{{section.number}}a
CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: FY 2022-23 Annual Comprehensive Financial Report and FY 2023-24 First Quarter Financial Status Report
1. Motion to accept City of Glendale's Annual Comprehensive Financial Report, Report on Internal Control over Financial Reporting, and Communication with Those Charged with Governance for the fiscal year ended June 30, 2023
2. Motion to note and file the Financial Status Report for the year ended June 30, 2023
3. Motion to note and file the Financial Status Report for the period ending September 30, 2023
4. Motion to Increase the Citywide Authorized Salaried Position Count
5. Resolution Providing for the Establishment of Classification Titles and Compensation for Employees of the City of Glendale Covered by the Glendale Management Association Memorandum of Understanding, Including Employee Relations Exempt Classifications
6. Resolution Providing for the Establishment of Classification Titles and Compensation for Employees of the City of Glendale Covered by the Glendale City Employees’ Association Memorandum of Understanding, Including Confidential and Hourly Classifications
7. Resolution Providing for the Establishment of Classification Titles and Compensation for Executive Level Employees of the City of Glendale
8. Resolution Providing for Supplementary Benefits and Compensation of Certain Officers and Executive Employees of the City of Glendale to Supplement the Classification and Compensation Resolution of Said City
9. Motion seeking direction on the proceeding of the budget balancing strategies
10.Resolution of appropriation
COUNCIL ACTION
Item Type: Action Item
Approved for December 19, 2023 calendar
2{{section.number}}a
4 6
7 3
EXECUTIVE SUMMARY
The Annual Comprehensive Financial Report, the Report on Internal Control over Financial Reporting, and the Communication with Those Charged with Governance for the fiscal year ended June 30, 2023, are presented herein. The City received an unmodified opinion from the external auditors, which means the City’s financial statements are presented fairly, in all material respects, in accordance with generally accepted accounting principles.
As of June 30, 2023, the City has a net position of more than $1.79 billion for all funds.
The General Fund recorded $322.6 million in revenues versus $287.1 million in expenditures. The ending unassigned and charter reserve fund balance is $123.2 million, 39.2% of the adopted FY 2023-24 budget.
For the FY 2023-24 first quarter, General Fund revenues received are approximately $28.3 million, or 8.7% of the revised revenue budget. Total General Fund expenditures through the first quarter are approximately $76.2 million, or 23.4% of the total revised budget. In addition, two budget adjustments are being requested totaling $305,000, of which $230,000 is in the General Fund. Seven additional positions are being requested to the authorized salaried position count.
Staff is also bringing forth four Resolutions relating to compensation adjustments for a few classifications as the City continues to bring salaries into alignment with their respective labor market counterparts. The proposed actions impact the GCEA and GMA bargaining units. In addition, a Resolution relating to the Executive-level employees, who are unrepresented, and another Resolution for supplementary benefits and compensation of certain officers and Executive employees are presented.
Lastly, a preliminary analysis on potential General Fund budget balancing strategies is presented in this report, seeking Council’s direction.
RECOMMENDATION
That the City Council approve the attached motions accepting the City’s Annual Comprehensive Financial Report, FY 2023-24 First Quarter Financial Status Report, the increase to the citywide authorized position count as well as direction on the potential budget balancing strategies, in addition to the approval of the attached resolutions for the establishment of classification titles and compensation, and the Resolution of Appropriation.
3{{section.number}}a
4 6
7 3
ANALYSIS
FY 2022-23 Annual Comprehensive Financial Report
The Annual Comprehensive Financial Report (ACFR) is the City’s audited financial statements. Finance staff prepares and compiles the ACFR which is then audited by the City’s independent certified public accountant, CliftonLarsonAllen LLP. The Auditors fieldwork commenced in June 2023 and concluded in November 2023 with the issuance of the Independent Auditors’ Report on November 20, 2023.
The ACFR is a set of government financial statements comprising the financial report of the City at the end of the fiscal year. The ACFR complies with the accounting requirements promulgated by the Governmental Accounting Standards Board (GASB), Generally Accepted Accounting Principles (GAAP), and applicable legal requirements.
These standards, principles and regulations provide the framework and rules which the City follows to produce this financial report. The ACFR is audited by an external certified public accountant pursuant to Article IV, Section 16 of the City’s Charter. The ACFR is used by numerous government agencies, bond rating institutions, and financial information repositories in order to comply with various reporting, financial, and bond disclosure requirements.
The results of the annual audit are formally published in the ACFR. For the fiscal year that ended June 30, 2023, the City of Glendale received an Unmodified Opinion. This is the “cleanest” or highest opinion an entity can receive, which means that the City of Glendale’s financial statements are presented fairly, in all material respects, in accordance with generally accepted accounting principles.
The ACFR will be submitted to the Government Finance Officers’ Association for an annual national achievement award. To qualify for this award, the City must publish an easily readable and effectively organized report must conform to the standards established by the award program. The City has received this national achievement award for 28 consecutive years and staff believes that this years’ ACFR will once again earn this designation.
The ACFR is organized into the following three main sections:
1.Introductory Section includes the Transmittal Letter from the Director of Finance and Information Technology, a listing of the Administration and Executive Management Team members, and the City’s Organization Chart.
2.Financial Section is the main section of the ACFR and includes the Independent Auditors’ Report, Management’s Discussion and Analysis (MD&A), the City’s government-wide statements, governmental, proprietary and fiduciary fund-level statements, notes to the basic financial statements, and the required supplementary information (RSI). The remainder of the Financial Section 4{{section.number}}a
4 6
7 3
presents the financial statement information for non-major governmental and enterprise funds, all internal service funds and fiduciary custodial funds.
3.Statistical Section Located towards the end of the ACFR, provides readers with a variety of information, all of which is unaudited.
Management’s Discussion and Analysis (MD&A)
The MD&A starts the Financial section of the ACFR and serves as an executive summary. GAAP requires that management provide this narrative to accompany the basic financial statements. The Transmittal Letter which precedes the MD&A in the Introductory section, is designed to complement the MD&A and should be read in conjunction with it. The MD&A is located immediately following the Independent Auditors’ Report.
