BOARD MEETING DATE: July 10, 1998 AGENDA NO. 38
PROPOSAL:
Adopt the Acting Executive Officer’s FY 1998-99 AQMD Budget and Work Program
SYNOPSIS:
The Acting Executive Officer's Budget for FY 1998-99 represents input from staff, Board members, and the public over the past several months. This year's process included meetings of the Budget Advisory Committee; a public hearing on February 13, 1998 to take input on the AQMD's Program Goals and Objectives; and two budget workshops, one for the public April 16, 1998 and one for the Board on April 23, 1998. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.
COMMITTEE:
Finance, April 3, 1998; Administrative, April 17, 1998,
Board Budget Workshop, April 23, 1998, Recommended for Approval
RECOMMENDED ACTION:
- Remove from Reserves and Designations all amounts associated with the FY 1997-98 Budget;
- Approve appropriations in the Major Objects for
Salary and Employee Benefits $54,926,320 Services and Supplies 35,603,790 Fixed Assets 1,317,280 Building Remodeling 100,000 Total $91,947,390 - Approve a Fund Balance of the following:
Reserve1 for Encumbrances $16,000,000 Reserve for Inventory of Supplies 80,000 Reserve for Clean Fuels 5,345,700 Designated for Equipment Replacement1, 928,200 Designated for Self-Insurance 2,000,000 Designated for Unemployment Claims 80,000 Designated for Forecasted Revenue Deficiencies 2,500,000 Undesignated 5,090,079 2 Total $33,023,979 Transfer Out For: Regional Transportation Agency Coalition $1,500,000 - Recognize estimated revenues of $89,600,000.
- Approve the attached resolution rescinding the authority previously granted to redeem Series 1992 Bonds (Diamond Bar) from Proceeds from the sale of the El Monte property and authorize the closing of the Debt Service Fund and transfer of Proceeds to the General Fund, Undesignated Fund Balance.
Barry M. Wallerstein, D.Env.
Acting Executive Officer
Background
State law (Health and Safety Code Section 40720) which took effect in 1994 requires that the draft budget and revenue projection for the ensuing fiscal year must be prepared by April 1. The law also requires the AQMD 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 Air Resources Board 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 36% and reduced its program costs by 17.4% ($19.7 million) overall. In real dollars, the AQMD budget is 29.8% less than the 1991-92 budget. Over the last seven years AQMD has implemented regulatory reform to introduce market-based principles in cleaning up urban air, has automated permit processing, privatized to improve operational efficiency, and remained committed to treating regulated businesses fairly.
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. For FY 1998-99 emphasis will be on achieving a balanced budget for future years and improving efficiency and productivity; implementation of the Board’s Environmental Justice Initiatives; continued implementation of Title V, and the development and implementation of new systems and programs to meet the requirements of Title III; permit registration and further permit streamlining
programs; a substantive rulemaking calendar related to reaching the goals outlined in the latest revision of the AQMP; and implementation of PM2.5 monitoring.
Consistent with the salary adjustments afforded represented employees as part of their three-year labor agreement, a two percent salary adjustment is proposed for the confidential and management class of employees effective July 13, 1998, plus an additional two percent effective December 28, 1998 for management employees only. This additional two percent is to provide some equity for the management class of employees whose salaries were frozen for FY 1993-94 and 1994-95 during a period when all other employees received a six percent salary increase.
On April 3, 1992, in recognition of the need of Board Members for various levels of administrative support, the Board established a policy to provide Board Members with discretionary funds of up to $20,000 per fiscal year to be expended for technical assistance. Thereafter, on February 10, 1995, the Board adopted improvements to the policy and modified the compensation amounts to a maximum of $25,000 per year per Board Member, except the Board Chairman whose assistant may be paid up to an amount equivalent to the annual salary of the District's classification of Executive Secretary, presently $54,052 per year.
Board members must address an ever-increasing range of complex issues related to performance of their duties, requiring increased assistance and it is appropriate to make an adjustment to compensation for the Board Member Assistants at this time. It is recommended that the compensation amount for Board Member Assistants, except the Chairman's Assistant, be increased to a maximum of $30,000 per year, and that the Board Chairman's Assistant's compensation be set at an amount up to $60,000 per year.
Resource Impacts
The proposed budget for FY 1998-99 represents a 1.8% ($1.7 million) reduction in expenditures from last year's adopted budget. No change in staffing (741 positions) has been requested for FY 1998-99 to give the agency time to assess where downsizing continues to be appropriate to reach maximum efficiency and still meet our clean air mandates. Consistent with AQMD’s three-year budget forecast and the need to more closely recover the costs of permit programs, this year’s request includes an across-the-board fee increase of 2.2% consistent with the change in the state Consumer Price Index and additional permit fee revenues of approximately $1.6 million from the proposed fee amendments included in the May 8, 1998 Board
meeting agenda item, Amend Regulation III - Fees. In addition, the Board at its workshop on April 23, 1998 directed staff to propose to (1) designate in the Fund Balance $500 thousand for enhanced compliance activities; and (2) assess an additional $1 million in fees from gasoline dispensing facilities (approximately $12 per nozzle) to fund an enhanced Rule 461 compliance program.
A. Abstract of FY 1998-99 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 at the Public Information Center. The budget abstract is available through the Internet as an attachment to this board item or through the Public Information Center (909) 396-3600.
B. Addendum to the FY 1998-99 Draft Budget and Draft Work Program to update pages reflecting changes made by the Board at the April 23, 1998 Budget workshop. The changes regard fee amendments to increase certain fees to more closely recover program costs, an enhanced gasoline dispensing facility compliance program and the recognition of the proceeds from the sale of the El Monte property to the General Fund, Undesignated Fund Balance.
C. Resolution rescinding previous authorization to redeem Series 1992 Bonds with the Proceeds from the sale of the El Monte property. Proceeds to be transferred to the General Fund.
1 The terms Reserve, Designated, and Undesignated are terms established by the Government Accounting Standards Board.
2Available for unforeseen events impacting revenue.
/ / /