TITLE
Recommendation to refer the Fiscal Year 2006 First Quarter Budget and Operational Performance Report to the Budget Oversight Committee. (Citywide)
DISCUSSION
This report provides an update on the City's Fiscal Year 2006 (FY 06) budget and operational performance through December 31, 2005. The report covers a broad spectrum of financial information for all funds and departments with multi-year comparisons, charts and graphs to provide a clear picture of the City's financial situation. While the focus of the financial report is the General Fund, exceptional performance (both positive and negative) in other funds is highlighted where applicable. This report also, for the first time, provides an update on the City's operational performance by department, as developed through the Focus on Results (FOR) Long Beach program. Through the first quarter of FY 06, overall revenue and expenditures are on target.
Summary
FY 06 is the third year of the City's Financial Strategic Plan (Plan). As such, over $92 million in structural budget solutions have been included in the General Fund and related funds budgets over the past three fiscal years. These solutions, which have included the reduction of programs, services and positions, as well as increased revenue and cost recovery, have placed a substantial strain on the organization as it downsizes and becomes more efficient. While resources required to provide public safety, infrastructure maintenance, library, recreation and other general government services have been reduced significantly, public demand for services continues to grow. As a result, departments' ability to remain within appropriation limits while providing high quality service will be a continued challenge as the City implements the Plan and restores
equilibrium between the services it provides and the resources available to support them.
As of December 31, 2005, the total adjusted General Fund expenditure budget was $363.8 million, with expected revenue of $358.2 million. The difference between budgeted revenue and expense reflects the use of fund balance. Through the first quarter of the fiscal year, overall revenue and expenditures are on target. With 25 percent of the fiscal year complete, approximately 27.7 percent of anticipated General Fund revenue has been collected. During the same period, approximately 24.6 percent of the adjusted General Fund budget has been expended. The total Adjusted City
Budget as of December 31, 2005 was $2.326 billion. With 25 percent of the year complete, expenditure performance in all funds is at approximately 20.3 percent year-todate.
While performance to date is promising, it is critical to maintain the utmost fiscal restraint as several million dollars of expected, but still to be achieved cost savings (e.g., employee health care benefit) and unbudgeted expenses related to newly negotiated compensation increases put increased pressure on the budget.
Furthermore, current and projected revenue performance is based upon the City's various sources, both structural and one-time. We must recognize the risks inherent in projecting revenue, many of which the City has limited, if any; authority to affect. We must also consider that the FY 06 budget was balanced using some one-time revenues, including the sale of several properties (i.e., City Hall East, State Building parking lot and the Video Choice site), and reimbursements from the federal government.
FOR (Focus on Results) Long Beach is a commitment to performance management designed to help departments improve operational efficiency and effectiveness, a central goal of the Plan. By creating a direct link between program results and the budgets that support them, FOR Long Beach.will give the City the tools to support decisions that allocate scarce resources to the highest priority issues. As this is the first year of FOR Long Beach implementation, data collection systems and analysis are developing and will be implemented over time. This quarterly report for the first time includes highlights of Departmental performance.
TIMING CONSIDERATIONS
[Timing Considerations]
FISCAL IMPACT
[Fiscal Impact]
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
NAME |
APPROVED: |
TITLE |
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GERALD R. MILLER |
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CITY MANGER |