City of Redwood City Fiscal Year 2013 2014

City of Redwood City Fiscal Year 2013 -2014 Budget Study Session June 3, 2013 Bob Bell, City Manager

Agenda §Opening Remarks - Robert Bell, City Manager §A Look Back: Restructuring & Innovation Initiatives - Robert Bell, City Manager §Financial Overview - Brian Ponty, Finance Director §Discussion and Direction - Robert Bell, City Manager

Department Reorganization Overview Goals §Improve communication and collaboration across functions §Improve service efficiency and effectiveness §Reduce costs §Provide more effective oversight and support for staff development and performance §Accomplish recommendations from Management Partner’s Organization Structure Review

Department Reorganization Overview Participating Departments §City Manager’s Office/HR §City Clerk’s Office §Community Development/Public Works §Police

City Manager / HR Reorganization

City Manager Reorganization Advantages Increased operational oversight capacity § Strengthened cross-departmental partnerships § Increased focus on strategic planning/initiatives, community engagement, organizational development § Greater integration of economic development function across all departments § 6

City Clerk’s Office Reorganization

City Clerk’s Office Reorganization Advantages Eliminated Delivery Driver and Central Stores positions § Moved Mail Function to City Manager’s Office § Increased administrative support for records management § 8

Community Development Reorganization

Community Development Reorganization Advantages Cost savings allowed partial absorption of lost RDA funds § Better alignment of staff to improve project delivery and customer service § Improved contract management § Improved coordination and communication § 10

Community Development “In the Works” Total Housing Units: 2, 448 § Commercial Projects – Under Construction § § Sequoia Hospital § Kaiser Hospital § Lathrop PARC (Skilled Nursing) § Commercial Projects – Approved (not started) § 24 Hour Fitness § Costco Gas Station Expansion § Commercial Projects – Under Review § Stanford § Block 2 11

Police Department Reorganization

Police Department Reorganization Advantages § Effective and efficient front-line supervision and increased accountability § Focused leadership development and comprehensive succession planning § Increased neighborhood supervisory presence and clear point of contact § Targeted patrol initiatives to address street crime hot spots § Expanded opportunities for community engagement (online and in-person) 13

Employee Cohorts & Organizational Efficiencies Fund Overview § § § Smart Boards Mobile App – Public Stuff Climate Action Plan Economic Development Plan Automation of Payroll / Timecards 14

Department Reorganization Overview / Cohorts Q&A

Redwood City Financial Overview Brian Ponty, Director of Finance

General Fund Revenues $87. 145 Million in FY 2013 -14 Charges for Services $7. 098 8% Other Revenues $8. 897 10% Former Redevelopment Agency $2. 067 2% Transfers-In: $0. 540 1% Revenue from Other Agencies $3. 023 4% Interest Earnings/Rentals $0. 400 0% Property Taxes $35. 142 40% Fines and Forfeitures $0. 576 1% Licenses and Permits $1. 913 2% Other Taxes $8. 664 10% Sales Tax $18. 825 22%

How Property Taxes are Used $1, 000 Assessed Valuation $1, 800 Net Property Taxes Received by Redwood City Others $159 Transfers-Out $48 Library $142 Police $661 PRCS $267 CDD $149 Fire $374

General Fund Expenditures $85. 732 Million FY 2013 -14 Library $6. 756 7. 88% Parks, Rec. & Comm. Svc. $12. 726 14. 84% Community Development $7. 073 8. 25% Fire $17. 836 20. 80% Transfers-Out $2. 305 2. 69% Others $7. 576 8. 84% Police $31. 460 36. 70%

General Fund Where Money is Spent FY 2013 -14 Internal Services (1) 15. 6% Supplies & Services 10. 9% Employee Costs 73. 5% (1) 49% of internal service fund expenses are attributable to employee costs.