Government-wide statements
The overall financial picture of the City is presented, in accordance with the Governmental Accounting Standards Board pronouncements, on a Government-wide basis. Exhibits A-1 (page 21) and A-2 (page 23) in the AFCR are designed to provide readers with a broad overview of the City’s finances similar to a private-sector business consolidated financial statement. These statements show the end balances and overall results of operations for all City funds. These two government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from those primarily supported by a user charges (business-type activities). The two government-wide statements presented are as follows:
•The Statement of Net Position presents information on all of the City’s assets and deferred outflows of resources as well as liabilities and deferred inflows of resources, with the difference reported as net position. This is similar to a Balance Sheet in private sector accounting.
Exhibit A-1 Statement of Net Position
(in Millions)
Government Business Total
Assets $ 1,827 $ 1,034 $ 2,861
Deferred outflows of resources 171 45 216
Liabilities (843) (378) (1,221)
Deferred inflows of resources (55) (9) (64)
Net position June 30, 2023 $ 1,100 $ 692 $ 1,792
•The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. Similar to an Income Statement in private sector accounting, all changes in net position are reported 5{{section.number}}a
4 6
7 3
as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods.
Exhibit A-2 Statement of Activities
(in Millions)
Government Business Total
Revenues $ 498 $ 379 $ 877
Expenses 416 401 817
Increase (decrease)
in net position 82 (22) 60
Net Position July 1, 2022 1,018 714 1,732
Net position June 30, 2023 $ 1,100 $ 692 $ 1,792
Fund-Level Statements and Notes
Following the government-wide statements are the fund-level financial statements and notes. The three main fund types are governmental funds, proprietary funds and fiduciary funds. Governmental funds include General Fund, Special Revenue Funds, Debt Service Funds and Capital Project Funds. Proprietary funds include enterprise funds and internal service funds. Fiduciary funds include private-purpose trust funds and custodial funds.
The Notes section provides a significant amount of disclosure requirements that supplement the financial data presented in the financial statements. Some of the note disclosures include detailed information about cash and investments, capital assets, long-term debt and liabilities, the City’s pension plan and contingent liabilities.
Net Pension Liability
A summary of the net pension liability for FY 2021-22 and FY 2022-23 by plans is shown below. Compared to the FY 2021-22 net pension liability, the FY 2022-23 amount increased by $288 million, from $389 million to $677 million. The significant increase was mainly due to a negative 6% investment return in FY 2021-22 and PERS lowering the discount rate from 7% to 6.8% in July 2021, which is reflected in the FY 2022-23 ACFR.
6{{section.number}}a
4 6
7 3
Net Pension Liability
(In Millions)
FY 2022-23 FY 2021-22
Measurement date: June 30, 2022 June 30, 2021
Miscellaneous Plan:
Total pension liability $ 1,320 $ 1,262 Total pension asset $ 985 $ 1,083
Net pension liability $ 335 $ 179 Funding % 75% 86%
Safety Plan:
Total pension liability $ 1,021 $ 956 Total pension asset $ 679 $ 746 Net pension liability $ 342 $ 210 Funding % 67% 78%
Total Misc and Safety:
Total pension liability $ 2,341 $ 2,218 Total pension asset $ 1,664 $ 1,829
Net pension liability $ 677 $ 389 Funding % 71% 82%
Report on Internal Control over Financial Reporting
The Report on Internal Control over Financial Reporting summarizes the auditors’ comments and recommendations regarding opportunities for strengthening internal controls and operating efficiency. For the June 30, 2023 fiscal year end, the auditors did not identify any significant deficiency or material weakness.
Communication with Those Charged with Governance
The Communication with Those Charged with Governance is for the auditors to communicate the significant audit findings or issues, and other information, that are not communicated in the audited financial statements. The auditors concluded the following:
(1) all significant transactions have been recognized in the financial statements in the proper period; (2) management’s estimates impacting the financial statements are disclosed; (3) the financial statement disclosures are neutral, consistent and clear; (4) the auditors encountered no significant difficulties in dealing with management in performing and completing the audit; (5) the auditors had no disagreement with the management. The letter also presents the corrected journal entries recommended by the auditors and the uncorrected journal entries. The effects of the uncorrected journal entries are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
7{{section.number}}a
4 6
7 3
Fiscal Year 2022-23 General Fund Year-End Results
For the year ended FY 2022-23, the General Fund had a net surplus of approximately $30.5 million which included the use of the remaining American Rescue Plan Act (ARPA) funds in the amount of $38.4 million.
General Fund Revenues
The final revenues received as of June 30, 2023, were $322.6 million compared to the revised resource budget of $294.2 million, primarily due to the use of the entire remaining ARPA funds in the amount of $38.4 million, instead of the initial projected amount of $18.0 million.
Another major revenue category that received higher revenues than anticipated was Property Taxes by $1.6 million. Although the number of home sales have seen a decline due to rising interest rates, Glendale has continued to experience growth in its assessed property valuation resulting in modest growth in property tax revenue.
Utility Users Taxes (UUT) revenues also came in higher than anticipated by $2.4 million, mainly due to Electric UUT ($889 thousand) and Gas UUT ($1.5 million) revenues, as a result of a colder than average winter which caused an increase in demand and usage.
In addition, there was a large increase in demand for natural gas from the Russia/Ukraine conflict which was much higher than anticipated.
The Occupancy & Other Taxes category ended the fiscal year with higher revenues by $2.3 million, for Franchise Fees, Landfill Host Assessment fees and Transient Occupancy Taxes (TOT). Hotel services have seen significant recovery since the pandemic. The Franchise Fees collected came in higher than anticipated due to a rate increase that was approved for hauling services, which was not included in the initial budget estimate.
The Charges for Services category ended the year with higher revenues received by $1.2 million, mainly due to larger receipts in Emergency Medical Response fees, Plan Check fees and in Community Services & Parks’ fees resulting from higher than anticipated participation in various activities such as camps and facility rentals.
