City Council
Report
City Council Meeting: October 24, 2023
Agenda Item: 11.A
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Budget Subject: Fiscal Year 2022-23 Year-End Budget Review
Recommended Action
Staff recommends that the City Council:
1. Approve changes to the FY 2022-23 Revised Budget, as described in this report;
2. Approve changes to the FY 2023-24 Revised Budget and FY 2024-25 Approved Budget, as described in this report;
3. Adopt a Resolution of the City of Santa Monica establishing new classifications and adopting salary rates for various listed positions (Attachment A);
4. Adopt a Resolution of the City of Santa Monica establishing new classifications and adopting salary rates for listed positions in the City Attorney’s Office (Attachment B);
5. Approve the position and classification changes (Attachment C);
6. Adopt a Resolution of the City Council of the City of Santa Monica revising the City’s master fee schedule to establish new and revise certain user fees and charges (Attachment D); and
7. Authorize the City Manager to accept a grant award in the amount of $90,000 from the California Library Literacy Services (CLLS) for implementation of English as a Second Language Services (ESL) and to execute all necessary documents to accept the grant and all grant renewals;
8. Authorize the City Manager to accept a grant award in the amount of $514,145 from the U.S. Department of Justice under the 2023 Bureau of Justice Assistance FY 2023 Justice and Mental Health Collaboration Program to support the Services, Treatment & Empowerment Program (STEP), and to execute all necessary documents to accept the grant and all grant renewals;
9. Authorize the City Manager to negotiate and execute an agreement with Exodus Recovery for the STEP for the City Attorney’s Office. This recommended award is made as an exception to the competitive bidding process pursuant to Sections
2.24.250 (i) and 2.24.240 (a) and is for a term of 4 years at a total amount not-toexceed $1,500,000, with future year funding contingent on Council budget approval;
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10.Authorize the City Manager to negotiate and execute funding agreements with developers and existing businesses to provide funding to support coordination of large-scale development projects;
11.Authorize staff to amend the City’s Fiscal Policies to add the plan to replenish funding leveraged to pay for legal settlements and COVID-related losses, as described in Attachment E; and
12.Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
Summary
The Year-End Budget report is an opportunity to make time-sensitive adjustments necessary to close the City’s books for the previous fiscal year and to ensure programs continue expeditiously in the new year. Changes to the prior year budget, FY 2022-23, allow for significant Council actions to be reflected in the City’s annual financial report.
Also included in this Year-End Budget report are recommended adjustments to roll unspent FY 2022-23 funding to FY 2023-24 for the continuation of projects not completed in the prior year, as well as to program new funds from grants and other funding sources to key initiatives that advance community priorities.
A full audited accounting of the City’s financial status as of June 30, 2023, will be available in January 2024 with the publication of the Annual Comprehensive Financial Report (ACFR).
The table below summarizes the revenue and expenditure budget adjustments proposed in this staff report. The complete list of adjustments is included and detailed further in this report.
Proposed budget adjustments for Fiscal Year 2022-23
(in millions)
Expenditures
Fund Revenues Operating Capital
General Fund $ 4.00 $ 70.40 $ -
Other Funds $ 122.50 $ 174.60 $ 0.04
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Proposed budget adjustments for Fiscal Year 2023-25
Revenues (in millions)
Fund FY 2023-24 FY 2024-25
General Fund $ (3.76) $ 0.40
Other Funds $ 1.91 $ 0.09
Total All Funds $ (1.85) $ 0.49
(in millions)
FY 2023-24 Expenditures FY 2024-25 Expenditures
Fund Operating Capital Operating Capital
General Fund $ 1.19 $ - $ 0.40 $ -
Other Funds $ 0.74 $ 1.49 $ 0.15 $ -
Total All Funds $ 1.94 $ 1.49 $ 0.55 $ -
This report also includes the following:
• Recommendations to adopt a resolution to revise the City’s master fee schedule to reflect fee adjustments;
• Accepting a grant award from the California Library Literacy Services for implementation of English as a Second Language services at the Library; • Accepting a grant award from the U.S. Department of Justice to support the Services, Treatment & Empowerment Program (STEP) and approving an agreement with Exodus Recovery for STEP services;
• Approving funding agreements with developers and existing businesses that will provide funding to coordinate large-scale development projects; and • Amending the City’s Fiscal Policy to reflect the plan to replenish funds utilized to pay legal settlements and cover COVID-related losses.
