends the following:
· Support the Hospitality Training Academy’s request for an additional $56,832 annually for a two-year pilot project to identify and reach as many Santa Monica residents as possible for the HTA ‘local hire’ project. HTA will undertake door-to-door canvassing and other assertive outreach approaches to identify current residents who are under or un-employed and might be interested in existing and new hospitality industry jobs. HTA will track progress and develop a better understanding of the needs and barriers of low-income Santa Monica residents. This pilot will assist residents in accessing local union jobs as well as increase housing stability and affordability by placing eligible residents into affordable housing and connecting them to county benefits. City staff will work with HTA to assess progress and outcomes and align this outreach effort with other providers and institutions in the Santa Monica Cradle to Career network. Given that staff’s current funding recommendations exhaust the entire Human Services Grant budget, staff recommends the two-year pilot program be funded from General Fund reserves.
· City staff (CCS/Human Services) will work to establish a partnership with the Los Angeles County Department of Public Social Services (DPSS) to provide direct access within City boundaries to public benefits information and assistance for low-income Santa Monica residents. Services may be based at a local non-profit agency and/or at a City facility such as Virginia Avenue Park. Staff has made contact with senior management at DPSS to begin planning for this enhanced outreach effort.
· One FTE, limited-term Housing Specialist in the Housing and Economic Development Department is included in the Proposed Budget. The limited-term position would enable multiple housing specialists within the Housing and Economic Development Department to enhance efforts related to outreach and communication with Santa Monica residents and workers who are in need of affordable housing. These efforts would be coordinated with local partners such as religious/faith institutions, schools, labor organizations, employers, community groups, and service organizations. In linking people in need with housing resources, it is critical to include professionals that understand the nuances of affordable housing eligibility. The additional resources would also enable staff to experiment with more dynamic and responsive approaches to the housing application process in order to better accommodate changing needs. The approach is proposed as a two-year trial to ascertain its effectiveness in increasing local access to housing resources.
· Re-allocate $100,000 of Council discretionary funds from FY 2013-14 to FY 2015-16 for the purpose of providing a credit enhancement pilot program for qualified residents who would otherwise be unable to access affordable housing resources. Some local residents have expressed concerns about not being able to get placed in housing because of their credit histories. Accepting a prospective tenant with lower credit presents a risk to for-profit and non-profit property owners, as the tenants could be perceived to be more likely to miss rent payments. Missed rent payments could cause significant hardships, particularly for properties that operate with thin margins, as is often the case with affordable housing.
Staff proposes to provide a credit guarantee for a limited number of Santa Monica households who are in need and would otherwise qualify for affordable housing resources. The credit guarantee would be based on an agreement between the City and the property owner. Potential beneficiaries could include households applying for deed-restricted affordable housing in non-profit or for-profit properties, as well as holders of housing vouchers who seek housing in non-profit or for-profit properties. As part of the FY 2013-14 budget, Council allocated $100,000 of discretionary funds that could be used in the event HUD reduced funding for housing vouchers so severely that existing voucher-holders would have to be dropped from the program. Staff has not needed to dip into the fund over the past two years. As a result, staff recommends that the funds be reallocated for the credit enhancement pilot program. If Council agrees with the recommendation, staff would return with proposed guidelines for the administration of the program.
· CCS/Human Services staff seeks to develop a standardized data collection and reporting system that would allow for the tracking of outcomes across programs in a uniform way, improving program monitoring and creating an increased level of accountability. Such a system would allow staff to measure achievement and the public benefit of services. As per staff’s May 27, 2015 report to Council, the City has identified a consultant to conduct a data needs assessment, scheduled to begin in Summer 2015. Staff will return by mid-year with an update on the project, including preliminary recommendations and options for centralizing data collection and management across all HSGP programs.
Safe Routes to School
At the May 27 budget study session, Council directed staff to pursue on-going support for a Safe Routes to School (SRTS) program. SRTS has been a priority for the City of Santa Monica as a nationally-recognized program that increases student safety, walking and biking, and physical activity/health through encouragement programs, education, enforcement and infrastructure. The bi-annual Bike It Walk It days started by the Samohi Solar Alliance in 2007 have been the core on-going component of SRTS in Santa Monica.
