BOARD MEETING DATE: June 4, 2004
AGENDA NO. 39
Adopt Executive Officer’s FY 2004-05 AQMD Budget and Work Program
SYNOPSIS:
The Executive Officer's Budget for FY 2004-05 represents the input over the past several months from Board members, staff, and the public. This year's process included meetings of the Budget Advisory Committee; a public hearing on February 6, 2004 to receive input on the AQMD's Program Goals and Objectives; and four budget workshops, two for the public held on April 22 and May 25, 2004 and two for the Board held on April 30 and May 7, 2004. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.
COMMITTEE:
Administrative, May 14, 2004, Reviewed
Board Budget Workshops, April 30 and May 7, 2004
RECOMMENDED ACTIONS:
- Remove from Reserves and Designations all amounts associated with the FY 2003-04 Budget;
- Approve appropriations in the Major Objects for
Salary and Employee Benefits $76,741,912 Services and Supplies
25,389,919
Capital Outlays
216,000
Total
$102,347,831
- Approve a Fund Balance of the following:
Reserve1 for Encumbrances
$5,754,000
Reserve for Inventory of Supplies
80,000
Designated for Enhanced Compliance Activities 291,061 Designated for Enhanced Port Compliance 258,433 Designated for Equipment Replacement
1,000,000
Designated for Self-Insurance 2,000,000 Designated for Litigation/Enforcement 1,000,000 Designated for Unemployment Claims
80,000
Designated for Budget Stabilization2
6,000,000
Total
$16,463,494
Undesignated:
@ 1.6 Fee Increase
$12,350,882
@ 3.0 Fee Increase
$13,219,426
@ 6.0 Fee Increase
$15,080,592
- Recognize estimated revenues of:
@ 1.6 Fee Increase
$98,311,208
@ 3.0 Fee Increase
$99,179,752
@ 6.0 Fee Increase
$101,040,918
- Adjust Board Assistant/Consultant Compensation as identified under Proposal listed below.
| 1 | The terms Reserve, Designated, and Undesignated are terms established by the Government Accounting Standards Board. |
| 2 | Set-aside to cover projected budget deficits for FY 2003-04 through FY 2006-07 |
Barry R. Wallerstein, D.Env.
Executive Officer
Background
The Executive Officer’s Budget for Fiscal Year (FY) 2004-05 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; a public hearing, held on February 6, 2004, to take input on the AQMD’s FY 2004-05 Program Goals and Objectives; and four budget workshops, two held for the public on April 22 and May 25, 2004 and two held for the Governing Board on April 30 and May 7, 2004.
Over the last twelve 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 35% (409 FTEs) and 9.5% ($10.7 million) below FY 1991-92 levels. Using inflation adjusted dollars; this year’s budget request is 38.5% less than the budget approved in FY 1991-92.
Proposal
This budget request is based on the goals and objectives presented to the Governing Board at the February 6, 2004 meeting. These goals emphasize implementation of the 2003 AQMP; implementation of Administrative efficiencies for all agency functions including permit processing, source inspections and emissions reporting; implementation of the Board’s initiatives; other criteria pollutant control activities; MATES III; pursuing environmental justice activities; reducing air toxics; and continuing to address other priority issues.
Comparing the FY 2004-05 Budget request to the June 2003 adopted budget, this request represents an increase of approximately $700 thousand over last year’s adopted budget. This increase reflects the addition of $2.3 million in Salary and Benefit costs associated with labor agreements; and $2.7 million in increased retirement contributions. These increases are offset somewhat by the unfunding of 44 positions, bringing total staffing to 754, and additional expenditure cuts of $1.0 million in services and supplies accounts.
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. Consistent with the 2.0% salary adjustments afforded AQMD employees for FY 2004-05 it is recommended that the contract and hourly compensation amount for a Board Member Assistant/Consultant be similarly adjusted by 2.0%. In addition, it is recommended that previous Board policy to allow the Chairman of the Board full time use of an Executive Secretary currently on staff or continuation of the current funding level being provided to the Chairman during FY 2003-04, plus the aforementioned adjustment.
Resource Impacts
In order to finance this year’s Budget, staff is recommending specific fee adjustments related to permit processing, toxics, public notification and sample analysis to more closely recover program costs; an appropriation from of the Undesignated Fund Balance; and an across-the-board fee increase of 6% which by state law must be established as a 12% increase over two years. The Board has the discretion to not implement the second year increase based upon new information available at the time of next year’s budget adoption. Discussion and potential approval of these augmentations will occur at the June 4, 2004 Board meeting.
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 May. The Draft Budget and Work Program is available via AQMD’s web site at http://www.aqmd.gov/finn/financialinformation.htm. Abstracts are available by request from the Public Information Center (909) 396-3600.
Addendum and Abstract of the FY 2004-05 Draft Budget and Draft Work Program
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