Background
On June 28, 2022, the City Council adopted the City of Santa Monica’s FY 2022-23 Budget (Attachment F), the second year of the Biennial Budget first approved in June 2021. The budget was built in an environment of significant economic uncertainty and Total All Funds $ 126.50 $ 245.00 $ 0.04
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reflected no-cost operational adjustments to improve service delivery following the restructuring of operations in response to the COVID-19 pandemic. On April 11, 2023, the City Council approved midyear budget adjustments to the FY 2022-23 Revised Budget, with limited changes focusing on critical restoration of youth programs and budget corrections, given the pending extraordinary liabilities facing the City at the time (Attachment G).
On April 25, 2023, the City Council approved settlements with 124 claimants in the amount of $122.5 million, resolving all then current lawsuits against the City arising out of allegations of sexual abuse by a former City employee and volunteer.
On June 27, 2023, the City Council adopted the FY 2023-25 Biennial Budget (Attachment H). The budget continues to build on the work done in recent years to help our community recover from the COVID-19 emergency as well as make strategic investments to advance the five priority areas Council identified at its workshop on March 11, 2023.
Discussion
This report includes recommended expenditure and revenue adjustments for both FY 2022-23 and FY 2023-24. Budget changes may be made retroactively to FY 2022-23, which ended on June 30, 2023, in order to reflect significant actions that Council took during the final months of the fiscal year. These changes will further be reflected in the City’s financial statements published in the Annual Comprehensive Financial Report (ACFR). Minimal changes are proposed to the FY 2023-24 budget as the Council recently adopted the biennial budget. Instead, necessary changes include the rollover of unspent FY 2022-23 funding to FY 2023-24 to complete key projects that may have been delayed, and to program new funds from grants and other funding sources to key initiatives advancing community priorities. All changes are detailed in the sections below.
FY 2022-23 Operating Budget - Expenditure Adjustments
Staff proposes operating expenditure adjustments to the FY 2022-23 citywide budget 5 of 27
totaling $245.0 million. These are accounting adjustments between funds representing the payment of a $122.5 million legal settlement related to allegations of sexual abuse by a former employee and volunteer, as approved by City Council on April 25, 2023.
The movement of funds, done through a combination of interfund transfers, direct payments and a revenue change following accounting standards, results in a seemingly higher amount but the net transfer is ultimately $122.5 million. A simpler explanation of the funding sources is below:
• $65.3 million from General Fund reserves
• $6.5 million from the General Fund portion of the Workers’ Compensation Fund • $25 million from the Housing Trust Fund’s General Fund contributions • $5.6 million from the deferral of the FY 2022-23 Measure GSH contribution from the General Fund to the Housing Trust Fund
• $5.1 million from the deferral of the FY 2023-24 Measure GSH contribution from the General Fund to the Housing Trust Fund. Staff has determined that this transfer will be feasible, and has been budgeted in FY 2023-24, reducing the need to include it in the payback plan.
• $15 million from Boeing Gillette settlement funds held in the Water Fund, which is needed for pollution remediation over the long term.
The City is currently in litigation with its excess insurance providers demanding compensation for the settlement payments. Any funds from the insurance providers as well as proceeds from the sale of General Fund-owned properties will be used to replenish the reserves of affected funds, as further detailed in the section and attachment later in this report titled Addition to the City’s Fiscal Policies regarding the plan to replenish funding leveraged to pay for legal settlements and COVID-related losses.
Funding
Source
Department Description FY 2022-23
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Funding
Source
Department Description FY 2022-23
General Fund Non-Departmental Represents the payment from the General Fund to the General Liability
and Automobile Self-Insurance Fund
for the settlement payment of sexual
abuse claims, as approved by City
Council on April 25, 2023. This
transaction is recognized as revenue
to the General Liability and
Automobile Self-Insurance Fund, as
reflected in the revenue adjustments
table below. Those funds were then
used to make the actual claim
payments from that Fund.
This one-time payment from the
General Fund was covered by
drawing down reserves; suspending
a portion of contributions of Measure
GSH funds to affordable housing for
FY 2022-23; transferring funds from
the General Fund portion of the
Housing Trust Fund and Workers’
Compensation Fund; and transferring
unrestricted funds from the Water
Fund.
