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HomeMy Public PortalAbout03 IntroductionINTRODUCTION ANNUAL BUDGET • FY 2010 -2011 • CITY OF RgNCHO MIRAGE November 19, 2010 To the Citizens of Rancho Mirage: CITY OF R NC • MIRAGE This Budget document is the financial plan to meet the needs of the citizens of the City of Rancho Mirage for Fiscal Year (FY) 2010 -11 It meets the City Council's policy direction and the community's expectation for quality municipal services, a strong commitment to fiscal responsibility and a balance between operating revenues and expenditures. This document includes narratives, summaries and details of expenditure requests for all of the General Fund Departments as well as the other City, Redevelopment Agency and Housing Authority Funds together with additional information about the City of Rancho Mirage and the budget for FY 2010- 11 On June 1, 2010, a Preliminary Budget document for Fiscal Year 2010 -11 was distributed to the City Council/Boards of Directors for their review Rancho Mirage had previously prepared and adopted two -year budget documents beginning with the adoption of the two -year budget for FY 2001 -02 and FY 2002 -03 However, last year due to the uncertainty in the economy, the decision was made that the City Council/Boards of Directors would only adopt the budget for FY 2009 -10. This year's final document is once again a one -year budget presenting FY 2010 -11 which was approved and adopted on July 1 2010. The Budget for FY 2010 -11 has gone through several stages of development. Regarding the revenue projections, department heads and other staff had several meetings where revenue projections were discussed in great length. The final projections are a result of those meetings and discussions, revisions submitted by the City Council's Budget Subcommittee, and the review by the full City Council during five study sessions. Regarding budgeted expenditures, first department heads and managers were charged with the careful preparation and review of their proposed expenditures with an emphasis that the proposed budget be "lean" while enabling the City to continue to provide a high level of service to the community Two budget workshops were held and the proposed budgets for each Fund were discussed. Following the budget workshops and further review by the City Manager, proposals not deemed by the City Manager to be essential in providing services to the community were reduced or eliminated. The draft budget was then presented for review to the Budget Subcommittee, which includes Council Member Ron Meepos and Mayor Richard Kite, and further revisions were made prior to presenting the Preliminary Budget to the entire City Council. The final budgeted expenditures presented here are a result of those meetings, reviews and revisions made by the City Council. ADMINISTRATION COMMUNITY DEVELOPMENT FINANCE HOUSING AUTHORITY PUBLIC LIBRARY PUBLIC WORKS Tel. 1.760.324.4511 Tel. 1 760.328.2266 Tel. 1 760.770.3207 Tel. 1.760.770.3210 Tel. 1.760.341 7323 Tel. 1.760 770.3224 Fax. 1.760.324.8830 Fax. 1 760.324 9851 Fax. 1 760.324.0528 Fax. 1 760.341.6793 Fax. 1.760.341 5213 Fax. 1.760 770.3261 69 -825 HIGH -WAY 111 / RANCHO MIRAGE, CA 92270 www.RanchoMirageCA.gov www RelaxRanchoMirage.com Citizens of Rancho Mirage November 19, 2010 Page 2 of 13 The end result of all the meetings and revisions is a budget that is balanced without dipping into cash reserves and a budget that continues to provide quality services to the community Next year, during the month of April 2011, staff will review Council's/Boards' priorities and the projected estimates of FY 2010 -11 revenues and expenditures as a basis for the proposed FY 2011 -12 budget. Staff will then prepare a report to present the proposed budget to the Council/Boards for their review and adoption, as presented or amended, at a public hearing in June 2011. In this document, we have provided descriptive information, budget highlights and goals and objectives for the General Fund Departments, Fire Tax Fund, Library Fund, Redevelopment Agency Funds and Housing Authority Funds. The City's key programs and activities occur in these Funds. The Vision for City of Rancho Mirage In the year 2020, the City's goal is that Rancho Mirage will continue to be noted for the quality of its residential neighborhoods. It will continue to be a great place to live or spend leisure time. It will have an international reputation as a destination resort and medical and research center. It will be recognized for its ambience and the unique lifestyle it provides. Residents will enjoy a variety of cultural and recreational opportunities. Rancho Mirage will be distinctive, with a strong sense of place reflected through the quality of the residential and commercial development and the natural setting. The City will maintain and protect the backdrop of the Santa Rosa Mountains and provide public and private open space. The landscape of the City's streets and public areas will present a pleasant, recognizable, citywide theme. It will be the premier location in the Coachella Valley for first class shopping, entertainment, cultural and dining opportunities. Its architecture will be outstanding and appropriate for Rancho Mirage. New residents of Rancho Mirage will find a variety of neighborhoods and housing types from which to choose. Future land uses will be designed to be compatible and harmonious with one another. Residential neighborhoods, commercial and business areas, resorts and public places will be pleasing to the eye, well maintained and safe. The street system will also be safe, efficient and attractive; and signage will enhance the character of the City while meeting the needs of local merchants. The City will continue to be economically prudent and sound. Rancho Mirage will be the prime location in the Coachella Valley to establish new business enterprises and expand existing operations. Residents and visitors will enjoy attractive, comfortable and safe retail shopping facilities compatible with the low density residential and resort character of the City Revenue generating businesses will be encouraged to locate and flourish in Rancho Mirage. Rancho Mirage has achieved, and will continue to achieve, these standards and goals in a variety of ways. First and foremost is the Council's interaction with the community and its commitment to the citizens that Rancho Mirage will always remain an exceptional city to call home. 2 Citizens of Rancho Mirage November 19, 2010 Page 3 of 13 One way this commitment to the citizens is met is the City's General Plan, the community's comprehensive and long -term view of its future; it is a blueprint for the City's growth and development. The City Council and the Planning Commission use the goals and policies of the General Plan as a basis from which to make land use decisions. The General Plan is considered "long- term" since it looks 15 years or more into the