The City of Irvine is pleased to present the Proposed Fiscal Year 2019-2021 Two-Year Budget and corresponding Proposed Five-Year Strategic Business Plan.
C I T Y O F I R V I N E , C A L I F O R N I A
2019-2021 BUDGET
PROPOSED C I TY MANAGER ’ S
IRVINE CITY OFFICIALS
Donald P. Wagner Mayor
Christina L. Shea Mayor Pro Tem
Melissa Fox Councilmember
Farrah N. Khan Councilmember
Anthony Kuo Councilmember
City Manager/Director of Orange County Great Park John A. Russo
Assistant City Manager............................................................................ Marianna Marysheva City Attorney.......................................................................................... Jeff Melching City Clerk................................................................................................Molly M. Perry Director of Community Development....................................................Pete Carmichael Director of Community Services............................................................Laurie Hoffman Director of Financial Management & Strategic Planning......................Kristin Griffith Director of Human Resources & Innovation . ........................................Jimmee Medina Director of Public Safety. .......................................................................Mike Hamel Director of Public Works........................................................................Mark Steuer Director of Transportation................ .....................................................Mark Linsenmayer
TABLE OF CONTENTS
FY 2019-21 PROPOSED BUDGET
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FY 2019-21 Proposed Budget
TABLE OF CONTENTS
TABLE OF CONTENTS
City Manager’s Budget Message ............................................................................................ 9
Staying Fiscally Responsible........................................................................................................................ 11 Strategic Priorities....................................................................................................................................... 14 Investing in the City’s Essential Infrastructure……… ................................................................................... 16 Planning Ahead: Great Park Development ................................................................................................. 17
Introduction ........................................................................................................................ 19
User’s Guide to the Budget......................................................................................................................... 21 Budget Process Summary ........................................................................................................................... 23 City Organizational Chart ............................................................................................................................ 31 General Contacts......................................................................................................................................... 32 Advisory Commissions ................................................................................................................................ 33 Government Finance Officers Association (GFOA) Award.......................................................................... 34 California Society of Municipal Finance Officers (CSMFO) Award.............................................................. 35
Community Profile .............................................................................................................. 37
Revenue and Expenditure Assumptions ............................................................................... 49
Key Indicators.............................................................................................................................................. 52 Revenues..................................................................................................................................................... 55 Expenditures ............................................................................................................................................... 65
Budget Summary................................................................................................................. 73
Department Summaries.............................................................................................................................. 76 General Fund Resources ............................................................................................................................. 80 General Fund Expenditures......................................................................................................................... 81 Charts and Summary Tables ....................................................................................................................... 82
Personnel and Staffing......................................................................................................... 95
Position Increases and Decreases............................................................................................................... 99 Full-Time Personnel by Classification ....................................................................................................... 101
City Manager’s Office .........................................................................................................109
City Council ............................................................................................................................................... 114 City Manager............................................................................................................................................. 117
City Clerk............................................................................................................................121
City Clerk ................................................................................................................................................... 126
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TABLE OF CONTENTS
Financial Management & Strategic Planning .......................................................................131
Administration .......................................................................................................................................... 136 Fiscal Services............................................................................................................................................ 139 Budget and Strategic Business Planning ................................................................................................... 142 Purchasing................................................................................................................................................. 145
Human Resources & Innovation..........................................................................................149
Human Resources ..................................................................................................................................... 154 Information Technology............................................................................................................................ 158
Community Development...................................................................................................161
Administration .......................................................................................................................................... 166 Building and Safety Services ..................................................................................................................... 169 Neighborhood Services ............................................................................................................................. 172 Planning and Development Services......................................................................................................... 175
Community Services ...........................................................................................................179