In addition, while the Sales Tax category (inclusive of Measure S revenues) only recorded $151 thousand more in revenues than the final General Fund budget, a large portion of the Measure S sales tax revenue was deposited in the Measure S CIP Fund (Fund 4011) to cover Council-approved capital projects. Between the two funds, the City has experienced a healthy sales tax growth with the total sales tax revenues coming in higher by $1.3 million compared to the final budget.
Offsetting some of the higher receipts in revenues is the variance in the Interest/Use of Money category, which is mainly due to the unrealized losses in interest revenue recorded in accordance with GASB 31 in the amount of $4.8 million, offset by realized 8{{section.number}}a
4 6
7 3
interest revenue that came in at $1.5 million higher than anticipated. The following table reflects the General Fund revenues by major category as of June 30, 2023.
General Fund Resources
Budget to Actuals, June 30, 2023
(In Millions)
Category Projected Actuals
%
Received
Property Taxes $75.5 $77.1 102.1%
Sales Taxes $56.8 $57.6 101.4%
Sales Taxes (Measure S) $21.7 $21.1 97.2%
Utility Users’ Tax $27.5 $29.9 108.7%
Occupancy & Other Taxes $18.8 $21.1 112.2%
Licenses & Permits $10.5 $11.5 109.5%
Rev. from Other Agencies $0.2 $0.7 350.0%
Charges for Services $18.5 $19.7 106.5%
Interfund Revenue $18.7 $18.7 100.0%
Fines & Forfeitures $3.0 $3.4 113.3%
Interest/Use of Money $3.1 $0.2 6.5%
Misc. & Non-Operating $1.2 $1.3 108.3%
Transfers $20.7 $21.9 105.8%
Total Revenues $276.2 $284.2 102.9%
ARPA Funds $18.0 $38.4 213.3%
Grand Total Resources $294.2 $322.6 109.7%
General Fund Expenditures
The actual expenditures as of June 30, 2023 are $287.1 million, reflecting 97.6% of total General Fund final projection. Compared to the FY 2022-23 projection, the actual expenditures were underspent by $7.1 million of which $5.9 million was for various Measure S funded programs that were unspent by end of the fiscal year. Another attributable factor to this variance includes further salaries & benefits savings in the net amount of $1.3 million, in addition to the anticipated $5.5 million in projected vacancy savings. Furthermore, the maintenance & operations category was underspent by approximately $300 thousand compared to the projection, offset by an overage in Capital Outlay for $100 thousand and Transfer Out category of $300 thousand. The following table reflects the General Fund expenditures by major category as of June 30, 2023. 9{{section.number}}a
4 6
7 3
General Fund Expenditures
Budget to Actuals, June 30, 2023
(In Millions)
General Fund Ending Fund Balance, June 30, 2023
The City’s beginning General Fund unassigned & charter reserve fund balance for FY 2022-23 was $92.7 million. Factoring in the FY 2022-23 increase in unassigned fund balance and the Measure S remaining program budget carryover/addition to assigned fund balance of $5.0 million, results in a net surplus of $30.5 million, with an ending unassigned & charter reserve fund balance of $123.2 million, a reserve of 39.2%. The City Council’s current General Fund Reserve policy is a minimum of 25% with a target of 35%. The following table displays the fund balance of the General Fund as of June 30, 2023.
General Fund
Ending Unassigned & Charter Reserve Fund Balance, June 30, 2023 (In Millions)
Category Projection Actuals
Revenue $276.2 $284.2
Expenditures $294.2 $287.1
Subtotal ($18.0) ($2.9)
+ARPA $18.0 $38.4
Measure S Carryover/Assigned $0.0 ($5.0)
Net Surplus/(Use) $0.0 $30.5
Ending Reserve $92.7 $123.2
Reserve % 31.5% 39.2%
Category Projected Actuals
%
Expensed
Salaries & Benefits $205.8 $204.5 99.4%
Maintenance & Operations $56.0 $55.7 99.5%
Capital Outlay $0.3 $0.4 133.3%
Transfers Out $10.4 $10.7 102.9%
Sub-Total $272.5 $271.3 99.6%
Measure S $21.7 $15.8 72.8%
Grand Total $294.2 $287.1 97.6%
10{{section.number}}a
4 6
7 3
FY 2023-24 First Quarter Financial Status Update
The City’s FY 2023-24 budget was adopted by City Council on June 13, 2023. The budget is not a static guideline for spending but rather a dynamic document subject to constant revision and adjustment. Since budget adoption, staff has continued to analyze the revenues and expenditures that have been received and recorded and has revisited the adopted budget for proposed adjustments to the revenues and expenditures. The first quarter financial update presented in this report includes the revenues and expenditures recorded through September 30, 2023. The report also includes proposed adjustments to the FY 2023-24 adopted budget.
General Fund Revenues
Revenues received in FY 2023-24 through September 30, 2023, total approximately $28.3 million, or 8.7% of the revised revenue budget. This level of tracking on revenues is generally typical around this time as revenues received in July and August are accrued back to the prior fiscal year in accordance with Generally Accepted Accounting Principles. In addition, some revenues are received after the quarter-end cut off, such as Property Taxes. However, based on the FY 22-23 year-end results, staff re- evaluated the revenue projection for FY 23-24 and is proposing revenue amendments for the following categories:
Utility Users Taxes (UUT): Staff is proposing increases to the Electric and Gas UUT estimates in the amount of $1.8 million. Per our consultants, these categories are tracking higher than initial projections. In addition, the demand for residential electricity is expected to increase steadily driven by population growth, rising incomes, and electrification. As for Gas UUT, although revenues are projected to show less growth than prior year, they are still tracking higher than the adopted revenue estimate.
Licenses & Permits: Staff is proposing an increase to this category of $378 thousand, due to the street permits revenue tracking higher than prior year and initial estimate.
Charges for Services Category: The revenues in this category are proposed to be amended by $5.6 million of which $4.6 million was already approved by Council through a Resolution of Appropriation for the Fire Department’s Public Provider Ground Emergency Transportation Inter-Governmental Transfer Program (GEMT). The remaining $1.0 million amendment is for franchise fees, express plan check fees, and advertising revenue all tracking higher than initial estimates.
