Fiscal Year 2013-2015 Special Budget Meeting

FILED OFFICE OF JHE cn t Ci tREDISTRIBUTION DATE: 6/10/13 2013 JUN 2! AM 8=58 MEMORANDUM CITY OF OAKLAND TO: HONORABLE MAYOR & FROM: Donna Hom CITY COUNCIL Budget Director SUBJECT: Federal and State Budgetary Actions DATE: June 10, 2013 Standing Report City Administrator Date Approval /s/ Scott P. Johnson 6/10/13 I N F O R M A T I O N During the May 14, 2013 and May 28, 2013 Finance and Management Committee, the Assistant City Administrator verbally reported the latest known Federal and State budgetary actions that may have financial implications to the City of Oakland. This memorandum memorialized the presentation as well as provides additional detail that has recently become available. Federal: Sequestration Federal government allows each agency to have flexibility to meet the target budget reduction from Sequestration. The measures range from furloughs (Internal Revenue Service) to operational cost cuts (Information Technology). We had previously provided information in April 2013 on fiscal impacts derived from sequestration due to reduced federal funding available to our Head Start and Housing programs. Below is additional details related to the impacts of our Head Start Program. Head Start The impact from sequestration to the City of Oakland Head Start program is approximately $954,467, which will take effect on September 1, 2013. Currently, the City matches approximately $250,000 to the Head Start grant of $18,352,486. The City also supports the program through an annual waiver of the City's Central Service costs in the amount of approximately $2 million. The Central Service Costs include indirect support to the program from internal services such as Controller's office, payroll, human resources, legal, etc. Currently, the program serves 1,778 children (slots). As the result of sequestration and service cost increases, the proposed Policy Budget for FY 2013-15 assumes the closure of the San Antonio and Eastmont Centers in which 102 slots of enrollment reduction would occur. However, the Mayor and City Administrator's FY 2013-15 Proposed Policy Budget proposed to