future and projects conditions and needs as a basis for determining long -term objectives and policies for day -to -day decision making. A comprehensive update to the General Plan was completed in 2005. Prior to 2005, the last comprehensive update was completed in 1997 The update in 2005 was done to keep pace with the changing conditions in Rancho Mirage and the Coachella Valley The update addressed maintaining and enhancing the livability of Rancho Mirage's neighborhoods, planning for an optimal balance of land uses while enhancing economic opportunities within the City and protecting the City's unique natural setting. The update process was a collaborative effort among City staff, the City Council, professional planners and the citizens and stakeholders of Rancho Mirage. Other ways in which the City ensures that its long range goals are met are through a wide variety of Council Subcommittees Each subcommittee is comprised of two Council members, one or more staff and, in some cases, citizens. Following are a few examples of the current nineteen subcommittees along with their assignments. o Commercial Development Subcommittee — Review proposed and recently submitted commercial development projects. o Eisenhower Medical Center Subcommittee — Work cooperatively with representatives of Eisenhower Medical Center to ensure an effective partnership between the Medical Center and the City o Hotel Marketing & Tourism Subcommittee — Develop a theme for Rancho Mirage tourism, create an effective and user - friendly format to market Rancho Mirage tourism opportunities via the Internet, pursue group marketing of Rancho Mirage tourism and promote Rancho Mirage hotels as a place to hold conferences, business meetings and other special events. o Chamber of Commerce Subcommittee — Coordinate monthly with the members of the Board of Directors of the Chamber of Commerce and the Chamber's Executive Director related to the services provided to the City by the Chamber o Section 19 Specific Plan Subcommittee — Meet with staff, consultants and property owners for the development of a Specific Plan for Section 19 Section 19 is approximately 255 acres located on the northeast corner of Dinah Shore Drive and Bob Hope Drive near the Agua Caliente Casino.Resort.Spa. o Section 30 Design Guidelines & Entry Gates Subcommittee — Design guidelines related to gates in Section 30. Section 30 is approximately 640 acres located south of section 19 and is bordered by Bob Hope Drive to the west, Dinah Shore Drive to the north, Monterey Avenue to the east and Gerald Ford Drive to the south. o Section 31 Subcommittee — Discuss terms and conditions of a development agreement between the City and property owners in Section 31 Section 31 is approximately 640 acres located south of section 30 and is bordered by Bob Hope Drive to the west, Gerald Ford Drive to the north, Monterey Avenue to the east and Frank Sinatra Drive to the south. 3 Citizens of Rancho Mirage November 19, 2010 Page 4 of 13 o Sphere of Influence Subcommittee — Review and analyze information and data related to the City's sphere of influence. o Monterey Avenue Corridor Subcommittee — Related to street improvements on Monterey Avenue; provide input on studies to be undertaken, assist in consultant selection, review consultants' reports, meet with representatives and citizens of City of Palm Desert to discuss issues of mutual concern, provide input on traffic concerns and issues for Monterey Avenue from Dinah Shore Drive to south City limits including signalization, widening and median island design. Another way the City ensures its future financial health is its commitment to a dynamic and balanced economic environment. The community is noted for its country clubs, resort hotels and modern medical - health care facilities. Rancho Mirage's location and strong demographics will continue to attract its share of financial institutions, professional services and furniture/home furnishing retailers. Equally impressive are the number of specialty shops and restaurants. More and more, Rancho Mirage is being hailed as "The Address of Choice" and targeted as an excellent location for a broad range of retailers, restaurants and entertainment related businesses. Maior Policy Issues I believe the major policy issue for the City Council and staff will be the continuing efforts to stimulate high quality development in Rancho Mirage and to promote Rancho Mirage as the Palm Springs Valley's preferred luxury travel destination. These efforts will continue to strengthen and maintain the City's financial condition. Some thoughts are shared below • Commercial Develonment Activities The City of Rancho Mirage's strong financial condition even in these uncertain economic times is due in large part to a vibrant business community Rancho Mirage maintains a healthy and varied business environment by carefully balancing business attraction, business retention and business expansion Major objectives of the coming fiscal year are identified below 0 Promote the recently established Facade and Property Improvement Program to utilize redevelopment funds to assist property owners and businesses located along Highway 111 to improve the exterior appearance of their buildings. 0 Work with Desert European Motorcars (DEM) to coordinate the approved expansion of its current facilities on Highway 111 including the possible use of the City -owned property at Highway 111 and Mirage Way during DEM' future construction activities. 0 Assist in facilitating the final lease -up of the recently completed final phase of the Monterey Marketplace. 4 Citizens of Rancho Mirage November 19, 2010 Page 5 of 13 0 Design and implement the next phase of the City's Hotel Marketing and Tourism Plan to increase room night stays within Rancho Mirage. 0 Continue to administer the "Shop & Dine in Rancho Mirage" program 0 Continue to provide development project assistance for approved and prospective commercial projects including: > Five Peaks, a high -end retail project proposed on 13.5 acres across from the Rancho Mirage Library The developer is also pursuing a hotel use on a portion of the site > The Section 19 Specific Plan designed to foster the creation of a new mixed -use destination for the City near the I -10 / Bob Hope highway interchange. > The planned grand opening of the Sunnylands Visitor Center in November 2011 > Potential mixed -use and hotel /residential projects on prime vacant land sites along Highway 111 0 Continue to work with the Chamber of Commerce to enhance the business environment in Rancho Mirage through programs such as the Team Rancho Mirage and Mayor's luncheons. The planned re- opening of the Ritz - Carlton Hotel is scheduled to occur in December 2011 — next fiscal year. Additional transient occupancy tax revenue will be a significant revenue enhancement to the General Fund. • City's Financial Condition Rancho Mirage, like every other municipality in the State and