ARPA: The FY 2023-24 Budget was adopted with $20.4 million in remaining ARPA funds, however the entire amount of ARPA funds was recognized in FY 2022-23, leaving no remaining balance to be recognized for FY 2023-24.
In the following months, staff will assess the General Fund revenues and bring back any additional amendments to Council with future financial update reports. The following table displays General Fund revenues as of September 30, 2023, by major category.
General Fund Revenues
11{{section.number}}a
4 6
7 3
Budget to Actuals, September 30, 2023
(In Millions)
Category
23-24
Adopted
23-24
Revised
Actuals
As of Sep 30
%
Received
Property Taxes $80.3 $80.3 $0.1 0.1%
Sales Taxes* $107.2 $109.8 $6.9 6.3%
Utility Users Taxes $29.6 $31.4 $5.2 16.5%
Occupancy Taxes $10.0 $10.0 $2.0 20.0%
Licenses & Permits $10.1 $10.5 $2.3 21.9%
Revenue from Other Agencies $0.4 $0.4 $0.0 0.0%
Charges for Services $29.2 $34.8 $5.0 14.4%
Interfund Revenue $19.1 $19.1 $4.8 25.0%
Fines & Forfeitures $3.2 $3.2 $0.7 21.9%
Interest/Use of Money $3.7 $3.7 $1.2 32.4%
Misc. & Non-Operating $0.8 $0.8 $0.1 12.5%
Transfers from Other Funds $22.4 $22.4 $0.0 0.0%
Total Revenues $316.0 $326.4 $28.3 8.7%
ARPA $20.4 $0.0 $0.0 -%
Total Resources $336.4 $326.4 $28.3 8.7%
*Includes Measure S Sales Tax revenues and one-time use of Measure S Fund Balance General Fund Expenditures
As of the first quarter, expenditures are tracking slightly lower than 25% of the budgeted amount, totaling to $76.2 million or 23.4% of the total revised budget. Expenses can fluctuate from the expected 25% mark for a variety of reasons including seasonal spending patterns and procurements that will occur later in the fiscal year.
The revised budget includes approximately $7.3 million in Council approved budget adjustments through September 30, 2023, to the General Fund as well as $3.9 million in Measure S appropriation carryovers from the prior year for programs and activities that have not yet been completed. The following table reflects the General Fund expenditures by major category, as of September 30, 2023.
General Fund Expenditures
Budget to Actuals, September 30, 2023
(In Millions)
Category
23-24
Adopted
23-24
Revised
Actuals
As of Sep 30
%
Expensed
Salaries & Benefits $223.4 $223.5 $51.5 23.0%
Maintenance & Operations $75.1 $82.1 $16.7 20.3%
Capital Outlay $0.05 $0.9 $0.0 0.0%
Transfers Out $16.0 $19.2 $8.0 41.7%
Total Expenditures $314.5 $325.7 $76.2 23.4%
12{{section.number}}a
4 6
7 3
Proposed Budget Adjustments
The following budget adjustments are being requested to the FY 2023-24 Budget.
Police
The Police Department is requesting the approval of six new Police Services Officer (PSO) positions. In the current climate of heightened public safety demands and an ever-growing workload, the Glendale Police Department faces a significant challenge in ensuring the effective allocation of our sworn officers' expertise. The expansion of the PSO position into our workforce is not just a strategic necessity but an operational imperative. Moreover, hiring additional PSOs presents a cost-effective solution to the general shortage crisis of sworn officers.
PSOs are tasked with essential, yet less specialized responsibilities, such as investigating incidents with no suspect information, basic report writing, evidence collection, minor traffic collision investigations, parking enforcement, and assisting with traffic control. By having a greater number of PSOs and delegating these tasks to them, we would optimize the use of our sworn officers' specialized skills and training, ensuring that they are available for core duties, such as answering emergency calls for service and conducting proactive enforcement efforts, as well as increased uniformed presence around the community.
The cost for these positions cannot be absorbed within the Police Department’s General Fund budget and therefore, a total appropriation of $230,000 representing the prorated cost of six positions for a four-month period, is being requested for FY 2023-24 from the General Fund Undesignated Fund Balance.
Glendale Water and Power
In September 2023, the City Council sanctioned the creation of the new Clean Energy Manager classification, supporting the City Council’s goal of enhancing clean energy resources. Initially, it was intended to request an additional full-time equivalent for this role, but it was overlooked. Staff are now requesting the addition of one position to address this oversight. The cost associated with the addition of the position will be absorbed within the department’s FY 2023-24 budget.
The following table summarizes the current and proposed authorized salaried full-time equivalent (FTE) count including the requests from Police and Glendale Water and Power departments:
Current
FY 2023-24
Proposed
FY 2023-24
All Funds 1,613.0 1,620.0
General Fund 937.8 943.8
13{{section.number}}a
4 6
7 3
Management Services
Glendale TV staff is requesting a $75,000 allocation from PEG funds to purchase equipment, tools, and supplies needed to increase reliability and enhance capabilities in Glendale TV's live broadcast and post-production facilities. Due to increased service requests and to meet industry standards, GTV staff have made workarounds to maintain ongoing operations, which include live televising and streaming the City meetings. These workarounds generally involve borrowing components from supporting systems to use in more critical areas. Due to these trade-offs, some ancillary parts of the Glendale TV broadcast and post-production facilities remain unusable due to missing components, which reduces operational capabilities and effectiveness. These items include uninterruptible power supplies (UPS), video distribution amplifiers, and 4K resolution video monitors, as well as bulk video and audio cable, connectors, and tools necessary for terminating cables. Further, this funding will be used for emergency replacement of broadcast equipment as needed.
General Fund Projected Ending Fund Balance, June 30, 2024 Considering the FY 2023-24 revised revenues and appropriations, the unassigned & charter reserve fund balance is forecasted to increase $0.5 million. This brings the projected ending General Fund reserve to $123.7 million, a reserve of 38.0% of the revised FY 2023-24 General Fund appropriation. The following table displays the projected fund balance of the City’s General Fund as of June 30, 2024.
