Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO: Vancouver City Council

FROM: Director of Finance

SUBJECT: 1999 Operating Budget - Preliminary Report

RECOMMENDATION

A. THAT the preliminary estimates of the 1999 Operating Budget, as summarized in this report and in Appendix 1, be received for information, noting that the estimates suggest a general purposes property tax increase of 4.4% to bring the budget into balance.

B. THAT the budget initiatives detailed in Appendix 2 and reflected in the current budget position, including changes to the On-Street Parking Program ($250,000 net revenue) and elimination of the By-Law Fines Pre-Collection Service ($110,000 expenditure reduction) be approved.

C. THAT the preliminary estimates be referred back to the Corporate Management Team and the Budget Office for detailed review and report back, and THAT this review to be focused on:

D. THAT the Director of Finance, in consultation with the Corporate Management Team, report back to Council with the interim estimates and a plan for bringing the budget into balance.

CONSIDERATION
E. THAT, should Council wish to reduce the level of the general purposes tax increase below the projected 4.4% level, then the proposals on expenditure program changes (Appendix 3) submitted by the Corporate Management Team be considered by Council at the meeting of City Services and Budgets Committee on February 25, 1999.

CITY MANAGER COMMENTS

COUNCIL POLICY

The Vancouver Charter requires the Director of Finance to present the estimates of revenues and expenditures to Council not later than April 30 each year and for Council to adopt a resolution approving the budget and a rating bylaw establishing general purpose tax rates as soon thereafter as possible.

The process of developing the Operating Budget normally involves three reports to Council. The preliminary report, presented early in February, outlines the position of the budget prior to a detailed review and seeks Council instruction on the overall budget envelope that meets Council's budget and taxation targets. Subsequent reports submitted in April each year, bring the detailed estimates to Council for final consideration and approval.

It has been Council policy that general purpose tax increases associated with development of the Operating Budget be held within the range of local inflation.

In approving the annual budget, Council has adopted a practice of passing tax increases related to requisitions from outside agencies, including the Greater Vancouver Sewerage and Drainage District, through to taxpayers rather than forcing offsetting reductions in City programs and services to meet Council's taxation objectives.

It is Council policy that changes in service levels, either expansions or reductions be approved by Council. This includes the creation and deletion of regular positions and the allocation of funding from revenues or taxation.

PURPOSE

This report is the first in a series of reports that Council will consider leading to approval of the 1999 Operating Budget by April 30.

BACKGROUND

On October 6, 1998 and October 23, 1998, Council considered a report from the Director of Finance outlining the projections for the 1999 Operating Budget. The budget position in the projections would have required a property tax increase of 3.1% in order to bring the budget into balance. However, recognizing that this position exceeded Council's taxation policies, the Director of Finance and the Corporate Management Team proposed two recommendations, approval of which were intended to establish an acceptable envelope within which the 1999 Operating Budget would be developed.

A. THAT Council instruct staff to develop the 1999 Operating Budget by working to a maximum increase in property taxes of 1.9%, reflecting a 1% increase related to increases in City expenditures and 0.9% related to growth in the requisition from the Greater Vancouver Sewerage and Drainage District.

B. THAT Council approve the revenue and expenditure adjustments to the 1999 Operating Budget proposed by the Corporate Management Team and outlined in this report and summarized in Appendix 2.

Recommendation B referenced new revenues totaling $200,000 and a series of adjustments to the City's expenditure program totaling $3.5 million as follows:

Business Group

Net Funding Change

Nature of Change

Fire

$464,000

equipment to reserve status

Police

1,173,000

administrative restructure

Library

275,000

general service reductions

Community Services

130,000

reduce policy/planning work

Corporate Services

207,000

general operating efficiencies

Park Board

367,000

horticulture maintenance

Engineering Services

451,000

general service reductions

Strategic Initiatives Fund

350,000

service improvement funding

Grant Program

100,000

withhold inflationary increase

Total

$3,517,000

 

While the expenditure program changes recommended by the Corporate Management Team and approved by Council, were generally targeted to take advantage of efficiencies in departmental operations and at reducing administrative costs, the report noted that theywould result in an increase in administrative burden within the organization with the potential to impact public service levels. The report also noted that further program changes would likely have to touch on direct services to the public.

