City at a CrossroadsMiguel A. SantanaCity Administrative Officer

CITYOFLOSANGELES

1

80% of once $1.07 billion deficit has been addressed.

Revenue Growth$177 Million

Pension Savings$263 Million

Salary Savings$83 Million

HR Benefits and Worker's

Compensation Savings

$61 Million

Capital Improvement Cost

Deferrals$48 Million

Department Cuts$222 Million Remaining

2013-14 Deficit $216 Million

2013-14 Projected DeficitFrom $1.07 Billion to $216 Million

2

Pension savings are $263 million from prior projection.

$260 $343 $339 $313 $298 $339 $352 $342

$550 $382

$175

$280 $327 $326 $355 $386 $441 $506

$712

$617

$435

$623 $666 $639 $653 $725

$793 $848

$1,262

$999

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Projection2013-14(From2010)

Projection2013-14(From2012)

Mill

ions

Fiscal Year

City Contributions to Retirement Systems (LACERS and LAFPP) Actual Amounts 2005-06 to 2012-13 and Projections for 2013-14

Total LACERS Total LAFPP

3

Citywide, since 2007-08, staffing reduced by 5,300 positions or 14.4%.

21,701 22,080 22,167 21,610 22,324 22,723 22,929 22,718 21,852 19,225 18,597 18,170

13,758 13,799 13,807 13,805 13,832 13,944 14,244 14,253 14,012

13,740 13,677 13,647

35,459 35,879 35,974 35,415 36,156 36,667 37,173 36,971 35,864

32,965 32,274 31,817

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Posi

tions

Fiscal Year

Authorized City Staffing(Not including Proprietary Departments)

All Others Police (sworn and civilian)

-14.4%

4

Less than $360 million for “discretionary” spending

2013-14 City Budget $7.2 Billion

PoliceFireLibraryRecreation & ParksPublic WorksTransportationBuilding and SafetyPlanningConvention Center (debt service)

Sewer revenuesGas TaxGrantsFees for Special Services

Animal ServicesCity AttorneyControllerCAOCultural AffairsEmergency MgtFinanceMayorCouncilCity ClerkDisabilityZooOthers

Cost for GSD, ITA, and Personnel allocated to all other budgets.

Unrestricted RevenueNon-Discretionary

$3.4 Billion47%

Restricted Revenue$3.5 Billion

48%

Unrestricted RevenueDiscretionary$359 Million

5%

5

Need for cuts + Small amount of discretionary dollars = Large reductions to departments ($222 Million)

263 268 257 245 229 228 218$10.6 $9.9

$5.3 $6.4 $6.0

$4.8

$1.3 $-

$2.0 $4.0 $6.0 $8.0

$10.0 $12.0

0

50100150200

250300

Mill

ions

Posi

tions

Fiscal Year

General Fund Contribution to the Los Angeles Zoo and Regular Positions

Regular Positions General Fund Contribution

380412

364338 326

0

50

100

150

200

250

300

350

400

450

2008-09 2009-10 2010-11 2011-12 2012-13

Posi

tions

Fiscal Year

Animal Services Authorized Staffing

-21%

6

Support departments have taken some of the biggest hits.

$225

$171 $147 $152 $158

$106 $91 $80 $78 $81

$50

$100

$150

$200

$250

2008-09 2009-10 2010-11 2011-12 2012-13

Mill

ions

Fiscal Year

Support Department Budgets : GSD and ITA

GSD Adopted Budget (Adjusted for Public Safety, Petroleum, Leasingand Mail Services)ITA Adopted Budget

1,916 1,755 1,333 1,280 1,262

807 712

526 515 479

2,723 2,467

1,859 1,795 1,741

-

500

1,000

1,500

2,000

2,500

3,000

2008-09 2009-10 2010-11 2011-12 2012-13

Posi

tions

Fiscal Year

Authorized Staffing for Support Departments: GSD and ITA

GSD (Excluding Construction Forces and Public Safety)

7

Loss of revenue not as deep as we expected due to one-time revenues used and economic recovery.

$4,363 $4,415 $4,415

$4,297

$4,389

$4,550 $4,621

$4,132 $4,177

$4,284

$4,443

$3,800

$3,900

$4,000

$4,100

$4,200

$4,300

$4,400

$4,500

$4,600

$4,700

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Mill

ions

Fiscal Year

General Fund Revenue

General Fund Actual Receipts Current Projection (2012) Prior Projections (2010)

8

Done: Reserve Fund is over 5% of General Fund.Next: Building up Budget Stabilization Fund.

$62.6 $73.5 $86.9

$171.2

$118.2 $83.9

$153.4 $156.4 $182.3

$128.3 $165.8 $151.7

$171.0 $201.7

$242.3 $224.9 $244.3

2.30%2.60%

3.00%

5.30%

3.60%3.23%

4.15% 4.02% 4.20%

2.89%

3.64% 3.45%

4.40% 4.58%

5.52%

4.94%5.37%

$-

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Mill

ions

Fiscal Year

Perc

ent

Reserve Fund Balance

Reserve Fund Balance Available, July 1 Balance as % of General Fund

9

Ensuring public safety $144 million more for police and fire departments

just to keep same level of service next year.

$36

$3

$29 $21

$17

$7 $27

$53

$4

$36

$2

$48

$-

$10

$20

$30

$40

$50

$60

Sworn Salaries Civilian Salaries Expense Facilities Vehicles andEquipment

Mill

ions

Request Type

2013-14 Budget Increases Requested by Police and Fire Departments

Total $144 Million

Police Department Fire Department

10

135225 200 175 200 149 174

236 245

300

300 300 400 370401 401

401455100

100 100

100 102 100 102110

100

535

625 600675 672 650 677

747800

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13Estimated

Mile

s

Fiscal Year

Miles Completed By Fiscal Year

Resurfacing/Reconstruction (miles) Slurry Seal (miles) Crack Sealing (miles) Total (miles)

Supporting basic City infrastructureCity can no longer rely on non-General Fund

dollars for infrastructure investment.11

Maintaining a good quality of lifeQuality of life programs first to get cut.

Can’t reinvest in services without additional funding.

Investing in the economy and job growthNew economic development model needed

thatmaximizes the City’s assets.

12

Stabilizing the workforceLong term stability requires controlling

total employee compensation.

Salaries$2,705 Million

59%

Retirement Contributions$848 Million

19%

HRB$399 Million

9%

Workers Comp.$193 Million

4%

All Other (including Debt

Service and CIEP)$405 Million

9%

2012-13 General Fund Expenditures $4,550 Million

Labor costs, 91% of General Fund

13

$5,030

$4,550

$4,837

$5,056

$5,167

$5,295

$4,500$4,600$4,700$4,800$4,900$5,000$5,100$5,200$5,300$5,400

2012-13 2013-14 2014-15 2015-16 2016-17

Mill

ions

Fiscal Year

Budget OutlookAdopted 2009-10 to 2012-13 Projected 2013-14 to 2016-17

Revenues Expenditures

Expenditure Average Growth 3.9%

Revenue Average Growth 2.5%

$5,030

$4,550

$4,837

$5,056

$5,167

$5,295

$4,500$4,600$4,700$4,800$4,900$5,000$5,100$5,200$5,300$5,400

2012-13 2013-14 2014-15 2015-16 2016-17

Mill

ions

Fiscal Year

Budget OutlookAdopted 2009-10 to 2012-13 Projected 2013-14 to 2016-17

Revenues Expenditures Revenues with Sales Tax

Expenditure Average Growth 3.9%

Revenue Average Growth 2.5%

Revenue Average Growth with Sales Tax 3.6%

City at a crossroads.14