Council allocated $67,771 in FY 2014-15 for a part-time SRTS staff person, and increased classes, events and encouragement efforts. The dedicated staffing enabled robust and collaborative SRTS programming that resulted in the highest participation rates in Bike It Walk It events seen to date, new CREST safety classes, Kidical Mass rides, a Family Bike Hub at the Santa Monica Festival and on-going parent support at school sites. In response to Council requests to continue this program support, PCD has identified salary and departmental savings in FY 2015-17 to fund a 0.5 FTE permanent SRTS staff person, including benefits, and approximately $15,000 in annual program materials. This person would work closely with the School District, as well as with the PTA, parent champions and volunteers to foster the program by continuing the prior year’s efforts and working toward institutionalizing core components. This financial allocation and on-going support would help to increase student safety, increase walking and biking to school, and support safer streets around the City’s neighborhood-based school sites.
Proposed Budget Revisions
Modifications to the Proposed Budget, known as final changes, are based on Council direction, new information and identified omissions. The changes increase the budget by $0.09 million in FY 2015-16 and decrease the budget by $0.5 million in FY 2016-17.
In FY 2015-16, the changes primarily reflect use of reserves and development agreement funds to support the Human Services Grants Program (HSGP), including the enhanced housing outreach described above. In FY 2016‑17, the changes primarily reflect ongoing savings from the issuance of Lease Revenue Refunding Bonds, Series 2015 (Civic Center Parking Project). The Safe Routes to School staffing described above is also included yet has been absorbed within the existing budget.
Revenue changes primarily reflect the incorporation of updated zoning permit and user fees, as discussed in the Fees/Fines/Rates section later in this report, offset by adjustments to decrease initial revenue estimates from the Big Blue Bus (BBB) fare increase. The lower amounts, shown in Attachment B, take into consideration the discounted rates for various fare media. While this decrease is estimated at over $0.9 million in FY 2016-17, the BBB will continue to achieve the required ratio of passenger fare revenue to total revenue, and operating costs not covered by fare revenue will be funded using transportation subsidy funding.
Staff recommends that Council adopt the changes to the FY 2015-16 Proposed Budget, and approve changes to the FY 2016-17 Proposed Budget. With these changes, the budget remains balanced. Changes are itemized in Attachment B.
Council Discretionary Funds
Each year, Council allocates discretionary funds to assist the community in special projects or support important but otherwise unfunded priorities.
Traditionally, Council has supported community partners like the Business Improvement Districts, Santa Monica traditions like the Fourth of July Parade, one-time programs, and community students through science or music grants allowing Santa Monica youth to participate in special events. Allocation of the funds may occur along with Budget Adoption or throughout the year.
Based on the amount of discretionary funds available, staff recommends that, in the initial allocation of funds, Council reserve at least 20% of the total discretionary budget amount for items that come up later in the year. Including unprogrammed FY 2014-15 discretionary/contingency funds and FY 2015-16 discretionary funds, the Council has access to $373,929 in discretionary funds in FY 2015-16.
Per previous Council actions, most City user fees will increase by 3.5% as of July 1, 2015, reflecting the projected FY 2015-16 increase in total City compensation, which includes salary, healthcare, retirement, and workers’ compensation costs. In addition to the 3.5% increase to fees, some minor changes are proposed to other portions of the City’s master fee, master fine, and parking rate schedules. New fees are also proposed for the new bike share program. Pier Carousel fees, as well as Fire Department fees for Advanced Life Support Assessment and Code-3 response, which were previously set by separate resolution, are being incorporated into the City’s master fee schedule. Cemetery and Airport fees, which were also previously set by separate resolution, are being revised and incorporated into the City’s master fee schedule. Finally, community room fees for Reed and Euclid Parks had been inadvertently omitted from the Master Fee listing.
Attachment C1 is the resolution listing the proposed fee schedule. The highlighted portions of the resolution indicate revisions that deviate from the 3.5% increase. Attachment C2 is the City’s master user fee schedule incorporating the changes proposed here. Attachment C3 is the proposed resolution revising the master fine schedule. Attachment C4 is the proposed resolution revising the parking rate schedule. Attachment C5 is a proposed resolution implementing fees for the new bike share program.