in the nation, has been adversely affected by the slumping economy However, as mentioned on the first page of this message, the FY 2010 -11 budget for the General Fund is a balanced budget with budgeted operating revenues exceeding budgeted operating expenditures by $621,888. At June 30, 2009, the General Fund had an undesignated fund balance of $8,077,681 During the mid -year budget review in January 2010, the City Council approved the Audit/Budget Subcommittee's recommendation that $7,000,000 be transferred from Undesignated Fund Balance to the Prudent Reserve designation. As a result, at June 30, 2009, the General Fund had an effective undesignated fund balance of $1,077,681 and designations for prudent reserve ($30 million), disaster recovery ($25 million) and public facilities ($10 million) Once the annual financial audit is completed, undesignated fund balance is projected to increase approximately $561,000 to $1,639,034 at June 30, 2010 as a net result of estimated total revenues ($22,453,059) exceeding estimated total expenditures ($21,891,706) in the amount of $561,353 Undesignated fund balance at the end of FY 2010 -11 is projected to increase to $3,561,889, prior to transferring an anticipated $1,000,000 to the Prudent Reserve Designation ($31,000,000). This projected increase of approximately $1,923,000 by June 30, 2011 is due 5 Citizens of Rancho Mirage November 19, 2010 Page 6 of 13 to an estimated $621,888 operating surplus and $1,300,967 in reimbursements for General Fund capital improvements. While there is no doubt that the uncertain economy has and will continue to affect Rancho Mirage, we are weathering the situation better than most due to our historic commitment to fiscal responsibility and the City Council's vision to attract new revenue generating businesses while maintaining the City's well known reputation for high quality residential neighborhoods. Rancho Mirage has and will continue to have an international reputation as a destination resort and medical and research center and will continue to be recognized for its ambience and the unique lifestyle it provides and where its residents enjoy a variety of cultural and recreational opportunities. To further promote tourism, in 2007, Rancho Mirage established a Tourism & Marketing Division. Subsequent to the establishment of this Division, a Tourism Advisory Committee was established in early 2008 and is comprised of Rancho Mirage hospitality leaders to provide the City with expert advice and a collaborative partnership for all Rancho Mirage marketing endeavors. Specific accomplishments, goals and programs can be found in the Tourism & Marketing narrative. As a result of this commitment, bed tax generated mainly by the City's convention/resort hotels, sales tax revenue and interest earnings based on cash reserves account for approximately 45% of the General Fund's approximate $21 9 million of operating revenues in FY 2010 -11 These revenue sources should be further enhanced once the renovation of the Ritz - Carlton is completed. The project includes complete renovation of the existing 244 room resort and construction of 18 spa suites, 54 T -wing units, 57 hotel villas, and 25 tennis villas. This newly renovated resort along with the Rancho Las Palmas Resort and Spa, the Westin Mission Hills Resort and Spa and the Agua Caliente Casino.Resort.Spa keep Rancho Mirage firmly established in a competitive position within the Coachella Valley for recognition by leisure and group resort travelers throughout the world. Even though tourism is the lifeblood of the Coachella Valley and the City, Rancho Mirage's commitment to diversity in its business community translates into the ability to withstand tough economic situations better than most cities. In addition, the City Council/Boards of Directors act quickly when events, whether local, state or nationwide, occur that change or may change the City's economic stability As an example, many months prior to and all during this past budget process, City Council met with staff on a regular basis regarding the drastic changes that were occurring in the economy The discussions concentrated on existing programs and services and what programs and/or services may have to be modified or eliminated based on the community's needs, the City's priorities and specific revenue streams. 6 Citizens of Rancho Mirage November 19, 2010 Page 7 of 13 General Fund Operatine Expenditures The total General Fund budgeted operating expenditures for FY 2010 -11 of $21,241,575 are $1,052,637 (4 72% decrease) less than the FY 2009 -10 budget of $22,294,212. The operating budgets are discussed in greater detail below • Personnel Services Budget The General Fund operating budget provides $8,218,721 for personnel services (salaries and benefits) for FY 2010 -11, a decrease of $106,169 as compared to the FY 2009 -10 budget of $8,324,890. This 1.28% net decrease is due to the following: 0 The only increase related to salary costs are annual merit increases. Merit increases (5% for steps A through E and 3% for steps F through J) occur as part of an employee's annual evaluation. Additionally no salary adjustments for the City Manager and City Clerk have been budgeted. 0 A 10% increase in medical insurance premiums and an 8% increase in dental premiums effective January 1, 2011 are budgeted. No increase is budgeted for vision insurance premiums. 0 For FY 2010 -11, the City's combined employer and employee contribution rate to the California Public Employees' Retirement system (CalPERS) is estimated to decrease slightly to 24.603%. The combined rate for FY 2009 -10 was 24 774% 0 For FY 2010 -11 the Budget Subcommittee proposed decreasing the budget amount for the Health Reimbursement account to $166,600 to more closely reflect past actual reimbursements. The amount of potential reimbursement each employee is allowed each year remains unchanged at $3,000 for single employees with no dependents and $6,000 for employees with a spouse or one or more dependents. 