Recreation Programs & Special Events ..................................................................................................... 184 Seniors....................................................................................................................................................... 187 Child, Youth & Family................................................................................................................................ 190 Athletics .................................................................................................................................................... 193 Aquatics..................................................................................................................................................... 196 Fine Arts .................................................................................................................................................... 199 Animal Care............................................................................................................................................... 202 Transportation .......................................................................................................................................... 205 Open Space & Agriculture Programs ........................................................................................................ 208 Administration & Business Support Services ............................................................................................ 211
Public Safety ......................................................................................................................215
Administration .......................................................................................................................................... 220 Police Operations...................................................................................................................................... 224 Support Services ....................................................................................................................................... 228
Public Works ......................................................................................................................233
Administration .......................................................................................................................................... 238 Environmental Programs .......................................................................................................................... 241 Development Engineering ........................................................................................................................ 244 Fleet Services ............................................................................................................................................ 247 Landscape Maintenance ........................................................................................................................... 250 Project Management ................................................................................................................................ 253 Signal Maintenance................................................................................................................................... 256 Street and Right-of-Way Maintenance ..................................................................................................... 259 Facilities Maintenance .............................................................................................................................. 262
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Transportation ...................................................................................................................265
Administration .......................................................................................................................................... 270 Traffic Management ................................................................................................................................. 273 Transportation Planning & Project Development..................................................................................... 276 Active Transportation Planning ................................................................................................................ 279 Transportation Review & Analysis ............................................................................................................ 282
Non-Departmental .............................................................................................................285
Special Funds......................................................................................................................297
Special Funds Introduction ....................................................................................................................... 301 General Reserve Funds ............................................................................................................................. 305 Special Revenue Funds.............................................................................................................................. 315 Capital Projects Funds............................................................................................................................... 340 Internal Service Funds............................................................................................................................... 357
Capital Improvement Program............................................................................................363
CIP Introduction ........................................................................................................................................ 365 Five Year CIP.............................................................................................................................................. 374 Unfunded CIP Projects .............................................................................................................................. 377 Active CIP Projects .................................................................................................................................... 380 CIP Project Descriptions............................................................................................................................ 389
Strategic Business Plan .......................................................................................................449
Strategic Technology Plan...................................................................................................467
Contracts............................................................................................................................479
Financial Policies ................................................................................................................511
Budget Guidelines ..............................................................................................................521
Glossary .............................................................................................................................537
Acronyms .................................................................................................................................................. 539 Terms ........................................................................................................................................................ 545
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FY 2019-21 Proposed Budget
CITY MANAGER’S BUDGET MESSAGE
FY 2019-21 PROPOSED BUDGET
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FY 2019-21 Proposed Budget
CITY MANAGER BUDGET MESSAGE
TO:
HONORABLE MAYOR AND CITY COUNCIL
FROM:
JOHN A. RUSSO, CITY MANAGER
I am pleased to present to you the City of Irvine’s Proposed Fiscal Year (FY) 2019- 2021 Two-Year Budget and corresponding Proposed Five-Year Strategic Business Plan. The Biennial Budget implements the City Council’s priorities and strategic goals, and provides a long-term financial plan continuing the delivery of outstanding services to the community. The two-year budget in the context of a five-year plan is a completely new process for the City, bringing enhanced fiscal transparency and accountability through greatly increased public participation and
more time for budget deliberations. The Five-Year Plan sets forth the direction of the City with input from employees, the community, businesses, and our commissions, as well as sustains our exceptional level of service and reflects top policy priorities of the City Council. Staying Fiscally Responsible: Addressing Financial Challenges Ahead Irvine has enjoyed robust growth since the recession. Revenues have grown the last five years on average 6 percent, but the revenue growth will taper in the next five years. Furthermore, as the City continues to grow, infrastructure needs and operations continue to expand with the addition of new facilities, staffing, and roadways to meet the needs of the developing community. Deferred maintenance impacts are becoming obvious, and must be appropriately funded. As a result of moderate revenue growth coupled with continued increases in expenditures, which are largely the result of State decisions outside of the City’s control, significant shortfalls are projected for the next five fiscal years in the General Fund.
