BOARD MEETING DATE: June 5, 2009
AGENDA NO. 37
PROPOSAL:
Adopt Executive Officer’s FY 2009-10 AQMD Budget and Work Program
SYNOPSIS:
The Executive Officer's Budget for FY 2009-10 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, 2009 to receive input on the AQMD's Program Goals and Objectives; and two budget workshops, one for the public held on April 29 and one for the Board held on May 15, 2009. This submittal transmits the required appropriations and reserves necessary to adopt the proposed budget.
COMMITTEE:
Administrative, May 8, 2009, Item deferred to Governing Board Budget Workshop, May 15, 2009
Board Budget Workshop, May 15, 2009
RECOMMENDED ACTIONS:
- Remove from Reserves and Designations all amounts associated with the FY 2008-09 Budget;
- Approve appropriations in the Major Objects for:
Salary and Employee Benefits $ 100,946,393 Services and Supplies 29,272,969 Capital Outlays 1,473,267 Total $131,692,629
- Approve a projected June 30, 2010 Fund Balance of the following:
Reserve1 for Encumbrances $ 7,240,000 Reserve for Inventory of Supplies 80,000 Designated for Enhanced Compliance Activities 2,394,818 Designated for Facility Refurbishing 876,142 Designated for Equipment Replacement 884,900 Designated for Self-Insurance 2,000,000 Designated for Litigation/Enforcement 1,000,000 Designated for Retirement Actuarial Increases 9,000,000 Designated for Permit Streamlining 477,195 Designated for Unemployment Claims 80,000 Designated for Budget Stabilization 8,000,000 Total $32,033,055 Undesignated: $20,910,282
- Approve revenues from the following:
2009-10 Revenues $126,783,943
Fund Balance – Prior Year Revenue 4,908,686 2
Total $131,692,629
- Establish the CEQA Green House Gas Mitigation Fund and recognize revenue of $1,500,000 from Chevron Products Company to offset Green House Gas emissions as part of their PRO+ Mitigation Monitoring Plan.
- Approve the change to the Administrative Code Section 120.2 – Requests for Travel Expenses and Required Receipts for AQMD employees when utilizing public transportation where a receipt is not available. (Attachment I)
- Delete obsolete position classes from AQMD’s classification plan as detailed in Attachment II.
Barry R. Wallerstein, D.Env.
Executive Officer
The Executive Officer’s Budget for Fiscal Year (FY) 2009-10 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, 2009 to take input on the AQMD’s FY 2009-10 Program Goals and Objectives; and two budget workshops, one held for the public on April 29, 2009 and one held for the Governing Board on May 15, 2009.
Since the early 1990’s, the AQMD has implemented regulatory reform to introduce market-based principles in cleaning up urban air, streamlined aspects of permit processing, privatized some functions to improve operational efficiency, and remained committed to treating regulated businesses fairly. This year’s budget proposal holds staffing levels constant at 839 positions, which is 28% (324 FTEs) below FY 1991-92 levels, and program expenditures which are $418,286 below the FY 2008-09 adopted budget. Using inflation adjusted dollars, this year’s expenditure request is 38% less than the budget approved in FY 1991-92.
Proposal
This balanced budget request is based on the goals and objectives presented to the Board at the February 6, 2009 meeting. These goals emphasize continued efforts to improve efficiency and productivity; implementing the 2007 SIP, the Board’s initiatives, and the Fleet Rules; reducing air toxics; and continuing to address other priority issues. For FY 2009-10 a new goal “Cleaner and Greener” has been added to address AQMD’s efforts in reducing greenhouse gases and global warming.
This year’s budget proposal reflects current labor agreements which expire on June 30, 2009. The results of new labor negotiations will be incorporated into the final budget upon Governing Board approval. There is no net change in the total number of FTEs in the proposed Budget. However, it is necessary for the agency to add three new Air Quality Chemist positions and reallocate five Air Quality Inspector positions to support the Architectural Coatings Compliance program. All eight positions are supported by revenues generated from the Architectural Coatings fee. To offset this increase in chemist positions, staff is proposing a decrease of three positions and several position changes to better align staffing with agency priorities and program commitments. In the Legislative and Public Affairs area, the addition and deletion of three positions related to local government outreach and graphics will result in a net savings of $28,000. In the Engineering and Compliance area, the addition of two senior level engineering positions and the deletion of three lower level positions will better address permit streamlining activities at a cost savings of $88,000. In the Human Resources area, one analyst position in support of recruitment and selection activities is being deleted and in the Planning area, one clerical position in support of the Rule 2202 program is being deleted. In addition to the savings associated with staffing, the Services and Supplies and Capital Outlays budgets are being reduced by approximately $1.3 million from the 2008-09 adopted budget, reflecting reduced contract services and equipment purchases.
Chevron’s El Segundo Refinery – Product Reliability and Optimization (PRO+) Project Mitigation Monitoring Plan, Mitigation Measure MMGHG-1 required an initial payment of $1,500,000 to the AQMD for the purpose of producing verifiable and quantifiable permanent Green House Gas (GHG) emission reductions to be used to offset GHG emission from Chevron’s PRO+ Project. Staff is recommending the establishment of a special revenue fund and to recognize the payment from Chevron Products Company.
The agency encourages employees traveling on business to use public transportation when possible. In many cases, receipts are not issued by public transportation agencies (buses, metro, etc.). Staff is recommending a change to the Administrative Code Section 120.2 – Requests for Travel Expenses and Required Receipts allowing the Chief Financial Officer to waive the receipt requirement when employees use public transportation. (Attachment I)
To streamline and update AQMD’s classification plan, staff is also recommending the deletion of 20 obsolete classes from the plan (Attachment II) that are no longer used.
Resource Impacts
Following the Board’s direction to assist businesses during these difficult economic times, staff is not recommending a general fee increase this year to finance increases in AQMD program costs. In order to balance the FY 2009-10 Budget request, staff is proposing an appropriation of $1,856,781 in prior year revenues set aside (Designated) in the Fund Balance for permit streamlining, enhanced compliance and equipment replacement, and $3,051,905 from the Undesignated Fund Balance to make-up the difference.
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 mid April. The Draft Budget and Work Program are 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.
Attachment (DOC, ~12k)
Attachment I – Administrative Code Amendment, Section 120.2 – Requests for Travel Expenses and Required Receipts
Attachment II – Obsolete Position Classifications
Attachment III – Addendum to FY 2009-10 Draft Budget and Work Program
1 The terms Reserve, Designated, and Undesignated are terms established by the Government Accounting Standards Board.
2 Includes $1,856,781 use of prior year revenue (Designated for Permit Streamlining, Enhanced Compliance Activities and Equipment Replacement) and $3,051,905 from the Undesignated Fund Balance to balance revenues with expenditures.