Budget Process and Timeline Presentation to the Commission

Budget Process and Timeline Presentation to the Commission February 6, 2012

Overview § City Budget Context § City General Fund Deficit Projection § Mayor’s Budget Instructions § Current Arts Commission Budget – FY 2011 -12 § Timeline 2

City Budget Context § Two-Year Budget for all departments § Need to balance both years § Fixed two-year budget for Enterprise Departments § New Financial Policies § Increasing General Fund Reserve § Limits on use of one-time revenue § Five-Year Financial Plan § 27 labor agreements expiring 3

FY 2012 -13 & FY 2013 -14 Shortfall § Revenue § Local tax revenue improvement § Offset by loss of one-time revenue and state and federal funding § Expenditure Increases § Personnel-related expenditure increases (healthcare, etc. ) § Loss of one-time savings from FY 2011 -12 budget (expiration of furloughs) 4

FY 2012 -13 & FY 2013 -14 Shortfall FY 2012 -13 FY 2013 -14 19. 7 M (282. 4 M ) (262. 7 M ) M) 104. 9 Revenues/Sources (480. 2 Expenses/Uses M) (375. 3 Projected City General Fund Deficit M 5

FY 2012 -13 & FY 2013 -14 Shortfall UNCERTAINTIES • Continued economic recovery • Benefit cost growth (updated estimates in early 2012) • State Budget – Trigger Cuts, Redevelopment, Realignment • Current year overspending or supplemental appropriations • Labor Negotiations 6

Budget Instructions • 5% reduction target each year, plus 2. 5% contingency • Propose ongoing reductions and revenues equal to 5% of adjusted General Fund support for FY 2012 -13 • Propose ongoing reductions and revenues equal to an additional 5% of adjusted General Fund support for FY 2013 -14 • Provide an additional 2. 5% contingency proposal for each year • Reduce General Fund FTEs by 1% in each year (Citywide) 7

City Budget Instructions • Prioritize core functions • Minimize service impacts • Seek and prioritize solutions such as: • Administrative efficiencies • Streamlining programs and operations • Revenue options • Consider independent reviews and audits • Review position classifications • Review and renegotiate contracts • Foster community engagement 8

Arts Commission Reduction Target FY 2012 -13 FY 2013 -14 $200, 4 68 5% Department Savings Target (Ongoing funding) $100, 234 $50, 117 $100, 234 2. 5% Contingency Target (Ongoing funding or one-time funding) 9

Arts Commission Budget 10

Arts Commission Budget 11

Arts Commission Budget 12

Arts Commission Budget

Calendar Key Dates and Next Steps January Jan 20 Feb 10 Feb 21 Feb 27 Feb 28 March 5 May June 1 June July Governor’s Budget Released Deadline for Capital Budget Requests (submitted) Program Budget Discussions Budget Submissions & IT Projects Due to Mayor’s Office Executive Committee Budget Review (public meeting) Budget Presented to Staff Full Commission Budget Review (public meeting) Governor’s May Revise Mayor Proposes Balanced Budget Committee Hearings (public meetings) Budget Considered at Board of Supervisors 14

Questions and Discussion ¡ ¡ Clarifying questions Strategy questions: l l l What is our core function? How do we minimize service impacts to the community? What are the general fund priorities? 15