FY 2019-2024 General Fund Baseline Assumptions
Proposed Budget 2019-2020
Proposed Budget 2020-2021
Forecast 2021-2022
Forecast 2022-2023
Forecast 2023-2024
GENERAL FUND Total Revenues and Transfers-In Total Expenditures and Transfers-Out
203,703,462 216,820,950
208,054,556 224,688,767 (16,634,211)
213,933,682 226,161,027 (12,227,345)
219,550,312 235,922,660 (16,372,348)
226,790,359 239,971,679 (13,181,320)
Baseline Budget Deficit (13,117,488)
FY 2019-21 Proposed Budget
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CITY MANAGER BUDGET MESSAGE
The City of Irvine is proud to be ranked number one in the nation in fiscal strength by Truth in Accounting, and the City’s leadership has spent the last several months working to implement the fiscal discipline required to ensure long-term fiscal sustainability of our great City. The Proposed Biennial Budget is structurally balanced as a result of a collaborative effort of management, employees, business partners, and the community in meeting significant financial challenges initially projected in the five-year forecast. The baseline forecast indicated a General Fund annual shortfall of $12-16 million over the five- year period. To balance the gap with sustainable measures, City management and staff first took steps to tighten our belts, reduce costs, and find more efficient ways to provide services. As a result, expenditure reductions accounted for over $11 million of balancing measures annually. Revenue measures, such as fee increases and reinstating previously approved fees, add up to $2.6 million. The proposed balancing measures are listed below, and reflect the feedback received from residents at four community meetings. These meetings, held throughout the month of March 2019, were the City’s first ever attempt at both informing our constituents about the City’s finances and seeking input on spending priorities before the budget is proposed. We heard the community loud and clear: our residents and businesses want a safe, clean, well maintained City that continues to support our schools. To create a sustainable, structurally balanced, and priority driven budget, we reviewed staffing levels on a case by case basis, proposed reductions in vacancies with remaining staff doing more, shifted existing personnel to high demand areas, and leveraged technology to increase efficiencies. These measures are expected to save the City $2.4 million annually. Citywide supplies, business expenses, and training expenditures were reviewed and assessed, and efficiencies resulting in cost savings were put in place, saving $0.4 million in General Fund resources annually. Staff reviewed and renegotiated contracts with vendors and service providers resulting in $2.5 million of annual cost savings. We have been able to utilize $3.3 million in special funds, such as traditional gas tax funds to address rising landscape maintenance costs for City streetscapes and medians. Special funds will be utilized for front line law enforcement equipment, supplies, training, and focused enforcement operations, saving $1.1 million in General Fund resources. We are realigning our budget to more appropriately reflect the actual City staff time dedicated to the newly opened amenities at the Orange County Great Park. Particularly in Community Services, Public Works, Marketing, and Planning, allocating $1 million in General Fund Expenditures to the Great Park thereby faithfully observing the City’s policy that the General Fund should not be used to subsidize the Great Park. Lastly, just under 10 percent of the City’s annual school funding of over $10 million will be paid by the revenues generated within the Great Park, to account for the schools located in that geographic area (5 out of 42, including the forthcoming Loma Ridge Elementary School). Expenditure measures
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To free up Great Park resources necessary to support relevant staff and school expenses, we are proposing to ground the Great Park orange balloon, which is currently costing the taxpayers over $0.6 million annually. Similarly, the Global Village Festival is costing City’s taxpayers over $0.5 million annually and we are proposing to combine the Global Village and Spooktacular events, expanding them to two days. The proposal creates staffing and operational efficiencies along with improved visitor experience, and frees up another day in the Sports Complex which could generate $40,000 in revenue. We are proposing to reinstate the business license registration fee, at $50 annually for the smallest businesses and $70 annually for larger ones (with 5 or more employees). This proposal will generate approximately $1.5 million annually, helping to cover the cost of the program. We are looking to improve cost recovery for our athletic and aquatic facilities which are highly subsidized. This budget proposes to charge non-profit groups $10-20 per hour for the