General Fund
Projected Ending Unassigned & Charter Reserve Fund Balance, June 30, 2024 (In Millions)
Category Revised
2023-24
Revenue $326.4
Expenditures $325.9
Net Surplus/(Use) $0.5
Ending Reserve $123.7
Reserve % 38.0%
14{{section.number}}a
4 6
7 3
AMENDMENT OF CLASSIFICATION AND COMPENSATION RESOLUTIONS Introduction
City departments regularly assess their organizational structures, leading to suggestions for modifications in job classifications and titles. These revisions often stem from inequity studies, market trends and recruitment or retention difficulties, necessitating adjustments in compensation. Amendments to the Classification and Compensation resolutions are required to implement these changes. The Human Resources Department and the City Manager’s office conduct a review, and ultimately the City Manager endorses these proposals before they are presented to the Council.
The proposed classification adjustments are detailed in the attached Resolutions. A summary of these adjustments and corresponding page numbers for the salary ranges in “Exhibit A” are provided below.
City Attorney’s Office
Following the retirement of a vital staff member, the City Attorney plans to streamline legal support among essential staff. This involves assigning a specific individual to primarily handle claims alongside offering litigation, budget, and administrative support to the City Attorney’s Office. In line with this strategy, the City Attorney is proposing the creation of a new role: Claims Support Services Coordinator, with a suggested top salary step of $8,493.40 per month.
Community Development Department
To attract and retain the necessary talent for these highly specialized roles, the Director of Community Development proposes adjusting the compensation for two classifications to align with the market trends. It is important to note that current recruitment efforts for the Principal Building Code Specialist have not yielded a sufficient qualified applicant pool. It is the hope that the suggested adjustment to the salary will attract a strong applicant pool from which to fill this position.
Permit Services Administrator – adjust by 5.5% ($718.22) for a top monthly salary step of $13,776.84.
Principal Building Code Specialist – adjust by 11.0% ($1,443.44) for a top monthly salary step of $14,214.46.
Community Services & Parks Department
Following the resignation of the Deputy Director of Community Services & Parks, the Director of Community Services & Parks has reevaluated the department’s structure.
Consequently, a proposed reorganization is being put forward, which includes salary adjustments for specific classifications to better align with market trends.
Assistant Director of Community Services and Parks – adjust by 12.89% ($1,797.45) for a top monthly salary of $15,744.94.
15{{section.number}}a
4 6
7 3
Community Services Manager – adjust by 11.0% ($1,164.25) for a top monthly salary of $11,465.03.
Homeless Programs Manager – adjust by 11.0% ($1,164.25) for a top monthly salary of $11,465.03.
Park Operations Supervisor – adjust by 11.0% ($798.47) for a top monthly salary of $7,863.00.
Park Services Administrator – adjust by 11.0% ($1,283.85) for a top monthly salary of $12,642.85.
Workforce Development Administrator – adjust by 17.02% ($2,028.48) for a top monthly salary of $13,947.49.
Workforce Development Manager – adjust by 11.0% ($1,164.25) for a top monthly salary of $11,465.03. Youth Services Manager – adjust by 22.44% ($2,100.89) for a top monthly salary of $11,465.03.
Fire Department
The Ambulance Operator role is experiencing a turnover rate exceeding 20%, primarily attributed to the current low starting hourly wage of $16.79 per hour. To mitigate retention challenges, the Fire Chief suggests revising the hourly wage for this position to start at $23.00 per hour, and top at $25.00 per hour.
Glendale Water & Power
To ensure internal equity, the General Manager proposes adjusting the top step salary for the role of Assistant General Manager Utility/Finance/Risk by 30.72% ($4,690.65) for a top monthly salary step of $19,956.84.
Human Resources Department
The proposed reorganization includes adjusting salaries for crucial roles in the Department. This decision is influenced by factors like recruitment and retention challenges, market comparisons, and internal inequity. These roles are vital for executing various City and Departmental initiatives, such as enhancing employee experience, innovative recruitment methods, and reducing employee turnover.
The plan involves adjustments to four existing job classifications and the introduction of a new role: Human Resources Compliance and Operations Manager.
Benefits Manager – adjust by 25.1% ($2,736.74) for a top monthly salary step of $13,632.30.
Deputy Director of Human Resources – adjust by 14.5% ($1,949.49) for a top monthly salary step of $15,387.98.
16{{section.number}}a
4 6
7 3
Employee Health Coordinator – adjust by 20.7% ($1,587.21) for a top monthly salary step of $9,256.78.
Workers’ Compensation Administrator – adjust by 16.2% ($1,770.25) for a top step of $12,665.81.
Human Resources Compliance & Operations Manager (new classification) In recent years, the Human Resources Department has undergone operational changes while remaining committed to upholding compliance as a foundational responsibility. In response to these evolving demands, the Chief Human Resources Officer proposes the introduction of the Human Resources Compliance and Operations Manager classification with a proposed top step of $13,632.30.
This position will play a pivotal role in meticulously planning, coordinating, and overseeing compliance and operational functions within the Human Resources Department. As a key member of the Department’s management team, the position will carry the responsibility of ensuring full compliance with the new Senate Bills 616, 700, 848, 553, and Assembly Bill 2188. Moreover, they will monitor any new legislation in the pipeline and will be instrumental in generating innovative ideas and implementing programs to comply with new legislation while aiming to enhance the overall employee experience.
Public Works Department
Over the last three decades, the field of Wastewater Maintenance in California has evolved to be more technical and complex. Initially, oversight mainly involved managing field crew work and supervising staff. Now, it encompasses a broader range of duties, including environmental regulatory testing, reporting to the State Water Board, adhering to NPDES compliance, managing restaurant inspections for Fat/Oil/Grease and coordinating emergency responses to wastewater-related incidents.
With an impending retirement, two months ago we began recruiting for a qualified candidate, and the application deadline has been extended four times due to limited interest. So far, the recruitment has not attracted enough qualified applicants. Ideally, the City would like five to six qualified candidates for effective recruitment and selection.