0 For FY 2010 -11, no new positions in the General Fund have been created. Additionally the following positions were eliminated during FY 2009 -10: o Administrative Assistant - City Clerk Department (vacant since November 2009 due to resignation) o Records Technician II - City Clerk Department (eliminated as of July 2010 due to filling Records Manager position vacated in April 2010 due to retirement) o Public Information Officer — Management Services Department (vacant since March 2010 due to resignation) o Senior Accounting Technician — Finance Division (eliminated as of July 2010 due to filling Accounting Manager position vacated in March 2010 due to retirement) o Senior Management Analyst — General Government Division (vacant since June 2010 due to resignation) 7 Citizens of Rancho Mirage November 19, 2010 Page 8 of 13 Regarding other Funds, no new positions are proposed for the Library or Housing Authority Funds. In addition, the Library is eliminating one full -time Senior Librarian position that became vacant in November 2009 and reducing the use of Part-Time staff by 1.4 %. • Operations, Maintenance and Department Capital The FY 2010 -11 budget provides $13,022,854 for operations, maintenance and department capital items - a net decrease of $951,468 (6.81 %) from the FY 2009 -10 budget of $13,974,322. The net decrease is a result of a close review of all Departments' proposed expenditures with the emphasis being that the budget would still enable the City to continue to provide a high level of service to the community Each Department's budget was developed with this in mind and proposals not deemed to meet that expectation were reduced or eliminated. For example, professional/technical and temporary agency services which can now be provided in -house by existing staff were eliminated or reduced. Other requests not deemed essential to providing service to the community were not submitted. Additionally, as noted on the first page of this Budget Message, the Budget Subcommittee proposed various other decreases that are reflected in this document. The net decrease is due primarily to the net effect of the following significant increases and decreases: 0 City Clerk's net decrease of approximately $104,625 is primarily due to eliminating $30,000 in temporary services for staffing assistance and the elimination of $50,200 from the budget since no municipal election is scheduled in 2011 0 Information Services' net decrease of approximately $56,935 is primarily due to eliminating $33,510 in computer enhancements such as software and technology upgrades, and an additional $18.000 reduction in the budget for new fumiture and equipment. 0 Planning's net decrease of approximately $36,365 is a result of a $20,000 reduction in Professional/Technical consultant services for services that could now be performed in- house, $4,600 reduction in meetings, training & travel, and $9,000 for the elimination of Planning Commissioner compensation. 0 Building's net decrease of approximately $20,740 is due primarily to a $15,000 reduction in the Professional/Technical budget for plan - checking services now done in- house. 0 Engineering's net decrease of approximately $75,329 is due primarily to a $45,000 reduction in Professional/Technical for plan- checking services and a $12,500 reduction in inspections both of which are now done in- house. Another $8,200 in temporary staffing was also eliminated. 0 Street Maintenance's net decrease of approximately $88,100 is due primarily to a $30,000 reduction in street striping, $30,000 in street sweeping, and $10,000 in sidewalk/curb /gutter maintenance. $14,400 in temporary staffing was also eliminated. 8 Citizens of Rancho Mirage November 19, 2010 Page 9 of 13 0 Facilities & Fleet's net decrease of approximately $87,000 is due primarily to a $10,000 reduction in professional/technical consulting services, $14,400 in temporary staffing, $15,000 in electricity, $19,520 in maintenance costs, and $10,000 for holiday decorations. Another $8,000 reduction in equipment is a result of one -time costs for purchase of equipment in the previous year. 0 The Public Safety Division's net decrease of approximately $24,519 is due to a vacant traffic enforcement position. 0 The Emergency Services Division's net decrease of approximately $36,800 is due primarily to eliminating $18,600 in costs for offsite hosting of financial software and $15,000 in one -time costs for purchase of a network backup device in the previous year. 0 The General Government Division's net increase of approximately $43,300 is primarily due to the creation of a shared temporary staff position to assist the City Clerk, Management Services, and the Finance Division with clerical workloads. This would allow existing staff to take on additional duties formerly assigned to five positions which have now been eliminated in those Departments. (It's important to note that the budgets for temporary agency services in these Departments were also reduced or eliminated.) 0 The General Government Division's operating transfer to the Fire Fund is increasing by approximately $27,200. The General Fund provides an operating subsidy to the Fire Fund when Fire Fund expenditures exceed Fire Fund revenues. 0 Regional Planning and Implementation Division's net decrease of approximately $73,200 is due to the elimination of the Variable Speed Pool Pump Rebate Program previously funded in conjunction with Southern California Edison. 0 Funding for the Child Enrichment Center in the amount of $22,000 was eliminated. 0 Special Programs Division decreased approximately $102,700 primarily due to the following decreases proposed by the Budget Subcommittee: • $20,000 decrease for Special Contribution funding • $44,500 decrease for Speakers Series programs • $22,000 decrease for Cultural Commission programs 0 The Public Information and Community Relations Division decreased by approximately $146,300 due primarily to reallocating expenditures for the Chamber of Commerce's annual contract to the Economic Development Division in addition to a $27,500 reduction in community relations advertising and sponsorships. 0 The Tourism and Marketing Division's budget decreased approximately $180,000 due to a $140,288 decrease in funding to the Convention and Visitor's Authority (CVA) due to the establishment of the Tourism Business Improvement District (BID). As a result of the 9 Citizens of Rancho Mirage November 19, 2010 Page 10 of 13 BID, the new funding to the CVA was reduced to 25% of prior levels. In addition, a decrease of $40,000 in the Marketing Program was proposed by the Budget Subcommittee and approved by the City Council. 0 The Economic Development Division increased by approximately $101,200 primarily due to shifting of $96,100 in expenditures for the Chamber of Commerce annual contract previously budgeted in the Public Information and Community Relations Division. A decrease of $9,500 in dues & subscriptions is offset by an increase of $12,500 in Reproduction & Printing related to the production and mailing of the resident parking permit program. A recap of General Fund expenditures by Department can be found in the General Fund Departmental Expenditure section of this budget document. Details of the expenditures by Department and their respective Divisions can be found in the pages in that same section. General Fund Operating Revenues General Fund operating revenues are projected to total $21,863,463 for FY 2010 -11. Significant operating revenues, which are summarized in the General Fund Summaries and Revenues section of this budget document together with historical data concerning revenues, include sales tax, transient occupancy tax, interest earnings and reimbursements from the Redevelopment Agency and Housing Authority for staff support provided by the General Fund. Library Fund The City's Library still feels new, a