use of City athletic and aquatic facilities, generating $0.8 million in additional General Fund revenue. With these marginal new fees, department cost recovery is improved and the City still remains competitive with the surrounding communities. Additionally, with the continued growth of the City’s population, three parking enforcement officers are included to address parking safety generating $0.3 million annually. The above balancing measures will help the City to achieve a balanced biennial budget in FY 2019- 2021, generating surpluses in the last three years when the City’s retirement payments to CalPERS start to decrease. The table below reflects the General Fund financial position with the above measures in place. The surpluses projected for the last three years of the five-year plan give us some room to reward the work of our hard-working, dedicated, talented City employees. Currently, the budget assumes no salary increases for the City’s staff, and labor negotiations are underway. Revenue measures
FY 2019-2024 Proposed Two-Year Budget and Five-Year Plan
Proposed Budget 2019-2020
Proposed Budget 2020-2021
Forecast 2021-2022
Forecast 2022-2023
Forecast 2023-2024
GENERAL FUND Total Revenues and Transfers-In Total Expenditures and Transfers-Out
206,145,891 205,769,153
211,628,110 211,283,240
217,454,755 214,703,224
223,013,222 220,971,176
230,313,313 226,167,726
Net Revenues and Expenditures
376,738
344,870
2,751,531
2,042,047
4,145,587
FY 2019-21 Proposed Budget
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CITY MANAGER BUDGET MESSAGE
Strategic Priorities The Proposed FY 2019-2021 Two-Year Budget and Five-Year Strategic Financial Plan support the City strategic priorities, stated below. Maintain high quality essential City services: When budget balancing measures were developed to address the $12-16 million General Fund deficit, City management strived to minimize any major service impacts. Staffing reductions are only proposed to the extent they reduce levels of bureaucracy and lead to more efficiencies. For example, we are eliminating one of two Assistant City Manager positions, with the remaining Assistant carrying the workload of two people; eliminating the Great Park Director position with the City Manager assuming this role; and reducing 5 administrative support positions in the City Manager’s Office. Public Works is eliminating three positions with no service impacts to maintenance operations and several part-time positions are being consolidated in Community Services. The City of Irvine’s commitment to public safety is evidenced by the City’s continual standing as the nation’s safest city. To maintain our current service levels, and our response times within reasonable timeframes, five police officers, one police sergeant, and two civilian positions are added to existing staff in the Proposed FY 2019-20 Budget. Additionally, four more police officers, an additional crime analyst, and an upgrade from a part-time to full-time senior public safety assistant are included in the FY 2020-21 Budget. We are also adding staff in Community Services to operate new community facilities. In the current fiscal year, the City’s 11 th and 12 th community centers, at Los Olivos and Portola, were successfully opened. Planning and design continues for implementation of other Parks Master Plan priorities, including Bommer Canyon Cattle Camp Rehabilitation Project, Heritage Community Park Improvements Master Plan, and Plaza Park Playground and ADA Improvements. Community Services offers resources and activities that support children, youth and families. These programs include Irvine Children’s Health Program, FOR Families, Child Resource Center, Youth development and resiliency programming, the Irvine Child Care Project and parent and child care provider education workshops. To address child care capacity, the Irvine Child Care Project added 500 new school-aged child care slots within the last two years. Recreational activities and programs keep our City’s young people engaged in positive activities, thereby decreasing potential involvement in high-risk activity. Department activities include Mobile Recreation, Youth Action Teams, Middle School Programs, Fine Arts, Aquatics, Youth Athletics and Leaders in Training. ln addition to thriving activities, Park Ambassadors provide valuable oversight functions at parks, City athletic fields and tennis courts to ensure groups use City amenities respectfully and safely. Enhance City-wide mobility through transportation improvements: The Proposed FY 2019- 21 Budget includes funding for the construction phase of the University Drive Widening (Ridgeline to I-405), signal synchronization at MacArthur Boulevard and Redhill Avenue to
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enhance existing traffic signal flow, and numerous other traffic management measures to improve overall efficiency of our City’s circulation system.
