CityofLongBeach

FinanciallySustainableBudgetStrategies CityCouncilBriefing
June19,2012

TonightsFocus

ProjectPurposeandApproach FinancialSustainabilityTrendsandBestPractices BenchmarkingResults PreliminaryOpportunitiesforLongBeach NextSteps

ProjectPurpose

ConductascanoftheCityofLongBeach government Identifyopportunitiesforrestructuring, reformingorotherwiseimprovingthe organizationtoachievelongtermfinancial sustainability Reviewbestpracticesfromlarge municipalitiesforapplicabilitytoLongBeach
3

ProjectApproach

Reviewedbackgroundinformation
Budgetdocuments Departmentorganizationchartsandvacancies CityCharterandothergovernancedocuments

Conductedinterviews Conductedbenchmarking Researchedbestpracticesandcurrenttrends

FinancialSustainabilityTrends andBestPractices
Changestoservicedeliverymodels
Outsourcing,privatization Sharingserviceswithotheragencies Changingpublicsafetydeploymentmodels

Changesincompensation
Pensionstructureandfunding Overtime,specialtyorincentivepay Employeebenefitscontributions
5

FinancialSustainabilityTrends andBestPractices
Revenueenhancements
Fullcostrecoveryforuserfees Taxmeasures

Expenditurecontrolsandshifts Internalreorganizationtoconsolidate redundantorcomplementaryfunctions Servicelevelreductionsasalastresort

TrendsandBestPracticesinLongBeach
Somearebeingimplemented
Expenditurecontrolsandshifts Quarterlyreviewoffees Pensionreformandcostsharing Consolidationofplansreviewandinspections, policeandfiredispatch

WiththedirectionoftheCityCouncil,all departmentshavereducedbudgets proportionatelyinrecentyears

7

GeneralFundReductionsSinceFY2004

Implementeddeficitreductionsolutions totaling$208.7million Eliminated25%oftheworkforce(857FTE) Reducedmanagementstaffby28% Consolidatedbureausanddivisionsto eliminatetwodepartments

GeneralFundReductionsSinceFY2004

RestructuredvariousCityoperationstoreduce costsincludingcodeenforcement,inspection services Increasedemployeecontributionstohealth andretirementcosts Reducedservicelevelsthroughoutthe organization

BenchmarkingComparisons
PeerAgency Anaheim Bakersfield Fresno Oakland Sacramento SanDiego SantaAna LongBeach
1 2

Population1 343,793 354,480 505,009 395,341 470,956 1,321,315 327,731 464,662

GeneralFund Expenditures2 $226,063,414 $176,431,500 $214,775,200 $391,609,934 $356,824,000 $1,128,388,274 $210,013,205 $392,004,602

Source:CaliforniaDepartmentofFinance,January2012 Source:AdoptedFY1112budgets

10

GeneralFundExpendituresperCapita
$1,000 $900 $800 $700 $600 $500 $400 $300 $498 $425 $658 $758 $991 $854

$844 $641

Median $658

Source:AdoptedFY1112budgets
11

TotalStaffingper1,000Population(AllFunds)
12.00 10.00 8.00 6.00 4.00 2.00 5.59 4.07 6.37 4.61 9.50 8.67 7.74 Median 6.37 11.14

Source:AdoptedFY1112budgets
12

GeneralFundPublicSafetyExpendituresas PercentofTotalGeneralFundExpenditures
85% 80% 75% 70% 65% 60% 55% 50% 45% 40% 56% 67% 63% 59% 52% 73% 66% Median 63% 82%

Note:Citystaffpointsoutthatthepercentagerisesto68%forLongBeachwithinternaladjustments. Source:AdoptedFY1112budgets
13

FireStaffingper1,000Population
(SwornandNonsworn,GeneralFund)
1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.80 0.55 0.71 0.77 1.01 0.83 Median 0.83 1.49 1.25

Note:Excludeslifeguards(SanDiegoandLongBeach). Source:AdoptedFY1112budgets
14

FireSwornStaffingper1,000Population
(Allfunds)
1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0.70 0.63 0.50 1.18 1.16 0.99 0.77 0.83 Median 0.77