few years after its dazzling opening on January 8, 2006. The Library staff welcomes an average of nearly 1,200 visitors per day in 312 days of Library service annually The 34,900 sq. ft. Library building features shelving for 125,000 books and media, seating for 160, more than 40 computer workstations, support for up to 50 wireless connections and 200 plug -in ports. It also includes a children's storytime room, an outdoor amphitheatre for stories, a public meeting room for audiences of up to 350 which can be divided into three smaller rooms, a conference room for 20, coffee bar, a Friends of the Library bookstore, outdoor reading terrace and parking for 220 vehicles. Settled into its new building, and using the latest data available, the Library continues to score very well in comparison to those 31 public libraries in California serving a core population under 25,000. Rancho Mirage Public Library comes in first in numerous categories: square footage of Library; loans per hour; overall size of Library collection of books, DVDs, etc., total number of check -outs; number of virtual (electronic) visits: number of books added; and funding for operations. In its category, the Library finishes second in circulation and children's use per capita. The Library offers a full range of programming for all interests and all ages. Lectures, author visits, musical performances, theater, and film for adults, join storytelling, crafts, magic, theater, and science for children making the Library a true cultural center for Rancho Mirage and the Coachella Valley Since 1998, the American Library Association (ALA) has honored the Library's 10 Citizens of Rancho Mirage November 19, 2010 Page 11 of 13 publications with 21 "Best of Show" and "Honorable Mention" awards. These awards place the Library in national competition where very high standards for publications, services, and performance are measured against a broad list of peer libraries. The Library was built on the premise of delivering the highest quality and value in all areas. The FY 2010 -11 budget has not created any new positions and is eliminating one full -time Senior Librarian position that became vacant in November 2009, along with reducing the number or part - time hours. In addition, Sunday hours at the Library have been eliminated. In previous years, the Library was open Sundays from November through April. The collection development budget for books, periodicals, DVDs, CDs, etc. shows a modest reduction but will not impact quality Purchases of materials are made with the greatest discounts available from vendors. Contributions from donors continue to supplement City support and allow the Library to offer services, collections, and books that keep citizens informed and enriched through visits or through access via www.ranchomiragelibrarv.org. The Library's operating accomplishments and budget are discussed in more detail in the Library section of this budget document. Housing Authority Created to promote and encourage retention, rehabilitation and development of "affordable" housing units, the FY 2010 -11 Housing Authority budgets continue to identify and implement projects that will benefit households not exceeding the "affordable" income limits. The Housing Authority is the owner of the Parkview Villas Residential Complex, an 82 -unit age- restricted (55 +) residential complex, Whispering Waters, a 30 -unit age- restricted (55 +) residential project, Santa Rosa Villas, a 33 -unit age- restricted (55 +) residential project, San Jacinto Villas, an 83 -unit age - restricted (55 +) residential complex currently under development and the newly acquired Rancho Palms Mobilehome Park. Rancho Palms Mobilehome Park was acquired in January 2009 Its redevelopment into an age- restricted residential community is in progress. The FY 2010 -11 Housing Authority budgets are discussed in more detail in the Housing Authority section of this budget document. No new positions were created. The Housing Authority's projected undesignated fund balance of approximately $3,570,500 at June 30, 2010 is projected to decrease to approximately $1.9 million at June 30, 2011 This decrease is due primarily to an anticipated $2.5 million dollar loan the Housing Authority will make to the Redevelopment Agency as described in more detail below In January 2010, the City Council approved a loan of $12,583,600 from the Housing Authority to the Redevelopment Agency (RDA) for payment in May of the State of California Supplemental Educational Revenue Augmentation Fund (SERAF). For FY 2010 -11, an additional loan of $2,588,369 from the Housing Authority to the RDA was approved in order to fund the second SERAF payment which is anticipated to be made in May 2011 These two payments are not refundable from the State and the Housing Authority is required to be repaid by the Redevelopment Agency by June 30, 2015 These two payments are only a portion of the $2 billion $50 million the State is taking from Redevelopment Agencies throughout the State. 11 Citizens of Rancho Mirage November 19, 2010 Page 12 of 13 Redevelopment Agency The FY 2010 -11 Budget for the Redevelopment Agency (RDA) was developed by staff to identify and implement with available funds those projects that are believed to be important to the community during the upcoming budget year Some major aspects of the Redevelopment Agency budgets are discussed in the Redevelopment Agency section of this budget document. It includes $4,000,000 in Economic Development Programs, $2,000,000 for a Facade Improvement and Property Upgrade Program, $2,000,000 for a Hotel Attraction and Redevelopment Property Acquisition Program, and $6,464,900 in street improvements. At June 30, 2011, the Redevelopment Agency is expected to have approximately $22.9 million in tax - exempt bond proceeds for capital projects and approximately $4.6 million in taxable bond proceeds that can be used for a variety of purposes. As stated in the Housing Authority section above, in FY 2009 -10 the Housing Authority loaned $12,583,600 to the Redevelopment Agency for payment to the State of the Supplemental Educational Revenue Augmentation Fund (SERAF). That payment was made in May of 2010 and an additional ERAF payment of $2,588,369 is anticipated in FY 2010 -11 These two payments are not refundable from the State and the RDA is required to repay the Housing Authority by June 30, 2015 Capital Improvements The Capital Improvements Program totals $10,325,500 of new projects for FY 2010 -11 and $18,046,399 for projects yet to be completed that were budgeted in prior years. Information concerning specific projects of the City, Redevelopment Agency and Housing Authority can be found in the Capital Improvements section of this budget document. It should be noted that only one project carried forward from FY 2009 -10, the Bob Hope Drive street widening project in the amount of $1,872,967 is being financed from the General Fund and that these costs will be offset by approximately $1.3 million in reimbursements from the Agua Caliente Band of Cahuilla Indians. Whenever possible, special revenue or redevelopment funds are used to finance capital improvements instead of relying on the General Fund. Additionally, ongoing future maintenance costs of the projects are carefully considered prior to any project being approved by the City Council /Boards of Directors. Additional Information Information including the Community Profile, debt service schedules and staff salary schedules is provided in the Additional Information section of this budget document. 