Maintain the City’s Contingency Reserve at 20 percent: This budget keeps the City’s contingency reserve at the minimum level of 20 percent. This is below the desired level of 25 percent, which will be difficult to achieve in fiscally challenging times. However, keeping the reserve at 20 percent is essential in order to maintain the City’s high credit rating, provide cash flow throughout the year, and have resources in the case of an emergency. Reduce the City’s unfunded pension liability: Staff continues to implement a plan previously approved by the City Council to pay down the City’s unfunded pension liabilities in order to stabilize future pension cost increases. This Biennial Budget includes $7 million in pension pay-down payments (including a $5 million loan from the Asset Management Plan). The pay down plan will result in a welcome reduction in the City’s pension contribution to CalPERS beginning in FY 2021-22. Appropriately fund the City’s key infrastructure, such as facilities, streets, vehicles and technology: This Biennial Budget includes several recommended fiscal policies, to reinforce the fiscal discipline and accountability principles under which this City already operates. To take care of the City’s key infrastructure, such as facilities, vehicles, streets and technology, the policies will require a regular comprehensive assessment of the City’s critical assets – based on the new practice utilized by staff to develop this Biennial Budget and Five-Year Financial Plan. Promote innovation through the effective use of Information Technology solutions to streamline business processes and increase responsiveness to the community: City management continues to promote innovation through the use of effective technology. In the proposed Biennial Budget, funding is included to upgrade and replace the City’s aging permitting system in order to enhance online services and reduce processing times and paper consumption. Also budgeted is an upgrade to the City’s Public Safety Record Management System to integrate information from several systems and provide real-time data to police officers. The overall proposed Information Technology budget supports core information technology services, improves cybersecurity capabilities, and enhances the City’s wireless functions. These key areas allow the City to remain at the forefront of technology designed to digitally engage citizens, businesses, and visitors alike. Recruit and retain high quality employees: The City will continue developing programs to recruit talented candidates and to retain and develop our employees. Efforts under way include formal internship programs in collaboration with UC-Irvine and the Chamber of Commerce, a job shadowing program, employee training online and through the train-the- trainer approach, employee engagement to facilitate inter-departmental innovation, and many others.
FY 2019-21 Proposed Budget
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Investing in the City’s Essential Infrastructure: Five-Year Capital Improvement Program As part of the new two-year budget cycle, the City Council is receiving the first comprehensive Five-Year Capital Improvement Program (CIP) document outlining proposed capital projects and funding sources. A total of 48 capital projects are planned for FY 2019-20 and additional 29 projects for FY 2020-21; they are incorporated into the City’s proposed FY 2019-21 Biennial Budget. The proposed CIP responds to the needs of our residents to ensure the streets, public buildings, and parks are well maintained and operated for optimum health and safety, increased efficiency and functionality, enhanced attractiveness and beautification, and compliance to legal mandates.
The two-year proposed CIP budget contains $80.8 million in capital project funding for FY 2019- 20 and $64.5 million for FY 2020-21. Below is a breakdown by project category.
CIP Project Summary
Project Category
New Construction Rehabilitation Total
Facility Improvements
10,997,000
4,951,500
15,948,500
Great Park Improvements
40,995,000
1,460,000
42,455,000
Landscape Improvements
3,150,000
2,580,879
5,730,879
Street &Mobility Improvements
52,748,995
28,412,807
81,161,802
Total
107,890,995
37,405,186
145,296,181
Key capital projects planned for the next two years include: Street and Mobility Improvements: University Drive Widening (Ridgeline to I-405) and Barranca Parkway Rehabilitation. Facility Improvements: Bommer Canyon Rehabilitation and Oak Creek Community Park Improvements. Landscape Improvements: Eucalyptus Windrow Tree Replacement and Walnut Bike Trail Lighting and Landscaping Installation. Great Park Infrastructure/Improvements: Great Park Administration Building Design and Construction and Shade Structure Improvements. Within the two-year budget, several key capital projects remain unfunded. The estimated cost of these unfunded projects over the two-year period is $9.4 million with approximately 46 percent consisting of facility improvements, 11 percent in Great Park improvements, 33 percent in landscape projects, and 10 percent in street and mobility improvements as shown below.
