BOARD MEETING DATE: May 10, 1996

AGENDA NO. 42

PROPOSAL:

Adopt the Executive Officer's FY 1996-97 AQMD Budget

SYNOPSIS:

The Executive Officer's Budget for FY 1996-97 represents the input over the past several months from staff, Board members, and the public. This year's process included several meetings of the Budget Advisory Committee; a public hearing February 9, 1996 to take input on the AQMD's Program Goals and Objectives; and two budget workshops, one for the public April 17, 1996 and one for the Governing Board May 3, 1996. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.

COMMITTEE:

Administrative, April 19, 1996, Recommended for Approval

RECOMMENDED ACTION:

1. Remove from Reserves and Designations all amounts associated with the FY 1995-96 Budget;

2. Approve appropriations in the Major Objects for

Salary and Employee Benefits $ 56,168,884

Services and Supplies 37,832,970

Fixed Assets 1,790,450

Total $ 95,792,304

3. Approve the following Fund Balances:

Reserve^* for Encumbrances $ 15,000,000

Reserve for Inventory of Supplies 80,000

Designated^* for Self-Insurance 2,000,000

Designated for Unemployment Claims 80,000

Designated for Forecasted Revenue Deficiencies 6,000,000

Designated for Equipment Replacement 4,076,500

Undesignated^* 5,011,255

Total $ 32,247,755

and

4. Recognize estimated revenues of $92,895,200.

James M. Lents, Ph.D.

Executive Officer

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Background

State law (Health and Safety Code Section 40720) which took effect last year requires that the draft budget and revenue projection for the ensuing fiscal year be prepared and made available by April 1. That law also requires the AQMD Governing Board to adopt a final proposed operating budget, including final fee schedules, prior to May 15. The approved final proposed operating budget must be submitted to the Legislature and the California ARB annually by May 15. The final proposed operating budget submitted by the AQMD becomes operative on July 1 unless, prior to July 1, the Legislature enacts an urgency statute amending or supplementing the proposed AQMD budget, or the AQMD adopts a revised final budget pursuant to the comments or formal recommendations made by the state board.

AQMD has responded to the concerns raised by businesses and the Legislature regarding the cost and effectiveness of its programs. AQMD has cut its work force by 34% and reduced its program costs by 15.2% ($17.2 million) overall. In real dollars, the AQMD budget is 24.2% less than the 1991-92 budget. Over the last five years AQMD also has implemented regulatory reform to introduce market-based principles in cleaning up urban air, has automated permit processing to provide speedy issuance of permits, privatized to improve operational efficiency, and remained committed to treating regulated businesses like valued customers.

Proposal

This year's proposal reflects AQMD's ongoing efforts to re-evaluate program activities in support of our state and federal clean air mandates. In FY 1996-97 we will continue emphasis in the areas of regulatory reform as set forth in the Business Clean Air Partnership and the subsequent Regulatory Reform Initiatives adopted by the Governing Board; implementation of the Title V program; development of the 1997 AQMPs for ozone and for PM₁₀; further streamlining of the permit program; and increased emphasis on the development and transfer of new air quality-enhancing technology.

Resource Impacts

The proposed budget for FY 1996-97 includes a further staff reduction of 4%, from 796 to 764 positions, and expenditure reduction of approximately $2.1 million over last year's approved budget. To partially offset declining revenues and increased costs for services and supplies, this year's proposal includes an across-the-board fee increase of just 1.2% pursuant Health & Safety Code Section 40523 which limits any such increase to the change in the state Consumer Price Index.

Attachments (not available)

Abstract of FY 1996-97 Draft Budget and Draft Work Program. A copy of the proposed budget has been transmitted to the Board Members separately. Copies for public review have been available in the AQMD Library and Public Information Center. The budget abstract is available through the Internet as an attachment to this agenda item or through the Public Information Center (909.396.3600).

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