Changes in addition to the 3.5% increase, the consolidation of separate fee resolutions, the implementation of the new bike share program fees, and minor administrative adjustments to fee, fine, and parking rate schedules are summarized below. Any revenue impact from all changes is included in the proposed FY 2015-17 Budget.
Planning and Community Development: On May 12, 2015, Council adopted Resolution No. 10879 (CCS) setting various zoning related permit and user fees in association with the zoning ordinance update. These fees will become effective July 13, 2015, or upon effectiveness of the Zoning Ordinance Update, whichever is later. These fees are being incorporated into the City’s master fee resolution. Staff also proposes two new fees to recover certain parking-related staff costs related to the event permit process, both of which were studied at the same time as the fees adopted under Resolution No. 10879. In addition, staff is proposing certain necessary administrative corrections to the current parking rate resolution (10860 CCS).
Staff is seeking to increase certain fines to assist with discouraging specific illegal activities that continue to persist even with current enforcement efforts, including vending, prohibited signs, leaf blowers, and excessive noise. The proposed changes are increasing the fines for code violations related to vending and prohibited signs from $75 to $250, and for leaf blower restrictions, exterior noise standards, excessive vibration, and construction hours/noise from $250 to $500 per violation.
Cemetery: In addition to incorporating all Cemetery fees into the master fee resolution, new fees are proposed in relation to development of a green burial program and to recover the costs of certain services for which fees are not currently charged.
Airport: In addition to incorporating Airport fees into the master fee resolution, increases are proposed to bring certain charges to fair market value. In addition, a separate tie down fee is proposed for multi-engine space aircraft over 12,500 lbs.
Records and Election Services: A new fee is proposed to cover the cost of overnight document delivery service which consists of a pass through of the City’s actual cost of sending documents overnight through a delivery service.
Community and Cultural Services: Staff is proposing a new fee for replacement of Activity Passport and Employee Fitness cards. As per Council direction, staff also proposes new permit fees and charges for youth group beach/water activity for groups of more than twenty children seventeen years and younger.
Library: Staff proposes establishment of a reduced fee for bulk purchases of non-resident library cards for students.
As part of the budget process, proposed employee classification and compensation changes were reviewed by the Human Resources Department and the City Manager’s Office. The resulting classification and salary changes and position list are presented in Attachments D1 and D2.
Adopting the resolutions in Attachments A1-A3 would:
1. Adopt the FY 2015-16 and approve the FY 2016-17 budget revenues at the account level, with operating expenditure appropriations for the Salaries and Wages, and Supplies and Expenses (including Capital Outlay) major expenditure categories within a fund for each department, and capital improvement program budget within fund;
2. Authorize staff to roll over appropriations for multi-year operating grants not completed at the end of the fiscal year, unspent donations dedicated to programs, and the encumbrances for goods and services purchased by FY 2014‑15 year-end but not delivered or provided until FY 2015-16;
3. Authorize staff to roll over appropriations for the General Fund and all other Non-General Fund unencumbered balances and unexpended encumbrances for the FY 2014-15 capital improvement program budget.
Gann Appropriations Limit
State law places limits on the amount of Santa Monica’s General Fund appropriations that can be made without voter approval based on a growth factor calculated on changes in Santa Monica’s population and either State per capita personal income growth or the growth in non-residential assessed valuation. This restriction was placed in effect in November 1979 with the approval of Proposition 4, commonly known as the (Paul) Gann Initiative. The City’s Gann Appropriations Limit, based on growth in non-residential assessed valuation times the annual percentage population change for the City in FY 2015-16 is $1,822,062,344.
A comparison of the City’s FY 2015-16 Gann Appropriations Limit as set forth in the City’s Proposed FY 2015-16 Budget follows:
Proposed Gann Limit-related Spending for FY 2015-16
Appropriations Subject to Limitation
Net (Over) Under
FY 2015-16 appropriations subject to limitation are $1,610,105,818 less than the City’s Gann Appropriations Limit. A resolution to establish the City’s FY 2015-16 Gann Appropriations Limit is included in Attachment E.