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CITY MANAGER BUDGET MESSAGE
Unfunded Projects
Project Improvement Category
2-Year Budget Total
Facility
4,280,750
Great Park
1,000,000
Landscape
3,135,240
Street &Mobility
950,000
Total
9,365,990
Examples of the unfunded projects include:
Facility Improvements: Civic Center Parking Lot Rehabilitation and Sweet Shade Universal Playground Installation. Great Park Improvements: Hot Food Concessions. Landscape Improvements: Hicks Canyon Wash Landscaping and Electrical Pedestal Rehabilitation. Street and Mobility Improvements: Bike Trail Pavement Rehabilitation and Bikeway Improvements. One category of funding available for some of these projects is the Department of Finance Settlement proceeds. It is anticipated that a total of $292 million will be paid by the State by 2024, with $29.2 allocated to the Irvine Land Trust and $14.6 to the Great Park rehabilitation account, leaving $248.2 net available for other needs. The City has received $75.3 million, of which $56 million is available; $42.5 million is proposed for Great Park CIPs in this budget cycle. A portion of the remaining $11 million could be advanced for some of the above unfunded critical capital projects. Other critical needs for which settlement funding is needed includes: $135 million to prepare the Cultural Terrace for development Additional needed funding for the Great Park rehabilitation account to maintain existing facilities into the future. Planning Ahead: Great Park Development Through public-private partnerships between the City and its partners, the vision for the Great Park is coming to fruition. The Great Park Sports Complex is complete and opened for public use. In its first eight months of operation the Great Park Sports Complex has attracted numerous regional, national, and international events hosting over 500,000 visitors from the local community and around the world for cultural and sporting events.
FY 2019-21 Proposed Budget
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CITY MANAGER BUDGET MESSAGE
The public-private partnership between the City and the Anaheim Ducks resulted in the construction of one of the largest ice facilities in the country at the Great Park. Opened in early 2019, Great Park Ice includes four sheets ice that host public skating, youth hockey games and tournaments, and figure skating. Development for the remaining acres of the Great Park is in progress. Currently under construction are two projects to preserve and protect important natural resources: the 85 acre Agua Chinon, a sustainable water management channel for the Great Park and surrounding neighborhoods, and a two and a half mile wildlife corridor which will meet an important conservation vision to connect wildlife between the Cleveland National Forest and Laguna Canyon. Impacts of Labor Negotiations It is critical to note that the five-year plan (including the first two years reflected in the proposed Biennial Budget) does not yet take into account any impacts of employee labor negotiations, which were underway at the time this budget document was published. Financial impacts of labor negotiations will be built into the budget (and the corresponding five-year financial plan) before budget adoption in June 2019. Looking Forward This is a dynamic time for our City bringing both challenges and opportunities. However, I am confident that by working together with our residents, business community, Mayor and City Council, and committed staff, we will capitalize on those great opportunities and mitigate the challenges ensuring that Irvine remains one of the most prosperous places to live.
John A. Russo CITY MANAGER
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FY 2019-21 Proposed Budget
INTRODUCTION
FY 2019-21 PROPOSED BUDGET
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INTRODUCTION
USER’S GUIDE TO THE BUDGET
A local government budget is a plan to match existing resources with the needs of the community. The functions of local government stem from three levels of policy direction: federal, state, and local. Within this intergovernmental system, local government is the workhorse of domestic policy. Local government has the responsibility to provide basic public services such as maintaining streets and roadways, providing traffic management systems, maintaining parks, providing community services, and ensuring public safety. Local government must also fulfill certain state and national policy objectives such as transportation and environmental protection while implementing the expectations and values of its citizens. For local governments, the primary tool used to coordinate these requirements is the budget. Article X of the Irvine City Charter and Section I-3-210 of the Irvine Code of Ordinances
set forth the legal requirements for preparation of the Two-Year Budget. The City of Irvine’s Budget provides the residents of Irvine with a plan for matching available resources to the services, goals, and objectives specified in Irvine’s Strategic Business Plan. The user’s guide is designed to assist readers in understanding the information provided in the Two-Year 2019-21 Budget, as well as how the document is organized. The Budget document includes 22 chapters, with a table of contents and a glossary. The explanations below provide additional details for each of the sections. City Manager’s Budget Message Overview of the budget including a summary of critical economic issues, City Council directed core services, and basic operations and strategic goals for FY 2019-21. Introduction Provides a description of the budget development process, citywide organization chart, key contacts throughout the City (including elected and appointed officials), and budget awards (Government Finance Officers Association Distinguished Budget Presentation Award and California Society of Municipal Finance Officers Excellence in Operational Budgeting Award). Community Profile Provides historical, demographic and statistical information on the City of Irvine, including information on the City’s population, educational facilities, recreation and open space, and listing of the top property taxpayers, sales tax producers and employers in the City. Revenue and Expenditure Estimates Revenue and expenditure overview, assumptions and methodology used to develop estimates, summary by category, and historical trends.
