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CC - Receive and File the Municipal Financial Benchmarking Study from the Finance Advisory Committee.
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Contact Person/Dept: Jeff Muir, Finance
Phone Number: (310) 253-5865
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No []
Public Hearing: [] Action Item: [X] Attachments: Yes [X] No []
Commission Action Required: Yes [] No [X]
Commission Name:
Public Notification: (Email) Meetings and Agendas - City Council (02/18/16); (Email) Meetings and Agendas - Fiscal and Budget Issues (02/18/16)
Department Approval: Jeff Muir, Chief Financial Officer (02/16/16)
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RECOMMENDATION
Staff recommends the City Council receive and file the attached Municipal Financial Benchmarking Study as approved by the Finance Advisory Committee (FAC).
BACKGROUND
Item 1 of the FAC Work Plan is to “Undertake a Budget Benchmarking Project to compare where and how Culver City spends and receives money to selected similar communities.”
Beginning in the fall of 2014, the FAC embarked on a review of benchmarking best practices in an effort to fulfill this directive and determine how best to compare the City’s financial composition to similar municipalities. The terms of the engagement were discussed, and it was agreed to limit the scope of the study to review the range of funding sources and uses across peer cities in comparison to the City.
The FAC subsequently researched cities throughout the State of California, using various criteria such as population, city structure, revenue and tax composition, economic competitiveness and geographic area. Using this criteria, the FAC underwent several iterations in an effort to identify like cities, with an initial screening reducing the number from 478 to 23. Further investigation was conducted by way of phone/email surveys and review of annual financial reports and performance data, leading the FAC to the final selection of the following seven cities: Beverly Hills, Monrovia, Santa Monica, Monterey, Brea, Fountain Valley, and Campbell.
At its February 9, 2016 meeting, the FAC approved this report and recommended it be transmitted to the City Council.
DISCUSSION
The City of Culver City Municipal Financial Benchmarking Study is designed to provide citizens, business owners, policy-makers, and other stakeholders with an understanding of the range of funding sources and uses across peer cities in comparison to the City of Culver City. The report is organized beginning with a discussion of each city’s total revenues followed by total expenditures. The final section of the report focuses on the General Fund, the largest and most important municipal fund type.
Report highlights include (page references are to the attached Study):
• Of the eight cities included in this study, Culver City is the smallest in square mileage (5.11) and ranks in the middle for residential population (38,883). During the daytime, Culver City’s population increases by 61.1% to 62,631. (See Page 3)
• Culver City has the lowest per capita property tax revenue (13.2%) of the eight cities studied. Culver City’s low property tax base is due to the City receiving only 10.5% of the 1% County levy. As a tradeoff for its low property taxes, the City collects a Utility Users Tax, which accounts for 19.7% of Culver City’s tax base. (See Page 8)
• The City of Culver City was one of only two cities reviewed that maintains its own bus system, Santa Monica being the other. Culver CityBus’ operating expenditures are 16.9% of the City’s total expenditures. (See Page 15)
• Culver City is in line with the average of $2,204 per capita for total General Fund revenue. Like most cities, General Fund revenue is generated primarily by way of taxation. Taxes account for 76% of Culver City’s total General Fund revenue, higher than the 66% average among the cities reviewed. (See Page 25)
• The General Fund accounts for over half of Culver City’s total budget, and like most cities is used predominately for Public Safety. Culver City’s Public Safety expenditures account for 47% of the total General Fund. (See Pages 29 - 34)
• Culver City’s General Fund Reserve target is the highest at 30%. The City of Beverly Hills was second at 25%. Brea and Campbell had the lowest reserve targets at 10%. (See Page 36)
No recommendations are being made from this Study at this time. Pending further direction, in-depth analyses may be conducted.
FISCAL ANALYSIS
Receipt and filing of this report does not create a fiscal impact.
ATTACHMENTS
Municipal Financial Benchmarking Study
RECOMMENDED MOTION(S)
That the City Council:
Receive and file the Municipal Financial Benchmarking Study.