$122,500,000
General Fund Non-Departmental Represents transfer-in of unrestricted funds from the Water Fund, Housing
Trust Fund and Workers'
Compensation Fund to the General
Fund, for the settlement payment of
sexual abuse claims, as approved by
City Council on April 25, 2023.
(46,500,000)
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Funding
Source
Department Description FY 2022-23
General Fund Non-Departmental Represents a reduction to the contribution of Measure GSH funds
from the General Fund to affordable
housing for FY 2022-23 to cover the
settlement payment for sexual abuse
claims, as approved by City Council
on April 25, 2023.
(5,600,000)
Housing Trust
Fund
Non-Departmental Represents a reduction to the
contribution of Measure GSH funds
from the General Fund to affordable
housing for FY 2022-23 to cover the
settlement payment of sexual abuse
claims, as approved by City Council
on April 25, 2023.
5,600,000
Housing Trust
Fund
Non-Departmental Represents transfer-out of
unrestricted funds from the Housing
Trust Fund to the General Fund for
the settlement payment of sexual
abuse claims, as approved by City
Council on April 25, 2023.
25,000,000
SelfInsurance,
Workers'
Comp
Non-Departmental Represents transfer-out of
unrestricted funds from the Workers'
Compensation Fund to the General
Fund for the settlement payment of
sexual abuse claims, as approved by
City Council on April 25, 2023.
6,500,000
Self –
Insurance
General
Liability and
Auto Fund
Non-Departmental Represents the settlement payment
of sexual abuse claims, as approved
by City Council on April 25, 2023.
The claim payments were processed
from this Fund.
122,500,000
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Funding
Source
Department Description FY 2022-23
Water Fund Non-Departmental Represents transfer-out of
unrestricted funds from the Water
Fund to the General Fund for the
settlement payment of sexual abuse
claims, as approved by City Council
on April 25, 2023.
15,000,000
TOTAL $245,000,000
FY 2022-23 Operating Budget – Revenue Adjustments
Staff proposes a FY 2022-23 revenue adjustment of $126.5 million to the citywide budget to reflect the timing of the $4.0 million receipt of a signing bonus from the digital kiosk franchise, as well as the acceptance of the $122.5 million of settlement funds from the General Fund by the General Liability and Automobile Self Insurance Fund as detailed in the table below.
Funding
Source
Department Description FY 2022-23
General Fund City Manager Represents an adjustment to reflect the actual timing of the receipt of a one-time
signing bonus from the digital kiosk
franchise. The bonus was received in FY
2022-23 but was originally budgeted in FY
2023-24.
$4,000,000
Self –
Insurance
General
Liability and
Auto Fund
NonDepartmentalRepresents the payment of funds from the General Fund for the settlement payment of
sexual abuse claims, as approved by City
Council on April 25, 2023. The claims were
paid from the Comprehensive Self-Insurance
Fund.
122,500,000
TOTAL $126,500,000
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FY 2023-24 Operating Budget - Expenditure Adjustments – All Funds Staff proposes operating expenditure adjustments to the citywide FY 2023-24 Revised Budget totaling approximately $1.9 million, including $1.2 million in the General Fund and $0.7 million in the Other Funds. In addition, staff proposes changes to the citywide FY 2024-25 Approved Budget totaling approximately $552,000, including $399,000 in the General Fund and $153,000 in the Other Funds. The adjustments reflect the reappropriation of unspent funds to FY 2023-24 for projects initiated and funded in FY 2022-23 but not completed prior to the end of the fiscal; and FY 2023-25 adjustments for recent grant awards and projects funded by development fees, transportation impact fees and settlements and judgments obtained from the Consumer Protection Unit. All changes are detailed below.
Reappropriation of FY 2022-23 unspent funds
Funding
Source
Department Description FY 2023-24
General
Fund
City Council Reappropriation of unspent FY 2022-23
Councilmember travel funds to be allocated to FY
2023-24 Council discretionary funds, as approved
by City Council on June 27, 2023.
$9,762
General
Fund
City Manager Reappropriation of the remaining unspent FY 2022-23 funds earmarked to promote Language
Access. The funds will be used for the translation
of many of the City’s customer-facing documents
into Spanish, the interpretation of about 50
community listening sessions in September and
other items as part of the Citywide Equity Plan.
55,120
General
Fund
City Manager Reappropriation of unspent FY 2022-23 funds to cover the one-time cost to upgrade the VoicePrint
system that records Public Safety and 911
Dispatch phone calls in real-time.