Note:Excludeslifeguards(SanDiegoandLongBeach) Source:CityofLongBeachpeersurvey
15

FireExpendituresperCapita
(GeneralFund)
$250 $230 $210 $190 $170 $150 $130 $110 $90 $70 $50 $87 $91 $156 $150 $147 $232 $203 $156 Median $150

Source:AdoptedFY1112budgets
16

PoliceStaffingper1,000Population
(SwornandNonSworn,GeneralFund)
2.80 2.60 2.40 2.20 2.00 1.80 1.60 1.40 1.20 1.00 1.54 1.37 1.91 1.91 1.90 2.05 Median 1.91 2.43 2.70

Source:AdoptedFY1112budgets
17

PoliceSwornStaffingper1,000Population
(Allfunds)
2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 1.02 1.02 1.52 1.61 1.43 1.49 1.24 Median 1.43 1.84

Source:CityofLongBeachpeersurvey
18

PoliceExpendituresperCapita
(GeneralFund)
$450 $400 $350 $300 $250 $200 $150 $100 $190 $286 $258 $247 $298 $392 $319 Median $286 $400

Source:AdoptedFY1112budgets
19

OpportunitiesforLongBeach

Combinelikefunctionstoimproveefficiency
Technologyservices Securityservices Dispatchservices Legalfunctions Plansreviewandinspections Parks,recreation,afterschoolandlibraryprograms Infrastructureplanning,engineering,construction andmaintenance
20

OpportunitiesforLongBeach

Consolidategeneralservicesintoone department
Facilitiesmaintenance,custodialservices Fleetmanagement Parkingmanagement Assetmanagement

21

OpportunitiesforLongBeach

Examineopportunitiesforneworincreased sourcesofgeneralfundrevenues
Userfees Additionalchargestoenterpriseandother governmentalfunds Voterapprovedmeasuressuchasparcelorutility userstaxes Debtreliefstrategies

22

OpportunitiesforLongBeach

Reviewdeploymentpractices
Evaluateambulancestaffing Evaluateclassificationsandassignmentstoensure overqualifiedpersonnelarenotperforminglesser functions Analyzepublicsafetyshiftschedulingtobetteralign withdemand Reevaluatealternativeworkschedules Usehourlyorcontractemployeesfordemanddriven activities(recreationprograms,planreviews)
23

OpportunitiesforLongBeach

Continuetoreduceorcontrolcompensation
Usetotalcompensationtoanalyzefinancial impactsoflaborcostincreases BringovertimecalculationsinalignmentwithFair LaborStandardsAct Reducenumberandamountsforspecialtypay Increaseemployeecontributionstohealth, retirementbenefits

24

OpportunitiesforLongBeach

Focusonorganizationalsustainability
Proportionateshareapproachhasworkedwell forLongBeach Caremustbetakentoensureinternalsupport functionssuchasfinancialmanagementand humanresourceshaveadequatestaffingtobe effective Organizationaldevelopmentandemployee trainingareimportantforenhancingproductivity
25

OpportunitiesforLongBeach

Modernizethe1921CityChartertotake advantageofcontemporarymanagement systemsandtechniques

Createaunifiedmanagementstructuretoreduce redundancy,shareresources,streamline processes Leverageprivatesectortosupportpublicservices throughcompetitivepricing

26

ServiceswithCompetitivenessPotential
Towing Refusehauling Streetsweeping Parkingenforcement/parkinglotmanagement Fleetmaintenance Technologysupportservices Workerscompensation(thirdparty administration)
27

ServiceswithCompetitivenessPotential
Employeeassistanceprogram Occupationalhealthmanagement Security Marina Jailmanagement Crossingguards Backgroundchecks
28

NextSteps

Additionalanalysisofdepartmentspecific opportunities Determinepotentialcostsavings, implementationissues ReportbacktotheCouncilinJuly

29

Questions?
JerryNewfarmer,PresidentandCEO
jnewfarmer@managementpartners.com (513)3130503

CathyStandiford,Partner
cstandiford@managementpartners.com (714)2220141

30