A salary survey by revealed that Glendale’s pay for this position is $1,353 per month lower than the average in ten comparable cities. Therefore, it is recommended to align the Wastewater Maintenance Superintendent’s salary with these cities by increasing the top step pay rate by 12.88% ($1,353), for a top monthly salary step of $11,853.59.
Executive Resolution
Included in this staff report as a separate item is a Resolution for Executive-level employees, who are unrepresented. In the absence of an MOU, the Classification and Compensation Resolution appointed Executives enumerates the salary and benefit items available for Executives.
The City Manager is proposing adjustments to seven classifications. 17{{section.number}}a
4 6
7 3
Chief Information Officer
This executive-level classification, currently vacant, has been identified as 12.3% below the market average based on a recent salary survey. Since it has remained unfilled and is not covered by any employee association’s bargaining agreement, the salary range for this position has not been updated for several years. To keep the salary schedule current, it is recommended to adjust the pay rate closer to the average of comparable cities. This involves a 6.6% increase ($1,181.90), for a top monthly salary step of $19,087.
City Clerk
To align salaries more closely with those in surrounding cities, a compensation adjustment is being proposed for the position of City Clerk. A consultant-conducted salary survey for the City Clerk found that the position was ranked 11th in terms of salary among thirteen comparable cities. The adjustment will raise the top monthly salary step for the City Clerk by 10% ($1,012.50), for a top monthly salary step of $11,137.50.
Director of Library Arts & Culture
Before initiating the recruitment process for the vacant position of Director of Library Arts and Culture, a salary adjustment is proposed to attract highly qualified and competitive candidates. The adjustment would increase the top monthly salary step for this role by
8.58% ($1,474.08), for a top monthly salary step of $18,660. A salary survey by a consultant for the City revealed that Glendale’s starting pay for this role is 13.4% below average and ranked 7th in terms of salary among eleven comparable cities. The adjustment noted will move the ranking to 5th.
Director of Community Services & Parks and Chief Human Resources Officer To align salaries more closely with those in surrounding cities, proposed compensation adjustments are being considered for the positions of Director of Community Services & Parks and Chief Human Resources Officer. The adjustment will raise the top monthly salary step for the Director of Community Services and Parks by 10% ($1,792.63), for a top monthly salary step of $19,700.
Similarly, the top monthly salary step for the Chief Human Resources Officer will be adjusted by 8.53% ($1,512.90), for a top monthly salary step of $19,255. A consultant- conducted salary survey for the City found that the positions of Director of Community Services & Parks and Chief Human Resources Officer are ranked 9th in terms of salary among eleven comparable cities. The adjustment noted will move the ranking to 5th.
Director of Finance
This executive-level classification, currently vacant, has been identified as 9.7% below the market average according to a recent salary survey. Due to its unfilled status and lack of representation in any employee association’s bargaining agreement, the salary range for this role has not been updated for several years. To ensure the salary schedule remains current, it is recommended to adjust the pay rate for the Finance Director role. This adjustment would be closer to the average of comparable cities, involving a 5.8% increase ($1,075.73), for a top monthly salary step of $19,631. 18{{section.number}}a
4 6
7 3
Police Chief
To resolve the salary compaction issue between the Police Chief and the Deputy Police Chief, the City Manager proposes a 5% salary increase ($1,163.43) for the position, for a top monthly salary step of $24,432. Additionally, it is suggested to extend the longevity benefit currently available to Police Sworn Managers to the Police Chief as well.
SUMMARY
The above actions are brought forth in the form of amended Classification and Compensation resolutions, as well as a Supplemental Benefits and Compensation resolution for Executives, which are set forth in this report individually by employee group, as follows:
GCEA/Hourly/Confidential Classifications
GMA and GMA Employee Relations Exempt Classifications
Executives
Supplementary Benefits Resolution for Executives
The Resolutions also contain the new job classifications, identified by underlining.
Any costs to these personnel actions will be absorbed within the affected departments’ FY 2023-24 budget. Additionally, the above transactions do not add to the budgeted Citywide headcount.
Classification Resolution Exhibit A
Page #
19{{section.number}}a
4 6
7 3
Ambulance Operator GCEA/Hourly/Confidential Classifications 12 Assistant Director of
Community Services & Parks
GMA and GMA Employee Relations Exempt Classifications 1 Assistant General Manager
Utility/Finance/Risk
GMA and GMA Employee Relations Exempt Classifications 1 Benefits Manager GMA and GMA Employee Relations Exempt Classifications 1 Chief Human Resources
Officer
Executives 1
Chief Information Officer Executives 1
City Clerk Executives 1
Claims and Support Services
Coordinator
GMA and GMA Employee Relations Exempt Classifications 6 Community Services Manager GMA and GMA Employee Relations Exempt Classifications 4 Deputy Director Of Human
Resources
GMA and GMA Employee Relations Exempt Classifications 1 Director of Community
Services & Parks
Executives 1
Director of Finance Executives 1
Director of Library Arts &
Culture
Executives 1
Employee Health Coordinator GMA and GMA Employee Relations Exempt Classifications 6 Homeless Programs Manager GMA and GMA Employee Relations Exempt Classifications 6 Human Resources Compliance
& Operations Manager
GMA and GMA Employee Relations Exempt Classifications 3 Park Operations Supervisor GCEA/Hourly/Confidential Classifications 10 Parks Services Administrator GMA and GMA Employee Relations Exempt Classifications 2 Permit Services Administrator GMA and GMA Employee Relations Exempt Classifications 2 Police Chief Executives 1
Principal Building Code
Specialist
GMA and GMA Employee Relations Exempt Classifications 2 Wastewater Maintenance
Superintendent
GMA and GMA Employee Relations Exempt Classifications 3 Workers' Compensation
Administrator
GMA and GMA Employee Relations Exempt Classifications 3 Workforce Development
Administrator
GMA and GMA Employee Relations Exempt Classifications 3 Workforce Development
Manager
GMA and GMA Employee Relations Exempt Classifications 3 Youth Services Manager GMA and GMA Employee Relations Exempt Classifications 3 20{{section.number}}a
4 6
7 3
POTENTIAL BUDGET BALANCING STRATEGIES
Although the FY 2023-24 Budget is currently balanced with a projected minimal surplus, based on the General Fund Five-Year Forecast, the City will be faced with some potential fiscal challenges in the outer years. Recognizing these challenges, during the FY 2023-24 budget study sessions, staff brainstormed and presented potential budget balancing strategies including new revenue sources, which would be used to help fund and support a balanced General Fund budget for the upcoming years. While these potential budget balancing strategies were not accounted for in the FY 2023-24 Adopted Budget, Council requested for staff to analyze the various strategies and their outcomes and bring back a report with the initial analysis to Council.