114,265
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Funding
Source
Department Description FY 2023-24
General
Fund
City Manager Reappropriation of unspent FY 2022-23 funds to complete an update to the City’s Local Hazard
Mitigation Plan, which is required by the federal
government in order for the City to be eligible for
various disaster mitigation assistance programs.
The contract with the consultant was not executed
until the end of FY 2022-23.
48,500
General
Fund
Finance Reappropriation of unspent FY 2022-23 funds to
fund projects currently in progress, including
business license tax modernization consulting
services, strategic advisory and communication
services for potential ballot measures, disparity
study to inform Diversity Equity and Inclusion in
the City’s procurement practices, and to acquire a
website-based solution to build an online
interactive budget document.
403,860
General
Fund
Housing and
Human
Services
Reappropriation of unspent FY 2022-23 Human
Services Grant Program (HSGP) funds to be
utilized as a one-time flexible funding source to
assist households at imminent risk of
displacement, or awarded via Notice of Funding
Availability to current grantees serving HSGP
Priority Populations.
130,598
General
Fund
Information
Services
Reappropriation of unspent FY 2022-23 funds from
various departments to pay their share of a oneyear renewal of the Cornerstone Learning software platform, which is used to deliver online training
courses to City staff. Also includes funds for
TabletCommand for integration development for
the Public Safety CAD project.
27,051
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Funding
Source
Department Description FY 2023-24
General
Fund
NonDepartmentalReappropriation of unspent FY 2022-23 funds, to cover costs exceeding original budget estimates to
recruit a team of clinicians to adequately staff the
Therapeutic Transport Program. This would be
one-time funding to augment the $400,000 initial
appropriation from CARES Act funding.
64,000
General
Fund
NonDepartmentalReappropriation of unspent FY 2022-23 funds for costs associated with electrical repairs to the
Downtown Santa Monica ice skating rink. This
transaction reflects the payment, in FY 2023-24, of
work initiated in FY 2022-23 but completed in FY
2023-24.
103,000
Airport
Fund
Public Works Reappropriation of unspent FY 2022-23 funds to complete an update to the City’s Local Hazard
Mitigation Plan, which is required by the federal
government in order for the City to be eligible for
various disaster mitigation assistance programs.
28,000
Cemetery
Fund
Public Works Reappropriation of unspent funds earmarked in FY 2022-23 for the purchase of Oddfellow plots. The
purchase was not completed in FY 2022-23 due to
the time required to negotiate the purchase
agreement and the level of property acquisition
expertise required.
$87,500
TOTAL $1,071,656
Adjustments for use of funds from grants and other funding sources Funding
Source
Department Description FTE
FY
2023-24
FY
2024-25
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Funding
Source
Department Description FTE
FY
2023-24
FY
2024-25
General Fund Community
Development
Represents the addition of
1.0 FTE Deputy Director -
Special Projects to lead City
efforts to implement highprofile projects and ensure
that the City's obligations are
completed in a timely and
effective manner. The FY
2023-24 estimated cost is
prorated to 8 months. The
City has secured a
commitment from parties with
developer agreements to fund
the position in its entirety
through completion of the
projects.
1.0 $185,457
$289,402
General Fund Library Reflects the addition of 1.0
limited-term Library Literacy
Program Assistant position to
initiate English as a Second
Language (ESL) services for
the Library. The position
funding comes from annual
grant funds from California
Library Literacy Services
(CLLS) grants awarded to
the Library. The position will
be limited-term for three
years to coincide with the
term of the most recent
$90,000 grant award from the
CLLS.
1.0 90,000
115,200
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Funding
Source
Department Description FTE
FY
2023-24
FY
2024-25
General Fund NonDepartmentalRepresents a transfer-in from the Miscellaneous Grants
Fund to reimburse the
General Fund for the cost of
a 1.0 limited-term Library
Literacy Program Assistant
position funded by the CLLS
funds.
(90,000)
(115,200)
Miscellaneous
Grants Fund
NonDepartmentalRepresents a transfer-out
from the Miscellaneous
Grants Fund to reimburse the
General Fund for the cost of
a 1.0 limited-term Library
Literacy Program Assistant
position funded by the CLLS
funds.