General Fund Employee Costs $61. 5 Million FY 2013 -14 Retiree Health $3. 8 6. 18% Others $0. 8 1. 30% Health $6. 0 9. 76% Retirement $10. 2 16. 58% Overtime $3. 8 6. 18% Salaries $36. 9 60. 00% (in millions)

4 3 13 -1 20 12 -1 20 2 1 0 11 -1 20 10 -1 20 09 -1 20 9 8 08 -0 20 07 -0 20 7 6 06 -0 20 05 -0 20 5 4 3 04 -0 20 -0 00 3 20 2 02 -0 20 01 -0 20 Full Time Equivalent Employees (Citywide, All Funds) 620 600 580 560 540 520 500 480 460

General Fund Assumptions Five Year Projections § Secured property taxes: +3. 8% in FY 2013 -14, +4. 8% in FY 2014 -15, and + 5% annually thereafter § Sales tax revenue: +2. 5% in FY 2013 -14, +3. 2% in FY 2014 -15, and +4% annually thereafter § Transient occupancy tax: +9. 8% in FY 2013 -14, and +5% annually thereafter

General Fund Assumptions Five Year Projections § Development revenues are updated to reflect current anticipated projects § No effects of Federal Government deficit reduction efforts § Excess ERAF rebates will decline to $2 million in FY 2013 -14 and to $0 in FY 2014 -15 § No other effects from State

General Fund Assumptions Five Year Projections § No general fund support for capital projects other than transfers of utility users’ taxes § Substantial increases in employer retirement contributions from FY 2015 -16 through FY 201920: • FY 2015 -16 + $3. 1 million • FY 2018 -19 + $6. 5 million • FY 2016 -17 + $4. 2 million • FY 2019 -20 + $7. 8 million • FY 2017 -18 + $5. 3 million

General Fund Assumptions Five Year Projections § No savings from new retirement programs § Employee retirement contributions continue at current levels

PERS Contributions Amortization and Smoothing • FY 15 -16 + $. 8 M • FY 19 -20 + $4. 5 M Assumed Investment Return • FY 15 -16 + $1. 7 M • FY 19 -20 + $ 1. 9 M Mortality Assumptions • FY 15 -16 + $. 6 M • FY 19 -20 + $1. 4 M

Excess ERAF Refunds ? § Tied to K-14 funding and State budget § 12 -13 $4. 2 million actual § 13 -14 $2. 0 million budgeted § 14 -15 $0 estimated § Expect to know more by January 2014

Financial Overview Projections as of June 2013* 2012 -13 2013 -14 2014 -15 2015 -16 2016 -17 2017 -18 Total 87, 183 87, 145 87, 608 90, 871 94, 396 98, 079 Revenues Total Expenditures (86, 216) (85, 732) (89, 388) (95, 083) (98, 868) (102, 805) 967 Deficit / Surplus - % of Revenues 1. 11% (In Thousands) *If no Council Action 1, 412 (1, 780) (4, 212) (4, 472) (4, 726) 1. 62% (2. 03%) (4. 63%) (4. 74%) (4. 82%)

General Fund Projections Revenues & Expenditures* FY 2013 -14 to FY 2017 -18 (in millions) 105 000 100 000 95 000 90 000 85 000 80 000 75 000 4 1 3 1 20 *If no Council action. 5 1 4 1 20 Revenues 1 20 6 1 5 1 20 Expenditures 7 1 6 2 8 1 7 01

General Fund Projected Reserves* % of Revenues Reserves June 30, 2013 June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 * If no Council Action $ 18. 2 million $ 19. 6 million $ 17. 8 million $ 13. 6 million $ 9. 1 million $ 4. 4 million 20. 9% 22. 5% 20. 3% 15. 0% 9. 7% 4. 5%

General Fund Areas of Concern § Sales tax – land for car dealers § Retirement contributions § Educational revenue augmentation fund refunds § Workers’ compensation costs § State & Federal fiscal situations

Financial Overview Q&A

Capital Improvement Program FUND SOURCE Adopted 2012 -13 Adopted 2013 -14 Proposed 2013 -14 Utility Users Tax $7, 710, 000 $12, 549, 000 $10, 719, 000 Gas Tax $1, 254, 000 $1, 804, 000 Measure A $1, 200, 000 Grants and Fees $1, 691, 000 $1, 306, 000 Water Enterprise $3, 330, 000 $3, 000 $6, 000 Sewer Enterprise $3, 500, 000 $3, 250, 000 $6, 250, 000 TOTAL $18, 685, 000 $22, 559, 000 $27, 279, 000 34

Discussion and Direction § Bring Back Proposed 13/14 Budget for Adoption on June 24 § Out Years: • Organization Adaptability • Revenue • Contain Costs 35