BOARD MEETING DATE: June 3, 2005
AGENDA NO. 37

Adopt Executive Officer’s FY 2005-06 AQMD Budget and Work Program

SYNOPSIS:

The Executive Officer's Budget for FY 2005-06 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 4, 2005 to receive input on the AQMD's Program Goals and Objectives; and two budget workshops, one for the public held on April 21 and one for the Board held on April 29, 2005. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.

COMMITTEE:

Administrative, May 13, 2005, Reviewed
Board Budget Workshop, April 29, 2005

RECOMMENDED ACTIONS:

1. Remove from Reserves and Designations all amounts associated with the FY 2004-05 Budget;
    
2. Approve appropriations in the Major Objects for:

   Salary and Employee Benefits	$ 74,814,671
   Services and Supplies	29,558,136
   Capital Outlays	738,000
   Total	$105,110,807

3. Approve a Fund Balance of the following:

   Reserve1 for Encumbrances	$ 5,578,000
   Reserve for Inventory of Supplies	80,000
   Designated for Enhanced Compliance Activities	291,061
   Designated for Facility Refurbishing	1,500,000
   Designated for Equipment Replacement	2,000,000
   Designated for Self-Insurance	2,000,000
   Designated for Litigation/Enforcement	2,000,000
   Designated for Unemployment Claims	80,000
   Designated for Budget Stabilization2	8,000,000
   Total	$ 21,529,061
   Undesignated:
   @ 6.0% Fee Increase	$ 18,065,749

¹ The terms Reserve, Designated, and Undesignated are terms established by the
   Government Accounting Standards Board.
² Set-aside for projected budget for FY 2006-07 through FY 2007-08
 

4. Recognize estimated revenues of:

   @ 6.0% Fee Increase

   $104,259,957

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Executive Officer’s Budget for Fiscal Year (FY) 2005-06 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 4, 2005 to take input on the AQMD’s FY 2005-06 Program Goals and Objectives; and two budget workshops, one held for the public on April 21, 2005 and one held for the Governing Board on April 29, 2005.

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 34% (395 FTEs) and 7% ($7.9 million) below FY 1991-92 levels. Using inflation adjusted dollars; this year’s budget request is 40.2% less than the budget approved in FY 1991-92.

Proposal

This budget request is based on the goals and objectives presented to the Board at the February 4, 2005 meeting. These goals emphasize continued efforts to improve efficiency and productivity; implement the AQMP; implement the Board’s initiatives; implement the Fleet Rules; pursue environmental justice enhancement activities; reduce air toxics; and continue to address other priority issues.

This proposed budget request reflects a decrease of $3.4 million in expenditures from the FY 2004-05 amended budget and a $2.8 million increase over the budget adopted last June. This increase does not include salary and benefit increases, pending upcoming labor negotiations, but includes an average 29% increase in retirement contribution rates, with a proposal that the agency pickup of employees’ share of retirement costs be reduced. Six additional vacant positions have been unfunded and one position added, bringing total staffing to 768. Services and Supplies and Capital Outlays have been increased by $1.1 million (excluding debt service) to perform critical contract work and to replace several high-mileage fleet vehicles.

Resource Impacts

In order to finance this year’s Budget, staff is recommending an across-the-board fee increase option of 6.0% plus an appropriation from the Undesignated Fund Balance of $850,850. In addition, staff is proposing two other alternatives for Board consideration. These alternatives are (1) a 3.6% across-the-board increase consistent with the change in the California Consumer Price Index, plus an appropriation from the Undesignated Fund Balance of $2,279,507; and (2) a 7.5% across-the-board increase, which would begin to bring fee revenues in line with program costs, with no appropriation from the Undesignated Fund Balance. All three options entail further downsizing from the current budget.

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. Budget abstracts are available by request from the Public Information Center (909) 396-3600.

Attachments (1,061 KB)

Abstract of the FY 2005-06 Draft Budget and Draft Work Program

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