12 Citizens of Rancho Mirage November 19, 2010 Page 13 of 13 Awards for Outstandine Financial Reoortine The City Council and staff take the stewardship of public funds seriously We strive for excellence in the preparation and communication of financial information to the general public and particularly to the Citizens of Rancho Mirage. The Government Finance Officers Association of the United States and Canada (GFOA) presented, for the ninth lime, the Distinguished Budget Presentation Award to the City for our FY 2009 -10 budget. In order to receive this award, a government unit must publish a budget document that meets established program criteria as 1) a policy document, 2) an operational guide, 3) a financial plan, and 4) a communication device. The City's receipt of this award is a direct reflection of the commitment of the City Council and staff to prepare an informative and thorough budget document. We believe our current budget for FY 2010 -11 continues to conform to program requirements and we will submit this year's budget document for award consideration to GFOA. City Bluenrint I would like to acknowledge the City Council and the Budget Subcommittee for their participation in the development of the FY 2010 -11 budget. The budget serves as a "Blueprint" of the City's plan for expenditure of public funds. It is this "Blueprint" that identifies what services are to be delivered to the residents of the City during the upcoming fiscal year and in some cases, years beyond. The manner in which these services are provided is dictated by this document in that it establishes daily operational funds, staffing levels and capital improvement expenditures. It is the City Council's continued support of City staff which enables the City to implement the various programs as outlined in the budget document in a fiscally responsible and progressive manner The employees of the City of Rancho Mirage continue to pledge their commitment and dedication to providing the high quality of service that has become the expectation of our community Respectfully submitted, / Patrick M. Pratt City Manager 13 14 BUDGET ADOPTION The City of Rancho Mirage has been preparing and adopting two -year budget documents beginning June 7, 2001 with the adoption of the two -year budget for FY 2001 -02 and FY 2002 -03. However last year, due to the uncertainty in the economy, subsequent to the distribution of the document on May 29 2009 to the City Council/Boards of Directors, the decision was made by the Council/Boards that only the budget for FY 2009 -10 would be adopted. This is the second year (FY 2010 -11) in which only one year was adopted. The City of Rancho Mirage's annual operating and capital improvements budgets are adopted by resolutions. Separate resolutions are adopted by the City Council and the Boards of Directors of the Library, Redevelopment Agency, Community Services District and the Housing Authority for the specific funds under their supervision. BUDGET FORMAT The budget document is organized by the City of Rancho Mirage's legal entities - the City, the Redevelopment Agency and the Housing Authority They are further subdivided into organizational units referred to as departments /divisions, programs or funds. Each unit represents a service or activity and emphasizes program planning, evaluation, resource allocation and financial management. At the beginning of each unit presented, a narrative is provided. It includes a description of the unit, listing of the prior year's accomplishments, listing of the goals and objectives, budget summary, budget highlights, staffing summary and justifications for new positions requested, if applicable. BASIS OF ACCOUNTING SUMMARY OF THE BUDGET PROCESS The individual fund budgets are developed on a modified accrual basis of accounting in accordance with generally accepted accounting principles with certain exceptions. For example, advances from the General Fund to other Funds are budgeted as expenditures in the General Fund and as revenue in the funds receiving the advances. Repayment of advances is budgeted as revenue in the General Fund and as an expenditure in the Fund repaying the advance. Under the modified accrual basis of accounting, revenues are considered susceptible to accrual when they become both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues, including property taxes, are considered available if they are collected within sixty days after year end Expenditures are recorded when the related Fund liability has been incurred. Governmental fund liabilities are not considered current until they are expected to be liquidated with expendable available financial resources. Under this method, amounts due on demand are recorded as an expenditure and a current liability in the governmental fund from which payments are expected to be paid. 15 Fund budgets are not adopted for the Joint Powers Financing Authority or for special assessment districts that account for bond proceeds and associated annual debt service. Effective budgetary control is alternatively achieved through bond indenture provisions. BUDGET AMENDMENTS During the Fiscal Year During the fiscal year, the City Council/Boards of Directors may, at their discretion, authorize amendments to budgeted revenues and expenditures and the amendments are input to the automated budget system. Resolutions to formally adopt the amendments are generally done at the same time as amendments are authorized. In addition to the above amendments, staff presents mid -year and year -end reviews of the budget to the City Council/Boards of Directors generally in February and after June. This provides the opportunity for adjustments if needed to budgeted revenues and expenditures based on actual results during the first and second half of the year. BUDGET CALENDAR The budget process commences in February with the preparation for distribution of various budget instructions by the Finance Division of the Department of Administrative Services. Requested budgets are then submitted by the Departments to the Finance Division in February or March. In March the City Manager, Department Heads and other key staff attend a one -day budget workshop and a half -day follow -up meeting in the next month. The purpose of the workshop is to review the draft of the preliminary budget including both revenue assumptions and expenditure requests. Upon completion of the workshop, the preliminary budget is completed and distributed to the City Council and made available to the public for review Subsequent to distribution of the preliminary budget, the budget is discussed with the City Council/Boards of Directors at one or more public meetings and the City Manager generally meets individually with members of the City Council/Boards of Directors at their request to discuss the preliminary budget. 