South Coast Air Quality Management District

Adopt Executive Officer’s FY 2001-02 AQMD Budget and Work Program

SYNOPSIS: 

The Executive Officer's Budget for FY 2001-02 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 16, 2001 to take input on the AQMD's Program Goals and Objectives; and two budget workshops, one for the public on April 18, 2001 and one for the Board on May 4, 2001. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.

COMMITTEE: 

Administrative, April 13, 2001, Board Budget Workshop, May 4, 2001, Recommended for Approval

RECOMMENDED ACTION:

1. Remove from Reserves and Designations all amounts associated with the FY 2000-01 Budget;
   
   
2. Approve appropriations in the Major Objects for

Salary and Employee Benefits	$63,892,290
Services and Supplies	30,242,540
Capital Outlays	1,776,700
Total	$95,911,530

3. Approve a Fund Balance of the following:

Reserve1 for Encumbrances	$8,075,000
Reserve for Subvention Compliance Program2	1,579,000
Reserve for Inventory of Supplies	80,000
Designated for Equipment Replacement	1,000,000
Designated for Unemployment Claims	80,000
Designated for Revenue Deficiencies	5,000,000
Undesignated	11,902,755
Total	$30,984,455
1 The terms Reserve, Designated, and Undesignated are terms established     by the Government Accounting Standards Board.
2 Reserve to account for salary and benefit expenditures restricted by the    legislature.

4. Recognize estimated revenues of $95,911,530.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Executive Officer’s Budget for Fiscal Year (FY) 2001-02 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 16, 2001, to take input on the AQMD’s FY 2001-02 Program Goals/Objectives; and two budget workshops, one held for the public on April 18, 2001 and a second for the Governing Board on May 4, 2001.

Over the last ten 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. This year’s budget proposal reflects both staffing levels and program costs which are 30% (354 FTE) and 15% ($17 million) below FY 1991-92 levels. Using inflation adjusted dollars, this year’s budget request is 36% less than the FY 1991-92 Budget.

This past year, through the legislative efforts of CAPCOA (California Air Pollution Control Officers Association), Subvention funding from the State in support of local air pollution programs has been doubled ($7.5 million) statewide for FY 2000-2001. This funding, which is earmarked for enhanced compliance activities, had not been increased in 20 years despite the tremendous growth in the State’s economy, inflation and increased population.

Proposal

This budget request is based on the goals and objectives presented to the Governing Board at the February 16, 2001 meeting. These goals emphasize achieving a balanced budget and improving efficiency and productivity; implementation of the Board’s initiatives on Environmental Justice, Senior’s, and the Children’s Air Quality Agenda; implementation of the Fleet Rules; reduction in the permit backlog; implementing the SIP; and continuing to monitor the energy crisis.

Included in this year’s request are two new office clerical and maintenance positions in support of increased work related to customer service operations and building maintenance activities. These new positions plus the midyear increases associated with the Subvention program and elimination of the permit backlog bring AQMD staffing totals to 809 positions.

Resource Impacts

The proposed budget for FY 2001-2002 is a balanced budget proposal and represents a $594,899 (0.6%) increase over the current amended budget. This proposal includes increased salary and benefit costs related to the third year of our three-year labor agreements, increased retirement contributions as a result of retirement rate changes, additional one-time expenditures tied to reducing the permit backlog, enhanced subvention activities, and increased cost for utilities.

In order to finance this year’s Budget, I am recommending an across-the-board fee increase of 3.7% consistent with the change in the state Consumer Price Index plus specific fee rate changes (phased-in over two years) which are designed to recover the cost of AQMD programs. The proposed fee amendments which will generate approximately $3.4 million in additional fee revenues incorporate many of the recommendations from the Permit Streamlining Task Force, the 1999 Fee Structure Study, the State Auditor’s Report, and the Revenue Committee.

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 (909) 396-3600.

Attachment

A. Abstract of FY 2001-02 Draft Budget and Draft Work Program.

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