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INTRODUCTION
Budget Summary Comprehensive overview of revenues and expenditures for all funds, as well as fund balance projections.
Personnel and Staffing Summary of funded personnel and staffing changes, as well as a list of full-time personnel by classification.
Departmental Chapters Presents summary information on the City’s operating departments:
City Manager’s Office
Human Resources & Innovation
City Clerk’s Office
Public Safety Public Works Transportation
Community Development
Community Services
Financial Management & Strategic Planning
Non-Departmental
Department-wide summary information includes strategic goals and organizational charts, a summary of staffing, as well as revenues and expenditures. Information is further presented by service center, including FY 2019-21 standards, performance measures, summary of staffing, as well as revenues and expenditures.
Strategic Goals
Maintain and enhance the physical environment Promote economic prosperity
Promote a safe and secure community
Promote effective government
Special Funds Overview of each of the City’s Special Funds, including fund descriptions, revenues, and expenditures.
Special Funds are classified into one of six categories: General Reserve Special Revenue Capital Projects Debt Service Internal Service Trust and Agency
Capital Improvement Program Overview of the City’s Capital Improvement Program (CIP), including FY 2019-21 revenues and expenditures. This section also includes a project description page for each project, detailing its location, classification, and expenditures and provides a five-year capital project and infrastructure investment plan.
Strategic Business Plan Provides five-year General Fund revenue and expenditure projections.
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INTRODUCTION
Strategic Technology Plan The Strategic Technology Plan highlights the City’s investments in Information Technology and provides a five-year technical and financial forecast.
Financial Policies The City of Irvine Fiscal Policies includes the following major categories: Long-Term Financial Planning Biennial Budget Capital Improvement Program (CIP) Budget Balanced Budget General Fund Contingency Reserves Infrastructure Funding Interfund Transfers and Loans User Fees and Cost Recovery Cost Allocation for Administrative and Support Functions Grands and Federal Funds Risk Management and Internal Controls Investment Policy Debt Policy
Budget Guidelines Outlines the City’s budget procedures that guide the development and administration of the annual operating budget. Includes accounting and annual reporting, contract budgeting, budget adjustments, and other guidelines. Glossary Listing of acronyms and terms used throughout the budget document, as well as links to external websites where additional related information can be found, when appropriate. Budget Process Summary The City of Irvine operates on a fiscal year basis, starting July 1 and ending June 30, and operates on a two-year budget cycle. The budget is prepared by the Budget Office and Departmental Budget Coordinators under the supervision of the City Manager. The proposed budget is reviewed by the Finance Commission in public meetings in April, and transmitted to the City Council inMay for review, public input, deliberation and in June for adoption prior to the beginning of each new fiscal year (July 1).
Budget Structure
Operations Budget : The operations budget, or General Fund budget, is the City’s biennial fiscal blueprint. The operations budget is a guide for the receipt and disbursement of funds used to provide daily, routine public services to the community. The operations budget outlines the many municipal services, programs and projects provided by the City during the fiscal year. It also identifies specific General Fund revenue estimates and expenditures necessary to implement services to the community.