16 Following is the actual budget calendar used. DATES CY 2010 ACTIVITIES March 9 Distribution of budget package (calendar, forms, financial reports and budget worksheets) by Finance Staff March 10 — March 24 Preparation of budget requests by departments and initial preparation of preliminary budget document by Finance Staff March 17 Meeting with department heads and budget managers to review revenue estimate assumptions March 24 Deadline for submission of all budget worksheets and activity detail pages March 24 — March 29 Input of budget figures and preparation of preliminary budget pages by Finance Staff March 29 Deadline for submission of all narratives by departments to Finance Staff March 30 Distribution of preliminary budget document to budget team for review March 31 Budget workshop attended by the City Manager, department heads, budget managers and key staff April 1 — April 8 Finance Staff to implement changes from the budget workshop, prepare revised set of financial summaries and activity detail worksheets April 12 Distribute revised set of financial summaries and activity detail worksheets April 13 Post - workshop budget review attended by the City Manager, department heads, budget managers and key staff April 14 — May 31 Final budget changes, printing and preparation of the Preliminary Budget June 1 Distribution of preliminary budget document to City Council and budget team June 1— July 1 City Council and public review process including three study sessions July 1 Public hearing and adoption of budget, as presented or amended, by City Council Boards of Directors 17 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO MIRAGE, CALIFORNIA, ADOPTING THE BUDGET FOR FISCAL YEAR 2010- 2011 WHEREAS, Government Code Section 37208 (B) states that warrants or checks drawn in payment of demands certified as conforming to the budget need not be audited by the City Council if the budget is adopted by Resolution; and WHEREAS, the City Council reviewed the City Budget for Fiscal Year 2010 -2011. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Rancho Mirage that the City Council hereby adopts the City Budget for Fiscal Year 2010 -2011 by the adoption of this Resolution. PASSED, APPROVED AND ADOPTED this 1st day of July, 2010. ATTEST Cyn is Scott, City Clerk APPROVED AS TO FORM: Steven B. Attorney RESOLUTION NO. 2010 -35 taniila, City 18 CITY OF RANCHO MIRAGE CITY COUNCIL 4> Richard W. Kite, Mayor A RESOLUTION OF THE LIBRARY BOARD OF THE CITY OF RANCHO MIRAGE, CALIFORNIA, ADOPTING THE BUDGET FOR FISCAL YEAR 2009 -2010 WHEREAS, Government Code Section 37208 (B) states that warrants or checks drawn in payment of certified demands need not be audited by the Library Board if the budget is adopted by Resolution; and WHEREAS, the Library Board reviewed the Library Fund Budget for Fiscal Year 2009 -2010 NOW, THEREFORE, BE IT RESOLVED by the Library Board of the City of Rancho Mirage that the Board hereby adopts the Library Fund Budget for Fiscal Year 2009 -2010 by the adoption of this Resolution. ATTEST: PASSED APPROVED and ADOPTED this 2 day of July, 2009. a. „. - Elena Keeran, CMC Board Secretary APPROVED AS TO FORM: c Steven B. Q anilla Board Coun RESOLUTION NO. 2009 -LB -42 19 CITY OF RANCHO MIRAGE LIBRARY BOARD 2 / 4)(44711t Gordon Moller Chairman A RESOLUTION OF THE COMMUNITY SERVICES DISTRICT BOARD OF DIRECTORS OF THE CITY OF RANCHO MIRAGE, CALIFORNIA, ADOPTING THE BUDGET FOR FISCAL YEAR 2010 -2011 WHEREAS, Government Code Section 37208 (B) states that warrants or checks drawn in payment of certified demands need not be audited by the Community Services District Board if the budget is adopted by Resolution; and WHEREAS, the Board of Directors reviewed the Community Services District Budget for Fiscal Year 2010 -2011. NOW, THEREFORE, BE IT RESOLVED by the Community Services District Board of Directors of the City of Rancho Mirage that the Community Services District Board hereby adopts the Community Services District Budget for Fiscal Year 2010 -2011 by the adoption of this Resolution. ATTEST: PASSED APPROVED and ADOPTED this 1 day of July 2010. Cy hia Scott City Clerk APPROVED AS TO FORM: Steven B. ntanilla Board Cou• el RESOLUTION NO. 2010 -CSD -018 20 CITY OF RANCHO MIRAGE COMMUNITY •VICES DISTRICT J. . Richard Kite Chairman PROPOSITION 4 APPROPRIATIONS LIMIT The Appropriations Limitation imposed by Proposition 4 (Article XIJJB) was approved by the voters in November 1979 It was modified by Proposition 111 approved by the voters in June 1990. Commonly referred to as the Gann Limit, it creates a restriction on the amount of revenues classified as tax proceeds which can be appropriated for expenditure in any fiscal year. The Limit is based on actual appropriations during FY 1978 -79, the base year, and is increased each year using the change in population and the change in California per capita personal income. Examples of tax proceeds include property, sales and transient occupancy taxes as well as motor vehicle license fees. The Limit does not apply to other revenues classified as non -tax proceeds such as fines and State subventions restricted to specific uses such as gasoline taxes and fees intended to recover the cost of providing services. During any fiscal year, cities may not appropriate any proceeds of taxes they receive in excess of their Limit. If they receive excess funds in any one year, they carry them into the subsequent year to be used if they are below their Appropriation Limit that year. Any excess funds remaining after the second year have to be returned to the taxpayers by reducing tax rates or fees. As an alternative, a majority of the voters may approve an "override" to increase the Limit. The law only allows such an override to last for four years maximum. The Appropriations Limit applies to "all taxes levied by and for" an agency The most common exceptions to the Limit's requirements are for: • Special Districts which levied a property tax of less than $ 015 in FY 1978 -79 • Redevelopment agency property tax increment funds; a court determined that redevelopment agencies do not have the power to levy a property tax • Enterprise Funds • Benefit assessment districts For most cities, the funds constrained by the Limit will include the General Fund, capital project funds, and special revenue funds. The Appropriations Limit for the City of Rancho Mirage for FY 2010 -2011 is $61,065,822 - a decrease of approximately 1.18% over the