90,000
115,200
General Fund Department of
Transportation
Represents funding for the
costs of adding a
Transportation Management
Coordinator and deleting a
Transportation Management
Specialist, funded by
Transportation Impact Fee
funds in the Special
Revenue Source Fund. The
staffing change will enable
the department to effectively
address mandated policy
work related to changes
parking, transportation, and
housing policies at the
regional and state level.
24,225
37,422
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Funding
Source
Department Description FTE
FY
2023-24
FY
2024-25
General Fund NonDepartmentalRepresents the transfer-in of funds from the Special
Revenue Source Fund to the
General Fund, to cover the
costs of adding a
Transportation Management
Coordinator and deleting a
Transportation Management
Specialist.
(24,225)
(37,422)
Special
Revenue
Source Fund
NonDepartmentalRepresents the transfer-out
of funds from the Special
Revenue Source Fund to the
General Fund, to cover the
costs of adding a
Transportation Management
Coordinator and deleting a
Transportation Management
Specialist.
24,225
37,422
General Fund City Attorney Represents staffing changes
to address ongoing
operational challenges and
align existing duties with job
classifications that are more
appropriate to the legal field,
department operations, and
Council priorities. The FY
2023-24 estimated cost is
prorated to 6 months. The
changes are funded from
settlements and judgments
obtained from the Consumer
Protection Unit.
53,151 109,473
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Funding
Source
Department Description FTE
FY
2023-24
FY
2024-25
Miscellaneous
Grants Fund
City Attorney Represents a grant award
from the U.S. Department of
Justice to further support the
STEP Court which aims to
reduce the number of
individuals experiencing
homelessness in Santa
Monica while also reducing
recidivism and resourceutilization. This grant will fund the agreement with Exodus
Recovery which will help
develop the STEP Court and
deliver services.
514,145
TOTAL 2.0 $866,978 $551,497
FY 2023-25 Operating Budget - Revenue Adjustments – All Funds Staff proposes revenue adjustments resulting in a net reduction of $1.9 million to the citywide FY 2023-24 Revised Budget, primarily from the $4.0 million reduction in the General Fund to reflect the timing of the receipt of the signing bonus for the digital kiosk franchise, which was received in FY 2022-23. The reduction is partially offset by revenue increases from a recent grant award in the Library that is funding a position; revenue from development fees to pay for a position in the Community Development Department; and one time revenue to the Vehicle Management fund reflecting the purchase of replacement vehicles from the Resource Recovery & Recycling Fund and a vehicle in the Fire Department; grant revenue from the U.S. Department of Justice to further support the STEP Court; and funds from settlements and judgments obtained from the Consumer Protection Unit to fund position changes in the City Attorney’s Office. Additionally, staff proposes revenue adjustments to the citywide FY 2024-25 Approved Budget totaling approximately $489,000, including $399,000 in the General 16 of 27
Fund and $90,000 in other Funds. All changes are detailed below.
Funding
Source
Department(s
)
Description
FY
2023-24
FY
2024-25
General Fund Community
Development
Represents the addition of 1.0 FTE
Deputy Director – Special Projects
to lead City efforts to implement
high-profile projects and ensure
that the City’s obligations are
completed in a timely and effective
manner. The FY 2023-24
estimated cost is prorated to 8
months. The City has secured a
commitment from parties with
developer agreements to fund the
position in its entirety through
completion of the projects.
$185,457
$289,40
2 General Fund City Manager Represents a revenue reduction adjustment to reflect the actual
timing of the receipt of one-time
signing bonus from the digital kiosk
franchise. The bonus was received
in FY 2022-23 but was originally
budgeted in FY 2023-24.
(4,000,000)
General Fund City Attorney Represents revenue from
settlements and judgments
obtained by the Consumer
Protection Unit, to fund staffing
changes in the City Attorney’s
Office as described in the
expenditure changes table above.
53,151
109,473
Miscellaneou
s Grants
Fund
City Attorney Represents a grant award from the
U.S. Department of Justice to
further support the STEP Court
514,145
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Funding
Source
Department(s
)
Description
FY
2023-24
FY
2024-25
which aims to reduce the number
of individuals experiencing
homelessness in Santa Monica
while also reducing recidivism and
resource-utilization. This grant will
fund the agreement with Exodus
Recovery which will help develop
the STEP Court and deliver
services.
Miscellaneou
s Grants
Fund
NonDepartmentalRepresents a transfer-out from the
Miscellaneous Grants Fund to
reimburse the General Fund for the
cost of a 1.0 limited-term Library
Literacy Program Assistant
position. The position will be
funded by grant revenue in the
Miscellaneous Grants Fund from
annual California Library Literacy
Services (CLLS) grants, including
the new $90,000 grant award.