On October 23, 1998 Council also considered a proposal put forward by the City Manager and the Chief Constable which provided police resources and funding as a first step to deal with the growing problems in the Downtown Eastside. Council approved the following recommendation:

Although discussions with the Police Board related to the agreement noted in this recommendation have continued, the Board has not formally responded to the proposal. However, on the expectation that Council wishes to proceed with the initiative, and that the Police Board will participate in the plan, funding for this program remains part of the budget position outlined in this report.

In putting forward the recommendations in the October report, the Director of Finance and City Manager noted that there were several potential threats to meeting the proposed budget target. These included concerns over continuation of Equalization Grants from the Provincial Government; access to the road maintenance recoveries from the Greater Vancouver Transportation Authority (GVTA); outstanding issues with respect to the Police Budget; the costs associated with the transfer of fire and police dispatch services to E-Comm; and the strength of revenues earned from the development and building industry which was experiencing a significant downturn in activity.

The effect of these three recommendations was that Council established an overall limit on the size of the 1999 Operating Budget and an overall property taxation target for 1999 reflecting a 2.9% increase. This tax increase was comprised of the following components:

· growth in the City's base budget1.0%
· Downtown Eastside Police Team1.0%
· increase in Regional Sewerage costs0.9%

DISCUSSION

Since the budget projections were considered by Council in October, the process of developing the 1999 Operating Budget has continued. The process involved review and updating of the estimates of revenues, debt charges and regional sewer costs from the budget projections to ensure they reflect actual experience from 1998, as well as any additional information available since the fall. In addition, the Budget Office has worked with departments to develop expenditure targets upon which departmental budgets will be based. These budget targets make provision for estimated costs of providing 1998 program and service levels at 1999 costs, as well as for changes in expenditure levels arising from Council decisions on new or expanded levels of service. Adjustments have also been made to the budget to reflect expenditure program changes approved by Council in October.

This work has led to many changes in the budget position considered by Council in October, 1998 and suggests that there are difficult decisions to be made if the 1999 tax increase is to be held to 2.9%. If Council were to fund all of the changes reflected in the current budget position, it would require a general purposes property tax increase of 4.4%.

SIGNIFICANT DRIVERS IN THE CURRENT BUDGET POSITION

The most significant changes reflected in the preliminary estimates follow from the issues raised by the Director of Finance and Corporate Management Team in the October, 1998 projections. These are reviewed below:

1. Elimination of Provincial Equalization Grant

2. Delay in Major Road Network Maintenance Recovery from the GVTA

3. Increases in Public Safety Budget Estimates

4. Revised Estimates for Development and Building Fee Revenues

In addition to these negative impacts on the budget, there has been one additional event that has had a positive impact on the budget position that was presented in October:

5. Deferral of the Debenture Program

CURRENT POSITION OF THE 1999 OPERATING BUDGET

The impact of these and a series of other less significant changes in the budget is reflected in the preliminary estimates shown in the following table:

A more detailed summary of the preliminary estimates is attached as Appendix 1.

As noted, the current budget position, reflecting a 4.4% increase in property taxes, represents a net increase from the 2.9% tax increase target established for development of the 1999Operating Budget in October, 1998. This increase can be summarized as follows:

1. The Revenue Estimates

Overall, the revenue estimates in the preliminary budget show no change from the 1998 budget level at $502.3 million (excluding Waterworks and Solid Waste Operations). This represents the net impact of several changes:

Taxation Revenue has increased 1.1%, prior to consideration of a property tax increase, primarily as a result of two factors

· new construction revenue has been established at $4.45 million, down from $4.8 million in 1998 but about 10% higher than the October budget projections
· grants in lieu of taxes revenues are anticipated to be up as a result of the updated inventory of Port of Vancouver property and the addition of new properties to other senior government grantable properties.

