January 25, 2017 Study Session Charting Our Path Presentation

City Council Study SessionJanuary 25, 2017

Purpose of Discussion

• Fiscal sustainability• Measures taken to date• Stakeholder ideas• Proposed process for analysis

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Background

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Fiscal Overview

• Past 10 years – economic fluctuations• 10‐year forecast – growing gap• Operational shortfalls continue without action

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Fiscal Overview

• Past 10 years – economic fluctuations• 10‐year forecast – growing gap• Operational shortfalls continue without action

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*$14.7M does not reflect the CalPERS recently reduced discount rate.

*$14.7M

Gap Causes

• Weak revenues– Recession – Changes in shopper’s behavior

• Increased expenses– Pension– OPEB– Healthcare

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Past ActionsFY 07/08

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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14FY 2007/2008

• $5 Million in reductions• 28 full time positions eliminated


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2008/2009• $10.5 Million in reductions• 112 full / part time positions eliminated • 56 vehicles eliminated


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14



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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2011/2012• $5 Million in reductions• PARS Early Retirement Incentive Plan• 72 full time positions eliminated• Refunded City Hall Bonds

($1.7M one‐time savings)


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2012/2013• $700,000 in reductions• Eliminated and extended life cycle of

fleet vehicles


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2013/2014• $900,000 in reductions• Consolidated departments to reduce

costs and streamline operations• Maintenance Services• Recreation Services ‐ Library

• 14 full / part time positions eliminated


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14FY 2007/2008

• $5 Million in reductions• 28 full time positions eliminated



FY 2011/2012• $5 Million in reductions• PARS Early Retirement Incentive Plan• 72 full time positions eliminated• Refunded City Hall Bonds


FY 2012/2013• $700,000 in reductions• Eliminated and extended life cycle of

fleet vehicles

FY 2013/2014• $900,000 in reductions• Consolidated departments to reduce

costs and streamline operations• Maintenance Services• Recreation Services ‐ Library

• 14 full / part time positions eliminated

FY 2015/2016• Non‐General Fund account savings• Department reorganizations to reduce

operating costs• Administrative Services• DWP• Risk and Legal

• 6 full time positions eliminated• Refunded Corporation Yard Bonds



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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

FY 2016/2017• Implemented zero‐based budgeting• Cash flow savings from prepayment of

PERS annual required contribution• Formed two citywide Community

Facility Districts• CFD 2016‐1 – Public Services ‐ $2.2M potential

annual revenue after build‐out• CFD 2016‐3 – Maintenance Services ‐ annual

assessment will help to offset maintenance costs required for future development


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FY 08/09

FY 10/11

FY 11/12

FY 12/13

FY 15/16

FY 16/17

FY 13/14

10 Year Totals• $27.4 Million in reductions• $5.5 Million in one‐time savings• 247 positions eliminated (27.7%)

Other Actions Taken

• Survey and benchmarking with comparable communities

• Early Retirement Incentive Program (PARS) ‐ 2011• Exploration of defined contribution plan and other options

• Prepaying CalPERS – 2015 and 2016• Commissioning independent analysis on pension, OPEB and healthcare obligations ‐ 2016

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What’s Our Path Forward?

• Solicit and research ideas focused on:– Revenue generation– Cost savings

• Present findings and advice/recommendation• Form a consensus and seek Council direction• Incorporate into upcoming budget process

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Budget Timeline

Jan. – Feb.Jan. – Feb. Budget preparation

Personnel budgeting and

revenue forecasting

Feb. – Mar.Feb. – Mar.City Manager

budget meetings

Award of one‐time budget requests

Mar. ‐MayMar. ‐May Budget consolidation

Budget book development

City Manager review

MayMayCity Council Budget

Workshop

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Project Team

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Abigail SchellbergLibrary & Recreation Services Assistant

Director

Cita LongsworthPurchasing Manager

Cynthia MejiaEconomic

Development Intern

Lisa MobleyCity Clerk

Luis NavarroFinancial Analyst I

Reta WestonAccounting Supervisor

Tracy MartinDWP Utilities Project

Manager

Proposed AnalysisProcess

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Guiding Principles

Strong Community

Clarity

Transparency

Fiscal Responsibility

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Focused Solutions

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Overall Process

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Idea Received and Logged

Conduct Research and

Analysis

City Manager Advice to City

Council

Obtain City Council Policy Direction

Information posted to website & reported at Council Study Sessions

Idea Processing

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Idea Idea 3

Idea 1

Idea Idea 2

Proposed Analysis Rubric

• Potential cost savings• Revenue generation

BudgetImpact

• Is it legal? Any jurisdictional issues?• Potential litigation?Legality

• Will public services be reduced?• Will services be unaffected/enhanced?

Impact toServices

• Helps achieve a Strategic Plan goal?• In line with City’s Mission Statement?

Community Priorities

• Is there a capital investment required?• How long until benefit is realized?

Return onInvestment

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Proposed Rating Legend

Symbol Meaning

Projected or potential positive impacts or benefits for the City

Low impact or requires more research

Projected or potential negative impacts to the City

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Each category in the analysis rubric will be assigned a symbol based upon the research:

After the idea is researched and rated, the City Manager will review and make a recommendation for City Council direction:

Recommendation Legend

Symbol Meaning

Recommendation to proceed with idea

Idea requires more research before a determination can be made

Idea is not recommended based upon projected or potential impacts

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Sample Advice and Status

Idea Budget Impact Legality Service

ImpactComm. Priorities ROI

CityManager Review

Council Policy

Decision

Idea 1 Pending CC Decision

Idea 2 Rejected

Idea 3 Pending CC Decision

Idea 4 CM Review

Idea 5 Under Research

19Hyperlink to analysis

Sample Analysis

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Idea Submission and Website

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Idea Submission

• Website: www.DiscoverCorona.com/OurPath• Phone: (951) 736‐2201

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Questions?

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Government & Nonprofit

January 25, 2017 Study Session Charting Our Path Presentation