90,000
90,000
Vehicle
Management
Fund
Public Works Reflects one-time revenue related
to a Capital Improvement Program
appropriation to the Vehicle
Management Fund for the
purchase of replacement vehicles
for Resource Recovery &
Recycling and a vehicle for the
new EMS chief.
1,305,291
TOTAL $(1,851,956
)
$488,87
5 FY 2022-23 and FY 2023-24 Capital Improvement Program Budget Adjustments 18 of 27
Proposed Capital Improvement Program budget adjustments result in a $36,171 impact to the FY 2022-23 budget and approximately $1.5 million increase to the FY 2023-24 budget, as detailed below.
Funding
Source Account Name Description
FY
2022-23
FY
2023-24
Cemetery
Fund
Rooftop Fall
Protection
Reflects funding from the
Cemetery Fund for additional
scope that was needed to
implement the OSHA compliant
fall protection plan for cemetery
facilities.
$36,171 $ -
General
Fund
Fleet Vehicle
Replacement
Program
Reflects budget transfer from the
Fire Apparatus Replacement
project to fund vehicle for EMS
Fire Chief and incorporate into
Vehicle Replacement Program.
62,056
General
Fund
Fire Apparatus
Replacement
Project
Reflects budget transfer from the
Fire Apparatus Replacement
project to fund vehicle for EMS
Battalion Chief and incorporate
into Vehicle Replacement
Program.
(62,056)
Cemetery
Fund
Mausoleum and
Cemetery
Maintenance
Project
Reflects funds for maintenance
projects at the Mausoleum and
Cemetery, including damage
prevention to the historical
artwork and stained-glass
windows.
250,000
Resource
Recovery &
Recycling
Fleet Vehicle
Replacement
Program
Reflects funds for the purchase of
replacement vehicles in Resource
Recovery & Recycling.
1,243,235
Total $36,171 $1,493,235
Personnel Changes
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The combined staffing adjustments in all funds result in a net increase of 2.0 FTE positions in the General Fund. The new positions include a 1.0 FTE limited-term Library Literacy Program Assistant funded by the annual California Library Literacy Services grants and a permanent 1.0 FTE Deputy Director-Special Projects to lead City efforts to implement high-profile projects, funded by developer fees. Attachment C details all staffing adjustments, including add/delete of positions with net zero cost impact, those funded by the reallocation of funds within departments’ current budgets and those covered from settlements and judgments obtained from the Consumer Protection Unit.
Attachments A and B comprise Salary Resolutions detailing new classifications and salary rates.
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Council Discretionary Funds
As is customary at year-end, staff reconciled all unspent balances in previously allocated Council Discretionary Funds. All accounts where programming was completed or the funds were no longer needed had their balances returned to the main Council Discretionary Funds account to be reappropriated for FY 2023-24, as provided in the June 2023 Budget Resolution. With this change, the amount now unprogrammed for FY 2023-24 is $87,920.
City Fee Adjustments
Staff is also presenting minor adjustments to the Master Fee Resolution (Attachment D).
Community Development
City Planning in Exhibit A of the Master Fee Resolution Staff is requesting the addition of the Zoning Conformance Review—Outdoor Commercial Uses on Private Property fee to the Master Fee Resolution that was previously authorized by Resolution 11509 (CCS) on March 14, 2023. This fee was inadvertently omitted from the prior Master Fee resolution and is now being included.
Building and Safety in Exhibit B of the Master Fee Resolution Staff proposes administrative corrections to the fee schedule for the Building and Safety division. The fees were inadvertently included in the 2023 fee schedule. The corrected fees, as reflected in Attachment D, align with a fee study conducted in May 2021, represent full cost recovery, and reflect the City’s current practices.
Staff recommends removing the base fees for:
• Plan review of Interior Demolition exceeding 10,000 square feet (formerly included as $723.51) and
• Combination building permit for Commercial/Industrial – complete building (and attached parking) of more than 10,000 square feet (formerly included as $100.79).
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Specifically, separate base fees should not be collected. The same base fee is collected by the City for interior demolition permits and commercial/industrial permits irrespective of size. These base fees are then supplemented with fees calculated on the square footage of the building at issue.