General Guidelines for Tax Measures and Citywide Fees
As the potential budget balancing strategies include a variety of new tax measures as well as increases or implementations of new fees, below are general guidelines under the Taxpayer Protection and Government Accountability Act (TPA) for the approval of Local taxes and fees.
Type Description Council
Requirement
Voter
Requirement
Examples
General
Tax
Revenues generated can
be used for any legitimate
government purpose
4/5 Vote Majority Voter
Approval
TOT, Transfer
Tax, Business
Tax
Special
Tax
Revenues are restricted
and can only be used for
certain purposes
Majority Vote 2/3 Voter
Approval
Parcel Tax for
funding
roads, parks,
safety, etc.
Fees All government charges
are taxes unless
exempted from that
classification including
charges with reasonable
costs for providing the
services, reasonable
regulatory costs, or fines
and penalties
Majority Vote N/A Administrative
Citations,
Facility Rental
Fees, Plan
Check Fees,
Parking Fees,
etc.
21{{section.number}}a
4 6
7 3
Potential Budget Balancing Strategies Preliminary Analysis The following table is a summary of the potential budget balancing strategies and the preliminary rough revenue estimates.
Strategy
Potential Revenue
(In Millions)
Taxes
Business Tax $7.3-$9.3
Parcel Tax $3.0
Transient Occupancy Tax Increase $0.8-$2.5
Transfer Tax $12.0-$17.0
Parking Tax TBD
Fees/Misc.
Reduce 90-minute Free Parking $0.15-$0.3
Citywide Fee $2.0-$3.5
Digital Billboards and Advertising $0.35-$1.0
Ground Leasing of City Owned Properties TBD
Increase GWP Electric Transfer TBD
Total Potential Revenues $25.6-$36.6
Business Tax is a tax that cities levy on businesses for the general purpose of generating revenue to help support the essential services provided by the City. While most business taxes are based on gross receipts (specified amount per $1,000), they can also be based on a flat rate per tax period, or number of employees, devices, equipment, square footage of the area, etc. For the purposes of this analysis, staff has worked with the consultant HDL, to generate a simplified model and rate structure to determine the potential recognized revenue. The analysis utilizes a rate of $1.00/$1,000 of taxable gross receipts which could potentially generate between $7.3 million to $9.3 million. Although the preliminary model uses a simplified single rate for all businesses, the actual rate structure can be set to vary based on business category type.
Parcel Tax is based on the characteristics of a parcel such as square footage, number of units, or a flat amount, rather than a rate based on the assessed valuation of the property. Parcel taxes are usually set as a Special Tax, and thus are restricted for a specific use such as funding of libraries, parks, roads, public safety, etc. For the purposes of this analysis, staff has worked with HDL, to generate sample rate models for the City to analyze potential revenues amount. There are currently 43,700 parcels in Glendale that would be subject to the tax. Two different rate models were considered for this analysis, (1) assesses a flat dollar amount for all parcels and (2) assesses different flat amounts based on the property type.
The following are what the potential rates would look like if the City generated $3.0 million in parcel tax revenues under either model:
22{{section.number}}a
4 6
7 3
Model 1
Flat Amount all Parcels
Model 2
Flat Amount Per Parcel Type
$70 $27 – Residential Multi-Unit
$54 – Residential Single Family
$325 – Non-Residential
Transient Occupancy Tax (TOT) Increase - The City currently has a TOT rate of 12% collected from transient guests in hotels/motels. Staff conducted a preliminary analysis of the potential revenue with a rate increase. Based on the analysis, every 1% increase in the rate would possibly generate about $800 thousand in additional TOT revenues and about $2.5 million if the rate was increased to 15%, which is the highest rate currently collected in LA County by the City of Malibu.
Transfer Tax is a type of a property tax that is levied on every property at the point of sale. The current transfer tax that Glendale residents are subject to includes a City rate of $0.55 cents per $1,000 of the sales price, plus another $0.55 cents per $1,000 to the County (total of $1.10). The current Transfer tax rate applies to all properties (commercial & residential) regardless of property value, generating about $800 thousand in General Fund revenues.
The City of Los Angeles has a base rate of $4.50 per $1,000 of the sales price along with $1.10 per $1,000 to the County. In the November 2022 election, the voters of the City of Los Angeles passed Measure ULA often referred to as the “mansion tax” that imposes an additional 4% tax on sales valued at over $5 million but less than $10 million, and a 5.5% tax on the sales valued at $10 million or more. It should be noted this additional tax is from the "first dollar" on the sales price and is not imposed progressively. For example, if the sales price is $12 million, the City of Los Angeles’ new tax imposed on that transaction would be 5.5% of the total $12 million (i.e., $660,000), and not zero on the "first" $5 million, 4% on the "next" $5 million, and 5.5% on the $2 million balance. This would be in addition to the base rate of $4.50 per $1,000 to the City and $1.10 per $1,000 payable to the County.
Staff performed a “what-if” calculation by using the City of Los Angeles rate structure and applied to the City of Glendale sales for FY 2022-23, which is summarized in the table below:
Value of Property Rate # of Sales Tax
$0 to <$5 million $4.50 per $1,000 947 $5.3 million
$5 million to <$10 Million $44.50 per $1,000 16 $4.8 million $10 million & Over $59.50 per $1,000 7 $6.9 million
Total 970 $17.0 million
Santa Monica voters also approved an increase to their transfer tax in November 2022.
