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Proposed FY 2020 Budget Highlights

Post Date:05/17/2019

The following are components of the City of Paramount’s 2019-2020 budget that might be of interest to residents. The entire budget can be found in a link at the bottom of this list. The full budget was approved at the City Council meeting on June 18.

Budget Overview

  • The local economy is healthy, but City expenditures are increasing faster than revenues. (Revenues come primarily from taxes and fees, which have been stagnant; in addition, the City lost $5-$6 million per year due to the elimination of redevelopment agencies.)
  • Expenditure increases are due chiefly to higher costs for contracted work, including:
    • LA County Sheriff’s Department
    • Animal control services
    • Crossing guard services
  • Also adding to the City’s growing expenditures are:
    • State minimum wage law increases
    • Escalating pension costs
    • City goal to keep employee wages on pace with inflation by providing a Cost of Living Adjustment (COLA)
  • City is now experiencing a structural budget deficit
  • As a result, use of the following reserve funds are proposed to pay for City operations:
    • Capital Improvement Project (CIP) Reserve Fund - $680,500 (used for special projects)
    • Equipment Replacement Fund (ERF) – $132,300 (used to replace outdated equipment)
    • Pension Reserve Fund - $210,150 (first time in the City’s history)
  • Use of these reserve funds is necessary to achieve a balanced budget
  • Because of these budget realities, the City has made cuts and adjustments without severely impacting programs and services provided to the public
  • In fact, the FY 2020 Budget continues to fund projects/services expected by the community, including:
    • Construction of Water Well #16
    • Expansion of the street paving program
    • Conversion of street medians to drought-tolerant landscaping with new entry monument signs
    • Public park and facility upgrades
    • Paramount pool improvements
    • Ongoing special events for the community (Halloween Carnival, Tree Lighting, Santa Train, ,Breakfast with Santa, Heritage Festival, Veterans Celebration Fair)

Staffing and Employment Benefits

  • Authorized full-time employees = 92
  • Classification & Compensation Study
    • Completed in FY 2019
    • City’s workforce lags behind the labor market as a whole by 1.16% (total compensation)
    • The City will phase in adjustments for positions over time to keep its workforce competitive and retain and attract the best professional staff
  • Pension Contributions
    • Pension cost are rising nationwide
    • In FY 2020, City pension cost will increase $347,000 to about $2.9 million for current and retired employees
    • The City has two tiers of employees enrolled in its pension program
      • “Classic” hired before 2013; full pension cost paid by City
      • “PEPRA” hired from 2013 onward; half of pension cost paid by City and employee (as per State law)
    • The City is proposing to have “Classic” employees begin paying 2% of their total 8% employee share
    • Most neighboring cities require that their “Classic” employees pay the full 8% employee share
      • Click here for a chart
    • Of the City’s 92 full-time employees, 20 are “PEPRA” employees that are already required to pay their full employee share
  • 3% COLA Adjustment
    • The FY 2020 Budget includes a 3% COLA adjustment for full-time employees
    • “Classic” employees: the 3% COLA increase will offset their 2% pension contribution and result in a 1% net take-home salary increase
    • “PEPRA” employees: will gain the full 3% increase in take-home pay as they are already paying the full employee share of pension
    • The COLA is proposed to help maintain competitive pay for City employees
  • Part-Time Employees
    • The FY 2020 Budget will reflect the State’s Minimum Wage law (increase from $12/hour to $13/hour beginning in January 2020)
    • Several part-time employees will receive hourly wage increases in January 2020

Public Safety Department

  • As public safety is the City’s priority, the Public Safety Department has the largest operating budget of $12.2 million (about 28% of the General Fund)
  • Public Safety costs have increase by about $222,000 mostly due to higher patrol costs from the LA County Sheriff’s Department
  • Despite the cost increase, patrol deployment level in Paramount will remain the same
  • To mitigate overall cost increases, several operational cost saving measures are also proposed, including:
    • Entering into a cost-sharing arrangement with the City of Bellflower to continue funding Deputy District Attorney services
    • Because of efficiencies in the Code Enforcement division, freezing one full-time Code Enforcement Officer position.
  • Other long-standing Public Safety programs will continue to be funded in FY 2020, including:
    • Neighborhood Preservation Program (including Pitch-In Paramount volunteer clean-up)
    • Good Neighbor Program (GNP)
    • Neighborhood Watch Program
    • Emphasis on traffic enforcement

Public Works Department

  • The proposed Public Works Department budget for FY 2020 is about $7.5 million (or about $500,000 more than FY 2019)
  • The overall increase in department expenditures is largely due to contract increases for street sweeping, landscape maintenance, and fleet maintenance services
  • A significant expenditure is added in FY 2020 related to storm water compliance (grant funded)
  • Even with the significant budget increase, the Public Works Department will continue to provide the same level of service for routine maintenance; water production, distribution, and customer service; and engineering support services.

Community Development Department

  • The proposed Community Development Department budget ($3,379,550) is substantially higher in FY 2020 because of two one-time high-profile specific plan documents for the Clearwater East Specific Plan and the North Paramount Boulevard Specific Plan requiring significant consultant services (grant funded).
  • Service levels for all department activities, Development Services and Residential and Commercial Rehabilitation will remain at the same level.

Community Services and Recreation Department (CS&R)

  • The proposed CS&R budget is about $5.0 million, or $314,500 less than FY 2019.
  • The decrease reflects a department shift toward managing programs by contract for sports, aquatics, and bus transit.
  • A vacant full-time Recreational Assistant position will be frozen temporarily
  • Other key programs will also continue as the same service level, including:
    • Parks
    • Instructional classes
    • Facilities management
    • STAR After School Program
    • Paramount Education Partnership (PEP)

General Government

  • General Government includes:
    • Administrative Services
    • Personnel
    • Finance
    • Municipal Support
    • City Manager
    • City Attorney
    • Community Promotion
    • City Council and Commissions

The budget proposed for these operations is about $6.9 million

 FY 2020 Proposed Budget

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