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Adopt Executive Officer’s FY 2000-2001 AQMD Budget and Work Program

SYNOPSIS: 

The Executive Officer's Budget for FY 2000-2001 represents the input over the past several months from staff, Board members, and the public. This year's process included meetings of the Budget Advisory Committee; a public hearing on February 18, 2000 to take input on the AQMD's Program Goals and Objectives; and two budget workshops, one for the public on April 18, 2000 and one for the Board on April 28, 2000. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.

COMMITTEE: 

Administrative, April 14, 2000; Board Budget Workshop, April 28, 2000, Recommended for Approval

RECOMMENDED ACTION:

1. Remove from Reserves and Designations all amounts associated with the FY 1999-2000 Budget;
   
   
2. Approve appropriations in the Major Objects for:

Salary and Employee Benefits	$58,463,994
Services and Supplies	27,086,176
Capital Outlays	1,357,000
Total	$86,907,170

3. Approve a Fund Balance of the following:

Reserve1 for Encumbrances	$9,300,000
Reserve for Inventory of Supplies	80,000
Designated for Equipment Replacement	147,000
Designated for Self-Insurance	2,000,000
Designated for Unemployment Claims	80,000
Designated for Forecasted Revenue Deficiencies	500,000
Designated for Enhanced Compliance Activities	267,700
Undesignated	10,133,325
Total	$22,508,025

¹The terms Reserve, Designated, and Undesignated are terms established by the Government Accounting Standards Board.

4. Recognize estimated revenues of $85,325,200;
   
   
5. Adopt the attached Resolution amending the Salary Resolution to effect job classification title changes in Planning, Rules and Area Sources.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Executive Officer’s Budget for Fiscal Year (FY) 2000-01 represents the input over the past several months from staff, Board members, and the public. This year’s process included meetings with the Budget Advisory Committee which is made up of representatives from the business and environmental communities; a public hearing, held on February 18, 2000, to take input on the AQMD’s FY 2000-01 Program Goals/Objectives; and two budget workshops, one held for the public on April 18, 2000 and a second for the Governing Board on April 28, 2000.

Since 1991-92 the AQMD has cut its work force by 34% and reduced its program costs by 23% ($26 million) overall. In real dollars, the AQMD budget is 40% less than the 1991-92 Budget. Over the last nine years AQMD has implemented regulatory reform to introduce market-based principles in cleaning up urban air, has streamlined aspects of permit processing, privatized to improve operational efficiency, and remained committed to treating regulated businesses fairly.

Notwithstanding these significant program changes, both regulated and voluntary emission reductions and actions to minimize fee increases on businesses has lead to an imbalance in the AQMD budget where many of its programs no longer recover their related costs. This past year the AQMD supported the legislative efforts of CAPCOA (California Air Pollution Control Officers Association) to increase Subvention funding from the State in support of local air pollution programs. This funding has not been increased in 20 years despite the tremendous growth in the State’s economy, inflation and increased population. This effort resulted in both the Senate and Assembly approving legislation doubling the statewide Subvention ($7.5 million) for FY 1999-2000. The Governor vetoed this legislation citing the air district’s ability to increase fees on regulated sources.

Proposal

This year's proposal is based on the goals and objectives presented to the Governing Board at the February 18, 2000 meeting. These goals emphasize achieving a balanced budget for future years and improving efficiency and productivity; implementation of the Board’s initiatives on Environmental Justice, Inland Empire priorities, and the Children’s Air Quality Agenda; implementation of permit streamlining actions; and carrying out a recently adopted revision to the Air Quality Management Plan.

Included in this year’s request are ten new positions targeted for Rule 461 compliance activities bringing AQMD total staffing to 772 positions. These additional positions are being funded by an increase (the second half of an increase approved in FY 1998-99) in annual operating fees on gasoline dispensing facilities to address significant excess emission problems.

Modifications to Draft Budget

Subsequent to release of the draft Budget and Board study session, select changes have been made to the original staff proposal. Specifically, the changes include the purchase of a mobile platform and monitoring equipment needed to address the environmental justice and toxics concerns in communities ($76,200), the addition of one Board member assistant to support the Chairman’s participation on the ARB board ($30,750), and a 2.5% cost of living increase for Board consultants and assistants ($10,002). The proposed Board member assistant, to support ARB-related activities, is needed to help ensure aggressive representation of AQMD Board policy positions at ARB and to coordinate communication with various stakeholders.

Resource Impacts

The proposed budget for FY 2000-2001, which includes increased salary and benefit costs related to its labor agreements, represents a $400,000 $341,000 decrease over last year’s adopted budget. Much of this decrease comes from further reductions in contract ($1.1 million) and equipment expenditures.

In order to finance this year’s Budget, I am recommending an across-the-board fee increase of 2.9% consistent with the change in the state Consumer Price Index plus an additional 8.1% on emission fees rates (for a total 11.0%) to offset the continuing decline in emission fee revenues. An adjustment to Title V permit processing hourly rates above standard fees and Hearing Board fee adjustment are also proposed. Finally, approximately $1.5 million from the Fund Balance will be required to make up for this year’s revenue shortfall.

Copies of the proposed budget have been transmitted to the Board under separate cover. Copies for public review have been available in the AQMD Library since early April. Budget abstracts are available via our web site www.aqmd.gov as an attachment to this letter or by request from the Public Information Center.

Attachments

1. Resolution amending the Salary Resolution to delete from job classification plan the manager classification of Health Effects Officer.
   
   
2. Abstract of FY 2000-2001 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.

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ATTACHMENT A

RESOLUTION NO. 00-

                            A Resolution of the South Coast Air Quality Management District Board amending the District Salary Resolution to delete from AQMD’s classification plan the manager classification of Health Effects Officer.

                            WHEREAS, the Governing Board of the South Coast Air Quality Management District exercises its duty to review and determine appropriate wages, hours, and other terms and conditions of employment provided to employees.

                            THEREFORE, BE IT RESOLVED that the Board of the South Coast Air Quality Management District, State of California, in regular session assembled on May 19, 2000, does hereby amend AQMD’s Salary Resolution to delete from AQMD’s classification plan the manager classification of Health Effects Officer.

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