Human Services Grants Program (HSGP) and Organizational Support Program (OSP) for Santa Monica’s Arts and Culture Non-Profits
The Community and Cultural Services Department solicits funding requests from local human service and arts and cultural organizations for programs benefiting the community. Funding requests were evaluated based on a Council-adopted funding rationale (January 27, 2015) along with documented needs and priorities identified through community plans (such as the Action Plan to Address Homeless in Santa Monica, Youth Violence Prevention in Santa Monica, Youth Wellbeing Report Card (2014/15)Evaluation of Services for Older Adults, FY 2010-15 Consolidated Plan, the recently released Wellbeing Indexand the City’s culture plan, Creative Capital).
The Proposed Human Services Grants Program (HSGP) for FY 2015-19 (Attachment F1) identifies each nonprofit organization and program proposed for funding and details the proposed program activities. Since the release of the Proposed HSGP for Council’s May 28, 2015 study session, staff recommendations have been revised to include a funding increase for Hospitality Training Academy (HTA) of $56,832 annually from General Fund reserves. The increase would require an appropriation of $113,664 ($56,832 annually for 2 years) and would be used to implement a two-year pilot of the HTA ‘local hire’ project. The current total recommended FY 2015-16 funding level is $8,165,812. This funding level represents a net increase of $800,389 (11%) over the FY2014-15 HSGP ongoing funding base of $7,365,423.
The Proposed Organizational Support Program Grants for FY 2015-19 (Attachment F2) identifies each cultural nonprofit organization proposed for funding. The total recommended FY 2015-16 funding level is $330,600 for 13 organizations. The majority of public comments received to date have expressed gratitude to the City for its sustained support of the arts. Since the release of the draft document for Council’s May 28, 2015 study session, the proposed funding recommendations have not changed.
The proposed funding recommendations would serve as a framework for continued grant funding over a four-year period, FY 2015-16 through FY 2018-19. Once approved, funding would be available beginning July 1, 2015 through June 30, 2016 and may be renewed for an additional three years contingent upon available funding, effective program performance, ability to meet existing and emerging priority community needs, and Council budget approval.
A contract will be executed with each organization approved for funding. City staff will work closely with organizations to promote quality services, monitor contract compliance, and advise agency staff on program, administrative, and fiscal matters.
A number of HSGP organizations provide outreach and in-home services to residents in Santa Monica. Non-profit agency staff and volunteers drive their own vehicles to deliver these services in the community. Staff recommends that the City continue to grant up to five parking permits for each City-funded program that provides outreach and in-home services. Additional permits would be issued at the current fee for a Preferential Parking permit for Visitors. City staff will continue to monitor the issuance of these permits.
Federal Supportive Housing Program (SHP) Renewal Grants
The City has been receiving Supportive Housing Program (SHP), now known as Continuum of Care (CoC), funds for the Coordinated Case Management project since 1996. At this time, staff is requesting authorization to accept grant funds from the Los Angeles Homeless Services Authority (LAHSA) for the CoC grant in the amount of $389,215 for a one year renewal (November 1, 2015 – October 31, 2016).
On March 21, 2005, the U.S. Department of Housing and Urban Development (HUD) announced a $10 million funding initiative for housing for people who are homeless and addicted to alcohol. Staff is requesting authorization to accept Serial Inebriate grant funds from HUD in the amount of $446,822 for a one year renewal (for the tenth year of the grant).
Budget-related information received from City Boards and Commissions is included as Attachment G.
Adoption of the Proposed Budget as amended by Attachment B would formally adopt the first year and approve the second year of the City’s FY 2015-17 Biennial Budget, including the second year of the FY 2014-16 Capital Improvement Program Budget.
C1: Resolution of the City of Santa Monica Revising Portions of the City’s Schedule of Various Permit and User Fees and Charges in the Planning and Community Development, Public Works, Police, Fire, Records and Election Services, Finance, Community and Cultural Services and Housing and Economic Development Departments, in the City Manager’s Office and for the Santa Monica Public Library, and Establishing Certain Permit and User Fees and Charges in the Planning and Community Development, Public Works, Records and Election Services and Community and Cultural Services Departments
C3: Resolution of the City of Santa Monica Setting Forth the Administrative Citation Schedule of Fines for Certain Violations of the Santa Monica Municipal Code, Setting Civil Penalties for Parking Violations and for the Late Payment of Penalties, Setting Fines for Police and Fire Department Responses to Excessive False Fire Alarms, and Setting Fines for the Santa Monica Public Library