city of los angeles cao overview of the proposed 2014-15...
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City of Los Angeles
City of Los Angeles
CAO Overview of the Proposed 2014-15 Budget
Miguel A. Santana
City Administrative Officer April 29, 2014
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City of Los Angeles
Summary
• The Mayor’s proposed 2014-15 Budget stays the course by complying
with the City’s financial policies and moving toward eliminating the structural deficit by 2018-19.
• The 2014-15 deficit of $242 million is addressed with a combination
of ongoing (54%) and one-time (46%) solutions.
• The five-year outlook projects deficits through 2017-18 and a $21 million surplus in 2018-19.
• There are some gaps in the Proposed 2014-15 Budget that will have to be addressed.
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City of Los Angeles 3
Budget at a Glance
TOTAL PROPOSED 2014-15 CITY GOVERNMENT
Appropriations ($ Millions)
Authorized Positions
I. Proprietary Departments Airports $ 4,554.2 3,584 Harbor $ 938.8 994 Water and Power $ 7,999.4 9,996
Total $ 13,492.4 14,574
II. General City Budget General Fund $ 5,117.5 21,799 * Special Funds $ 2,982.6 10,058
Total $ 8,100.1 31,857
III. Grants and other Non-Budgeted Funds Total $ 1,333.6 -
Grand Total $ 22,926.1 46,431
* Sworn staff represents 61 percent of General Fund positions.
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City of Los Angeles 4
Budget at a Glance
Budget ($ Millions) Authorized Positions
Budget Component
Adopted 2013-14
Proposed 2014-15
Percent Change
Adopted 2013-14
Proposed 2014-15
Percent Change
General Fund $ 4,866.9 $ 5,117.5 5.1% 21,873 21,799 -0.3%
Special Funds $ 2,819.6 $ 2,982.6 5.8% 10,020 10,058 0.4%
Total $ 7,686.5 $ 8,100.1 5.4% 31,893 31,857 -0.1%
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City of Los Angeles 5
Budget at a Glance
Fire 17.2%
Police 52.6%
Library 4.3%
Recreation & Parks 5.4%
City Attorney 3.1%
Other 9.2%
Public Works Street Services Transportation
Engineering Capital
Improvements Building & Safety
Planning 8.2%
2014-15 Budget Unrestricted Revenues
$4.4 Billion
Unrestricted Revenues are 54.52% of the City Budget. Restricted Revenues (45.48%) include Grants (except Police Dept.), Sewer, Solid Waste and Gas Tax Receipts.
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City of Los Angeles 6
Revenues
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City of Los Angeles 7
Revenues
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City of Los Angeles 8
Revenues
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City of Los Angeles 9
Capital Investment
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City of Los Angeles 10
Reserve Fund
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City of Los Angeles 11
Reserve Fund
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City of Los Angeles 12
Reserve Fund
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City of Los Angeles 13
Reserve Fund
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City of Los Angeles
Addressing the Deficit
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Projected Deficit
($242 Million)
New Spending
($96 Million)
Proj. Deficit of $242 Mil. + New Spending of $96 Mil.= Total Shortfall of $338 Mil.
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City of Los Angeles
Addressing the Deficit
Ongoing Revenue Above Outlook ($166 Million)
Net One-Time Revenue
($73 Million)
Changes from the Outlook, incl. Police
OT ($69 Million)
Efficiencies and Reductions ($29 Million)
$166 Million in Ongoing Revenues
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City of Los Angeles 16
One-Time Revenues
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City of Los Angeles
Addressing the Deficit 2014-15 Deficit: $242 million
Ongoing One-Time Total Revenue $ 165.59 $ 73.34 $ 238.93 * Adjustments from Outlook: Police Overtime - 65.00 65.00 Other Savings, including pensions and benefits 4.47 - 4.47 Departmental Efficiencies / Reductions 29.19 - 29.19 Program and Funding Realignments (4.54) - (4.54) Service Investments (65.07) (25.97) (91.04) Total $ 129.63 $ 112.37 $ 242.00 Ongoing to One-Time Solutions 54% 46%
*Revenue amounts represent variance from the 2013 Budget Outlook to Proposed 2014-15 Budget and do not reflect full change in revenue from the Adopted 2013-14 Budget to the Proposed 2014-15 Budget.
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City of Los Angeles
2014-15
Proposed 2015-16 2016-17 2017-18 2018-19 ESTIMATED GENERAL FUND REVENUE
General Fund Base $4,867 $5,118 $5,111 $5,269 $5,435
Revenue Growth $251 ($6) $158 $166 $188
Total Revenue $5,118 $5,111 $5,269 $5,435 $5,624 General Fund Revenue Percent Increase
5.1% -0.1% 3.1% 3.2% 3.5%
ESTIMATED GENERAL FUND EXPENDITURES
General Fund Base $4,867 $5,118 $5,276 $5,456 $5,509
Incremental Changes to Base: $251 $159 $180 $53 $94
Subtotal Expenditures $5,118 $5,276 $5,456 $5,509 $5,603 Expenditure Growth Percent Increase
5.1% 3.1% 3.4% 1.0% 1.7%
TOTAL BUDGET (GAP)/SURPLUS
-
($165)
($187)
($74)
$21
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Budget Outlook
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City of Los Angeles 19
Budget Outlook
$5,118 $5,111
$5,269
$5,435
$5,624
$5,118
$5,276
$5,456 $5,509 $5,603
$4,800
$4,900
$5,000
$5,100
$5,200
$5,300
$5,400
$5,500
$5,600
$5,700
2014-15 2015-16 2016-17 2017-18 2018-19
Mill
ions
Four Year Budget Outlook 2014-15 to 2018-19 Expenditure
Growth
Revenues (Proposed) Expenditures (Proposed)
$21 ($74)
($187)
($165)
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City of Los Angeles 20
Budget Outlook
$409.5
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City of Los Angeles 21
Workforce Sustainability
-14.3%
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City of Los Angeles 22
Workforce Sustainability
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City of Los Angeles 23
Workforce Sustainability
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City of Los Angeles 24
Healthcare Costs
Police Increase: $74 Million, 125.4%
Fire Increase: $25 Million, 108.7%
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City of Los Angeles 25
Pensions
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City of Los Angeles 26
Pensions
It is estimated that each 0.25 point decrease in the assumed investment rate of return will increase the City's total pension contribution by $80 million.*
* Projected contributions based on a study commissioned by the CAO, and analysis by the CAO.
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City of Los Angeles 27
Police Overtime
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City of Los Angeles
CAO Recommendations
• Comply with capital investment, Reserve Fund, and Budget Stabilization Fund
policies.
• New revenues identified should first be put toward addressing known gaps in the budget: Police overtime and Fire ambulance augmentation.
• If other additions are made, they should be accompanied by deletions of equal value or new sources of revenues.
• Do not include speculative revenue or engage in deficit borrowing.
• Services should only be restored or enhanced through ongoing sources of funds. Should services be restored or enhanced, also account for support services.
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