Staff also recommends removing the following hourly rates for Engineering Report Review and replacing them with “Actual Cost”:
• Seismic Retrofit Plan Review – Consultant (formerly included as $233.30/hr.) and • Seismic Retrofit Peer Review – Consultant (formerly included as $233.30/hr.) The City passes on the actual costs for seismic retrofit plan reviews conducted by a consultant and does not charge an hourly fee.
Department of Transportation
Finance and Administration Services in Exhibit K of the Master Fee Resolution Staff recommends the addition of six new hourly rates for the Finance and Administration Services Division to align with other City event fees and to ensure full cost recovery for labor associated with various community and City events. The work associated with events impacts bus service and transit operations, as well as the ability to deliver reliable service to the public. Staff responsibilities during events may include relocating bus routes; establishing alternative bus routes and temporary bus stops; preparing and disseminating public communications and installing signage for route and bus stop changes; other administrative tasks; and providing road supervision and support for the duration of events.
New Fee Proposed Fee
Accountant II $120.69 per hour
Community Engagement & Customer Experience Manager $181.02 per hour Community Engagement Administrator $133.71 per hour
Motor Coach Operator Supervisor $110.43 per hour
Transportation Marketing Coordinator $106.90 per hour
Transit Operations Superintendent $142.29 per hour
Acceptance of Grant Awards
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Acceptance of English as a Second Language Services Grant The Santa Monica Public Library received a third grant, English as a Second Language Services (ESL), from the California Library Literacy Services (CLLS). The $90,000 award is for FY 2023-24, which begins in year 3 of the 5-year program. The Library will receive comparable amounts in years 4 and 5 (FY 2024-25 and FY 2025-26). These funds, along with the other two existing CLLS grants, Adult Literacy and Family Literacy, will be used to fund a 3-year limited-term Library Literacy Program Assistant position.
ESL services will include one-on-one tutoring and will be another component of the Library’s Literacy Education for Adults & Families (LEAF) program. LEAF is a free program available to all ages and provides a variety of literacy services. This position will assist in the development of this new service and provide ongoing support to learners, tutors and families, and will serve to bridge the gap between all LEAF services.
Acceptance of FY 2023 Justice and Mental Health Collaboration Program Grant The City Attorney’s Office received a grant award of $514,145 from the U.S.
Department of Justice to further support the STEP Court. The goal of STEP Court is to reduce the number of individuals experiencing homelessness in Santa Monica, while also reducing recidivism and resource-utilization. STEP Court will be a prosecutor-led, collaborative diversion court, which will connect qualifying individuals with housing assistance and mental health and/or substance abuse treatment. This grant will help fund the agreement with Exodus Recovery, which will provide resource navigators that will meet with program participants in real time, assisting them in accessing available resources, including but not limited to obtaining identification, mental health and substance abuse treatment, housing voucher applications, and transportation to regional housing authorities.
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Contract Approvals
Exodus Recovery
Staff seeks approval to execute a four-year agreement with Exodus Recovery to support the City’s efforts to reduce homelessness, in an amount not to exceed $1,500,000. Exodus is a regional mental health and substance use service provider and has been working with the City Attorney’s Office to develop the STEP Court and start delivering services. The agreement is funded with various grant funds, including the $514,145 awarded by the U.S. Department of Justice as well as a portion of the HOMEARP funds that the U.S. Department of Housing and Urban Development awarded the City in 2021. The City Attorney’s Office continues to seek additional funding sources for the STEP Court and to ensure the contract with Exodus can accommodate additional sources of funding should they become available in the future, staff recommends a not to exceed amount of $1,500,000.
Previously, on May 9, 2023, as part of the Annual Interdepartmental Update on Addressing Homelessness, the City Council authorized the City Manager to negotiate a 4-year agreement with Exodus Recovery in an amount not-to-exceed $400,000 for the STEP Court. In accordance with the local emergency on homelessness that was declared by the City Council on February 14, 2023, and extended on May 9, 2023, the award was made as an exception to the competitive bidding process pursuant to SMMC Sections 2.24.050(i) and 2.24.240(a). No agreement has been executed to date; therefore, the City Attorney’s Office seeks to execute a new agreement with an increased not-to-exceed amount.