Appropriations Limit for FY 2009 -2010. Estimated tax proceeds subject to the appropriations limit based on the FY 2010 -2011 Budget total $15,126,678, an amount $42,053,240 under the appropriations limit for FY 2010 -2011. For purposes of the Limit calculation, either the change in population of Rancho Mirage (41% increase from January 2009 to January 2010) or Riverside County (1.40% increase during the same time period) is to be adopted by the City Council together with the 2.54% decrease in per capita personal income provided by the State Department of Finance. The resolution adopting the Proposition 4 Appropriations Limit for Fiscal Year 2010 -2011 provides for the increase in Riverside County population since it results in a larger Appropriations Limit for the City 21 CITY OF RANCHO MIRAGE CALCULATION OF APPROPRIATIONS LIMIT FISCAL YEAR 2010 -2011 APPROPRIATIONS LIMIT FOR FY 2009 -2010 a $ 61,792,227 ADJUSTMENT FACTORS. PRICE FACTOR - % CHANGE IN CALIFORNIA PER CAPITA PERSONAL INCOME FACTOR (2.54) POPULATION GROWTH FACTOR - RIVERSIDE COUNTY CITY OF RANCHO MIRAGE CONVERSION OF ADJUSTMENT FACTORS TO RATIOS. (FACTOR + 100) /100 PRICE FACTOR - POPULATION GROWTH FACTOR - APPROPRIATIONS LIMIT FOR FY 2010 -2011 $ 61,065,822 2009 -2010 APPROPRIATION LIMIT(a) x CONVERTED PRICE FACTOR (b) x CONVERTED POPULATION GROWTH FACTOR (c) ** Population growth factor used is the higher of the county or city growth change. 22 1 40 < 0.41 b 0.9746 c 1.0140 Note CITY OF RANCHO MIRAGE COMPARISON OF ANNUAL BUDGET TO APPROPRIATIONS LIMIT FISCAL YEAR 2010 -2011 FY 2010 -2011 TOTAL APPROPRIATIONS Less: Non -Tax Proceeds FY 2010 -2011 Appropriation of Tax Proceeds Subject to the Appropriations Limit FY 2010 -2011 Appropriations Limit FY 2010 -2011 Appropriations Under the Appropriations Limit $ 34,139,261 15,126,678 $ 19,012,583 61,065,822 $ 42,053,240 The appropriations limit calculation excludes the Redevelopment Agency because of a California Court decision that determined that Redevelopment Agencies do not have the power to levy a property tax. Based on the same reasoning, the appropriations limit calculation also excludes the Housing Authority. Additionally, the Community Services District is also excluded because it merely serves as an internal funding conduit for library and fire services. 23 RESOLUTION NO. 2010 -37 A RESOLUTION OF THE CITY OF RANCHO MIRAGE, CALIFORNIA, ESTABLISHING THE APPROPRIATIONS LIMIT FOR THE FISCAL YEAR 2010-11 IN ACCORDANCE WITH THE PROVISIONS OF DIVISION 9 OF TITLE 1 OF THE CALIFORNIA GOVERNMENT CODE. WHEREAS, Article XIII B of the Constitution of the State of California, as proposed by the Initiative Measure approved by the people at the special statewide election held on November 6, 1979 and amended in June, 1990 by the people of the State of California (Proposition 111), provides that the total annual appropriations subject to limitations of each local government shall not exceed the appropriations limit of such entity for the prior year adjusted for changes in the cost of living and population except as otherwise specifically provided for in said Article; and WHEREAS, the State Legislature added Division 9 (commencing with Section 7900) to Title 1 of the Government Code of the State of California to implement Article XIII B of the California Constitution; and WHEREAS, the Department of Administrative Services of the City of Rancho Mirage has calculated the City's Appropriations Limit for Fiscal Year 2010 -2011; and WHEREAS, Section 7910 of the Government Code provides that each year the governing body of each local jurisdiction shall, by resolution, establish its appropriations limit for the following fiscal year pursuant to Article XIII B at a regularly scheduled meeting or a noticed special meeting and that fifteen days prior to such meeting documentation used in the determination of the appropriations limit shall be available to the public; and WHEREAS, Proposition 111, as approved by the voters of the State of California, requires a recorded vote of the City Council regarding which of the annual adjustment factors have been selected each year. [THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] 24 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rancho Mirage, California, as follows: 1 That the following factors or growth in the appropriations limit were selected: 2. That the appropriations limit for the City of Rancho Mirage as established in accordance with Section 7902 of the California Government Code for Fiscal Year 2010 -2011 is $61,065,822. 3. That the Mayor of the City of Rancho Mirage shall sign and the City Clerk shall certify to the passage and adoption of this resolution. ATTEST: Change in California per capita personal income: -2.54% Change in Riverside County population: 1.40% APPROVED and ADOPTED this 15 day of July 2010. CynIthia Scott, City Clerk APPROVED AS TO FORM: Steven B. Qui i'illa City Attorne 25 CITY OF RANCHO MIRAGE CITY C Richard W. Kite, Mayor CITY OF RA CRO MIRAGE rff 1 Library Services Circulation Information / Reference Children's Services Adult Services Educational Programs City Attorney + I Community Development Planning -& Zoning Building & Safety Code Compliance l i i ORGANIZATION CHART s \ Administrative Services Finance Information Services Emergency Preparedness Citizens Rancho Mirage City Council I City Manager'/ RDA & Housing Authority Executive. Director Management Services I Human Resources General Government Mandated Programs' - Regional Planning & Implementation: Special Programs Public Information & Community Relations Tourism & Marketing Economic Development Executive Assistance 1 i I 1 Public + Redevelopment` Safety Agency & Housing Riverside Authority County Sheriff's Project Department Management Economic Citizens on Patrol (COPs) Riverside County Fire Department I S 1 City Clerk Records Management Development Project Management Affordable Housing Program Home Improvement Program Title 25 Assistance for Mobile Home Communities Public Works Engineering Capital Improvements Street Maintenance Parks/ Median Islands & Parkways Facilities & Fleet Maintenance DISTINGUISHED BUDGET PRESENTATION AWARD G G OVERNMENT. FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Rancho Mirage California For the Fiscal Year Beginning July 1, 2009 1 --- -se President Executive Director The Government Finance Officers Association of the United States and Canada (GFOA) presented an award of Distinguished Budget Presentation to the City of Rancho Mirage for its budget for the fiscal year beginning July 1, 2009 and ending June 30, 2010. In order to receive this award, a government unit must publish a budget document that meets the program criteria as a policy document, as an operations guide, as a financial plan and as a communication device. The award is valid for one year. We believe our current budget for fiscal year 2010 -2011 continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award. 27 28