FY 2019-21 Proposed Budget
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INTRODUCTION
Capital Improvement Program Budget (CIP): The CIP budget details the acquisition, construction or rehabilitation of major capital facilities and infrastructure. The CIP budget is used to account for the receipt and disbursement of funds for specific CIP projects. For many projects, revenue resources and expenditures may extend over several years. Special Funds Budget: Special Funds are used to account for revenues and expenditures that are restricted by law or set aside for a special purpose. Each fund can be classified into one of six categories: General Reserve, Special Revenue, Capital Project, Debt Service, Internal Service, or Trust and Agency Funds. Responsibility for Preparation The Budget Office, a division of the Financial Management and Strategic Planning Department, is responsible for coordinating all revenue estimates contained in the budget. Estimates are reached by analyzing revenue history; national and local economic trends and indices; and development patterns in our local economy. Revenue projections used in the context of the Two-Year Budget are based on conservative assumptions to assure the City has adequate financial resources to meet its obligations and complete all programs approved by the City Council within the course of the fiscal year. When appropriate, these assumptions and specific program allocations are adjusted during the fiscal year. Budget Review Irvine has advisory commissions appointed by the City Council that are involved in the development and review of the annual budget. The Community Services Commission, Planning Commission, Transportation Commission and Senior Citizens Council provide budget input and analysis about programs relating to their particular areas of responsibility. The Finance Commission is specifically charged by the City Council to “review the City’s General Fund, Capital Improvement Program and Special Funds budget, including review of policies and procedures, timeframes, format, service delivery, funding alternatives and City Council priorities.” Following the publication of the proposed budget, the commissions hold public meetings to discuss the budget and provide specific recommendations to the City Council. Budget Adoption Copies of the proposed budget are made available to the general public during the budget process. After providing opportunities for public review and discussion at public budget meetings, commission meetings and City Council meetings, the two-year budget and five-year financial plan is proposed to the City Council prior to June 30 at either a regular or special City Council meeting. After adoption, the budget may be amended by the City Manager if an amendment is within three percent of appropriations in any separate fund or department. Basis of Accounting Basis of accounting refers to the timing of revenue and expenditure recognition for budgeting and financial reporting. The City’s financial statements and accounting records are maintained in accordance with the recommendations of the Governmental Accounting Standards Board (GASB). Government-wide financial statements are reported using the economic resources measurement focus and accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related The Budget Office also coordinates the development of all expenditure budgets, publishes the Budget book, and prepares Finance Commission and City Council budget reports.
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FY 2019-21 Proposed Budget
INTRODUCTION
cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have beenmet. Budget development and budget adjustments utilize these same revenue and expenditure recognition timing policies and practices. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Direct expenses have not been eliminated from the functional categories; indirect expenses and internal payments have been eliminated. A carefully designed system of internal accounting controls is in operation at all times. These controls are designed to provide reasonable, but not absolute, assurances that safeguard assets against loss from unauthorized use or disposition and to ensure the reliability of financial records used in the preparation of financial statements. The concept of reasonable assurance recognizes the cost of a control should not exceed the benefit. The evaluation of costs and benefits likely to be derived require estimates and judgments by management. An independent, certified public accounting firm reviews the City’s financial accounting processes, practices and records annually. Quarterly Financial Reporting On a regular basis, the Budget Office will evaluate financial performance relative to the adopted and adjusted budget, and prepare and present reports to the City Council, City management, and Finance Commission. The purpose of these reports is as follows: Give decision makers time to consider actions that may be needed if major deviations in budget-to-actual expenditures or revenues become evident. The City utilizes the following policies to govern budget development and operations. Balanced Budget The Irvine City Charter, Article X, Section No. 1001 sets the legal requirement for the City Manager to submit to the City Council a proposed budget and an accompanying message at such time as the City Council shall prescribe. It is the goal of the City Manager that this biennial budget be balanced. A budget will be adopted by the City Council for two fiscal years, broken into one year increments. It is the City’s goal to fund current year operating expenses with current year revenues. The budget proposal as presented by the City Manager shall be balanced, with recurring revenues meeting or exceeding recurring expenditures for ongoing operations. Non-recurring revenues may not be used to fund recurring expenditures without the approval of the City Council. Budget Process Article X of the Irvine City Charter and Section I-3-210 of the Code of Ordinances set forth the legal requirements for the preparation of the budget. The fiscal budget is prepared by the City Manager for a two-year fiscal cycle beginning July 1 and ending June 30 and must be adopted by the City Council. The Budget Office prepares and disseminate a budget preparation calendar on tasks and due dates. Departmental budget coordinators have the responsibility for ensuring compliance with budget development policies, procedures and timelines. Provide an early warning of potential concerns and problems; Identify, investigate and correct accounting errors; Evaluate and explain significance of on-going variances;
FY 2019-21 Proposed Budget
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