General Revenues are down 3.1% from 1998 to $110 million. This report has documented the changes brought about by elimination of provincial grants and the downturn in the construction industry, the two primary drivers of this decline. However, there are several other areas that have influenced the current budget position.

· Short term investment earnings are anticipated to decline by 3.7% in 1999, primarily as a result of the delay in the debenture program discussed above. With lower cashbalances in the early part of the year, these earnings are expected to decline by up to $500,000.
· Revenues from the On Street Parking program are expected to increase by 5.6% as a result of increased parking meter rates and improved enforcement activity. Recommendation B of this report proposes increases in these revenues that are reflected in the current estimates.
· Property Rental revenues are expected to increase by 1%, primarily the result of assessment changes on City owned property.

Transfers from Other Funds and Reserves will decline 5.2% from the 1998 levels. The transfer from the Property Endowment Fund will remain at $7.0 million, however, the surplus on the City's Sinking Fund will fall to $4.8 million from $5.4 million in 1998. Lower interest rates on investments in the Sinking Fund have resulted in the reduction of $2.4 million annually since 1996.

2. The Expenditure Estimates

The preliminary estimates indicate an expenditure budget of $517.75 million, up 3.0% from 1998. The October 1998 report on the Budget and this report document the factors that have led to this increase. What is worth noting here is that there is a considerable increase in departmental operating expenditures in 1999, beyond the normal inflationary growth in the budget. A review of the budget summary in Appendix 1 indicates that for most operating areas, funding increases are limited to the additional costs flowing from collective agreements and general inflationary pressures. In some cases, these increases have been mitigated by the expenditure program changes approved by Council in October.

However, in selected areas, there have been increases that go beyond inflation, mostly related to the uncontrollable changes in expenditures or recoveries or the addition of new programs/services. These circumstances are having a significant impact on the increase in the expenditure budget.

The reduction in Debt Charge expenditures were dealt with earlier in this report. Without the deferral in the debenture program, Council would have been faced with a potential additional property tax increase of 1.5%. This deferral is not permanent and debt charges will increase in future years as the capital expenditure program gets caught up.

Regional Sewerage Charges have increased by 13% from 1998, to $28.2 million. This reflects projected growth in the regional sewerage program as well as the phase-in of BODS/TSS charges to municipalities. Council has adopted a resolution to pass this increase through to taxpayers as a 0.9% tax increase.

Transfers to Reserves includes two provisions. Funding for Capital from Revenue is set at $12.3 million, consistent with the 1997-1999 Capital Plan funding plan. Also included in the final $1.0 million of Community Centre capital funding approved by the voters in 1996. Other transfers include a provide for the cost of the 1999 civic election and funding for the Information Systems Long Range Financing Plan.

3. Status of Contingency Reserve

Contingency Reserve is intended to provide funding for issues that arise during the year or for which there is some contingent liability that cannot be accurately quantified at the time the budget is set. The preliminary estimates include a Contingency Reserve provision of $1.8 million, which is consistent with normal funding at this point in the budget.

The Contingency Reserve provision, representing 0.3% of the expenditure budget should be considered minimal at this point in the budget process. For example, the estimates currently make no provision for the costs of fighting a significant snowfall: costs to date will have to be funded from Contingency Reserve. If these costs increase much beyond current levels, additional funding will have to be added to the Operating Budget.

Contingency Reserve must also provide for the 1999 costs of any additional programs or services approved by Council during the year. Staff have identified a series of program/service reports that are expected to be dealt with by Council over the next few weeks, some by Council request, others arise from ongoing activities in departments. These initiatives include:

· City Plan Neighbourhood Visioning program ($420,000 to in 1999 / $2.25 to $2.9 million total))
· Transportation Plan Monitoring ($80,000 annually)
· Downtown Transportation Plan ($237,000 in 1999 / $400,000 in 2000)
· SAP Sustainment ($100,000 in each of 1999 and 2000)
· Information Technology Staffing ($100,000 in 1999 / $200,000 ongoing)
· Human Resources Staffing ($75,000 in 1999 / $125,000 ongoing)
· Policing costs related to Grey Cup ($125,000 one time)

In addition, the 1999 preliminary estimates make no provision for City costs associated with administering the revitalization plan for the Downtown Eastside, beyond the funding provided to the Police Department. If funding is received from the federal government in support of this program, additional City costs can be expected to be in the range of $250,000 in 1999.