Developer Agreements
Staff seeks approval to execute agreements with developers and existing businesses to provide funding to support the Deputy Director – Special Projects position within the Community Development Department. The Deputy Director – Special Projects position would ensure that high profile projects, primarily development agreements, are completed with minimal delays. The position will create a primary point of contact for staff and applicants, creating increased accountability and comprehensive feedback.
Development agreement projects contribute to maintaining a thriving community 24 of 27
through significant investment in the city such as affordable and market rate housing, cultural facilities, public art, historic preservation, local hiring programs, internship programs, community meeting space availability, sustainable design features, open space programming, enhanced tax revenues, and development impact fee contributions for affordable lodging, early childhood initiatives, and economic equity/opportunity initiatives.
Addition to the City’s Fiscal Policies regarding the plan to replenish funding leveraged to pay for legal settlements and COVID-related losses
As noted earlier in this report, the General Fund paid the General Liability and Automobile Self Insurance Fund $122.5 million in FY 2022-23 to pay settlements with 124 claimants, resolving all then current lawsuits against the City arising out of allegations of sexual abuse by a former City employee and volunteer. Given the General Fund’s reduced reserve levels, additional available funds were leveraged from other funds, with the intent to replenish the funds over time. In addition, on May 5, 2020, responding to the revenue losses the City was experiencing during the COVID pandemic, Council approved the retention of a portion of the FY 2020-21 Measure GSH contribution from the General Fund to the Housing Trust Fund, in the amount of $5.9 million. During the Budget Adoption Council meeting on June 27, 2023, a motion was passed asking staff to return to Council with a payment plan that would commit the City to replenishing the impacted funds, namely the Housing Trust Fund, Water Fund, and Workers’ Compensation Fund. This is an opportunity to include the deferred FY 2020- 21 Measure GSH amount in the plan as well. The attached (Attachment E) recommended addition to the City’s Fiscal Policies provides the requested plan. 25 of 27
Past Council Actions
Meeting Date Description
06/28/22
(Attachment F)
Adoption of the Second Year of the FY 2021-23 Biennial Budget, Adoption of the First Year and Approval of the Second Year of the FY 2022-24 Biennial Capital Improvement Program Budget
04/11/23
(Attachment G)
Fiscal Year 2022-23 Midyear Budget
06/27/23
(Attachment H)
Adoption of the First Year and Approval of the Second Year of the FY 2023-25 Biennial Budget
Environmental Review
The proposed budget adjustments for FY 2022-23 and FY 2023-25 are categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The budget adjustments are covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA. 26 of 27
Financial Impacts and Budget Actions
Recommended FY 2022-23 Revised Budget adjustments result in:
• Revenues: $4.0 million increase in the General Fund and $122.5 million increase in all Other Funds, for a combined $126.5 million net increase to the citywide revenue budget.
• Expenditures: Approximately $70.4 million net increase in the General Fund and $174.6 million increase in all Other Funds, for a net combined $245.0 million increase throughout the citywide operating and capital expenditure budget.
Recommended FY 2023-25 Revised Budget adjustments result in:
• Revenues:
o FY 2023-24 - Approximately $3.8 million reduction in the General Fund and $1.9 million increase in all Other Funds, for a combined $1.9 million net reduction to the citywide revenue budget.
o FY 2024-25 - Approximately $0.4 million increase in the General Fund and $0.1 million increase in all Other Funds, for a combined $0.5 million net increase to the citywide revenue budget
• Expenditures:
o FY 2023-24 - Approximately $1.2 million increase in the General Fund and $2.2 million increase in all Other Funds, for a combined $3.4 million increase to citywide operating and capital expenditure budget. o FY 2024-25 - Approximately $0.4 million increase in the General Fund and $0.2 million increase in all Other Funds, for a combined $0.6 million increase to citywide operating expenditure budget.
• FTEs: The combined staffing adjustments result in a net increase of 2.0 permanent FTE positions in the General Fund for FY 2023-25. 27 of 27
Prepared By: Oscar Santiago, Budget Manager
Approved Forwarded to Council
Attachments:
A. Attachment A-Salary Resolution
B. Attachment B-Salary Resolution
C. Attachment C-Position and Classification Changes
D. Attachment D-Master Fees Resolution
E. E - Fiscal Policy Revision
F. Attachment F-June 28, 2022 Budget Staff Report (Web Link) G. Attachment G-April 11, 2023 Budget Staff Report (Web Link) H. Attachment H-June 27, 2023 Budget Staff Report (Web Link) I. PowerPoint Presentation