In addition to the County portion of $1.10 per $1,000 on all sales, their first-tier rate remained unchanged at $3.00 per $1,000 value for sales under $5 million. Their second-tier rate also remained unchanged at $6.00 per $1,000 value for sales and 23{{section.number}}a
4 6
7 3
transfers valued between $5 million and less than $8 million. The voters approved a new third tier rate that will charge $56.00 per $1,000 for sales of properties valued at $8 million or more. For example, if the sales price is $9 million, the City tax would be $504,000 ($9 Million/$1,000) x $56) in addition to the County portion of $1.10 per $1,000. Similar to the City of Los Angeles, the additional tax is from the "first dollar" on the sales price and is not imposed progressively.
Staff performed a “what-if” calculation by using the Santa Monica rate structure and applied to the City of Glendale sales for FY 2022-23, which is summarized in the table below:
Value of Property Rate # of
Sales
Tax
$0 to <$5 million $3.00 per $1,000 947 $3.6 million
$5 million to <$8 Million $6.00 per $1,000 13 $0.5 million $8 million & Over $56.00 per $1,000 10 $7.9 million
Total 970 $12.0 million
These are just examples of recent ballot measures, and transfer rates can be set to any rate structure approved by the Council for voter consideration. It should be noted that these revenues are dependent on sales volume meaning the amounts received from year to year will have greater variability.
Parking Tax is collected for the occupancy of a space in a private parking lot or facility.
To estimate the potential revenues generated through this strategy, we would need to know the revenues that are collected for all privately owned parking facilities in the City.
While not a direct comparison, City of Burbank collects $3.8 million annually on their parking tax. If so directed, staff would likely hire a consultant to complete the analysis.
Reduce 90-minute Free Parking
Public Works Department staff was requested to evaluate the financial impact of reducing the 90-minute free parking period to either 60 minutes free or 30 minutes free.
Parking transactions from 2022 were used as a baseline for the calculations. The evaluation concluded that reducing the free period to 60 minutes would likely increase parking revenue by approximately $150 thousand annually and reducing it to 30 minutes would increase the parking revenue by approximately $300 thousand annually.
Citywide Fee Study
The City is currently working with a consultant to conduct a citywide user fee study.
Based on preliminary results and staff recommendations, there could be a potential increase in revenues in the amount of $2.0 million to $3.5 million. The final fee study will be presented to Council in February 2024.
24{{section.number}}a
4 6
7 3
Digital Billboards and Advertising
The City has been approached with an opportunity to explore digital billboards and advertising. Based on initial review of all available sites and sites that would most likely be utilized, the preliminary revenue is estimated to be between $350 thousand and $1.0 million.
Ground Leasing of City Owned Properties
Staff is of the opinion that there could be a significant opportunity to utilize city-owned parking lots for redevelopment, with a focus on housing. A majority of the parking lots are located in areas that are advantageous for housing, including affordable housing.
These locations include Downtown, near Glendale Community College, and Montrose.
Each property could present the opportunity of ground leasing, which would allow the City to retain ownership of the property while generating revenue upon initial development and through future transactions. Currently, the zoning already exists on properties within Downtown, as well as those in Montrose. The properties near Glendale Community College are zoned for Special Recreation which does not allow for residential or commercial development. Staff would like to study the potential of these parking lots through the update of the Land Use Element, which would provide opportunities to analyze the potential and impacts of redeveloping these lots.
In addition to the potential for generating a significant amount of revenue for the City, the properties present a unique opportunity to create housing, and particularly affordable housing. Ground leases present an opportunity for the city to tailor the development requirements, including affordable housing, in an effort to achieve City Council’s goals and provide community benefit. For properties that do not have existing zoning, such as the Special Recreation, a special overlay district can be created that can ensure that future developments satisfy these goals. As a result of these considerations, staff would like to have the City properties appraised to identify the potential value and revenue. Staff could then later return with the full potential economic benefit, as well as the capacity of these sites for housing, affordable housing, commercial uses, and community benefit.
Increase GWP Electric Transfer
The City Charter, Section 22, Article XI, requires the transfer of 25% of the department of Glendale Water and Power’s annual operating electric revenues to the General Reserve Fund unless a lower percentage transfer is approved by the City Council. The City has historically transferred an amount less than 25% by adopting a resolution setting a lower amount. In recent years, the transfer has been set at 10% of the Electric Works estimated operating revenues. Based on the recent rate increases approved by the Council, staff has factored into the five-year forecast additional transfer revenue while holding the rate at 10%.
In regard to increasing the transfer rate, staff determined that the transfer could increase above 10%, provided it complies with the restrictions imposed by the transfer litigation. As such, staff is working with the City Attorney’s office to determine the potential increase, if any, and should be completed within the next several months. 25{{section.number}}a
4 6
7 3
STAKEHOLDERS/OUTREACH
Not Applicable
FISCAL IMPACT
The proposed adjustment to the City’s budget is $305,000, of which $230,000 is in the General Fund. These adjustments were not included as part of the FY 2023-24 adopted budget. The appropriation requests are outlined below:
Requesting Appropriation
Amount From (Account
String)
To (Account String) Funding Source
$230,000 25300-1010-000 41100-1010-GPD-
7000-P6503
General Fund
Undesignated Fund
Balance
$75,000 24216-2800-MSD 51000-2800-MSD-
6502
Cable Access Fund
ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is considered a ministerial activity and therefore, not subject to CEQA review.
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES
Alternative 1: City Council may approve the attached motions accepting the City’s Annual Comprehensive Financial Report, FY 2023-24 First Quarter Financial Status Report, the increase to the citywide authorized position count as well as giving direction on the potential budget balancing strategies. In addition, City Council may approve the attached resolutions for the establishment of classification titles and compensation, and a Resolution of Appropriation.
Alternative 2: The City Council may consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Jason Bradford, Director of Finance/Information Technology Prepared by:
Shu-Jun Li, Assistant Director of Finance
Adrine Isayan, Assistant Director of Finance
Mari Karamyan, Budget Manager
Paula Adams, Chief Human Resources Officer
26{{section.number}}a
4 6
7 3
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1) City of Glendale Annual Comprehensive Financial Report 2) Report on Internal Control over Financial Reporting
3) Communication with Those Charged with Governance