The current level of funding in Contingency Reserve will not provide adequate funding forall of these initiatives. If Council is inclined to undertake any of this work, additional funding is recommended in Contingency to at least offset the approvals.

OPTIONS FOR COMPLETING DEVELOPMENT OF THE BUDGET

Council has a range of options for completing development of the 1999 Operating Budget. At either end of this range are the following options:

1. Approve the Preliminary Estimates as Presented Accepting a 4.4%Tax Increase

2. Adjust the Expenditure Program to Reduce the Tax Increase Below 4.4%

In anticipation that Council would wish to consider both expenditure program changes, the Corporate Management Team developed a series of revenue and expenditure program proposals for consideration. These proposals were developed by the General Managers, each of whom was given a target based on the size of their departmental budget in order to identify a total of $5.0 million in expenditure program changes.

Upon review of these proposals. CMT determined that those involving additional revenues or recoveries and expenditure changes not impacting on service levels should be included in the preliminary estimates. In addition, two proposals which require Council approval (detailed in Appendix 2) are included in the current budget position and are recommended by the CMT (Recommendation B):

· elimination of the Bylaw Fines Pre-Collection Service ($110,000)
· changes to On-Street Parking (meter rate) charges ($250,000)

The balance of the proposals, totalling $5.9 million are summarized in Appendix 3 and are presented for Council's consideration. Details of the proposals from City departments areincluded in Appendix 3. The Police, Library and Park Board have provided only general descriptions of their proposed reductions. The following table summarizes the departmental targets; the proposals included in the current budget or recommend for approval; and targets remaining for Council consideration:

Business Group

 

Target

Included in
Estimates

Balance for Consideration

City Manager (note 1)

 

$0

$0

$0

Corporate Services

 

320,000

220,000

93,000

Human Resources

 

51,000

0

44,500

Fire & Rescue Services

 

887,000

0

769,000

Engineering Services

 

665,000

250,000

281,000

GVTA Recovery

 

0

0

1,800,000

Community Services

 

206,000

0

206,000

Grants

 

159,000

0

159,000

Park Board

 

577,000

0

577,000

Police Board

 

1,644,000

0

1,644,000

Library Board

 

397,000

0

397,000

Total

 

$4,906,000

$470,000

$5,970,500

Note: The City Manager includes the Office of the City Manager, City Clerk, Civic Theatres and Britannia Community Services Centre. No specific proposals have been submitted by this group, however, one of the objective of a detailed review of these budgets will be to identify the appropriate level of reductions to be reported back with the interim estimates.

In reviewing the proposals, Council will note that, for the most part, they impact directly on public service, by either increasing the cost of access to service users or by reducing the level of services provided. This is reflective of the comments made by the Director of Finance and the City Manager in the October 1998 report on the budget that the organization is generally beyond the point where reductions can be absorbed without direct public service impacts.

The proposals do not represent the full range of expenditure program changes that might be considered by Council, however, they are considered to be of lowest priority to the responsible General Managers and are changes that are reasonably achievable in the near term. If Council has other service areas that it wishes to consider in this process, it wouldbe appropriate to request a report back for the City Services & Budgets Committee meeting on February 25, 1999.

NEXT STEPS IN DEVELOPING THE BUDGET

In addition to the options presented to Council for dealing with the projected property tax increase, there is the need for a detailed review of the preliminary estimates submitted by departments. As a result, it is recommended that Council refer the preliminary estimates to the Budget Office to conduct that review with departmental staff, with instructions to:

- bring departmental budgets within appropriate target levels, reflecting only the cost of providing 1998 service levels at 1999 costs.
- remove any supplemental requests that reflect increase service levels or new programs or staffing and instruct departments to bring these requests to Council for consideration, with appropriate offsetting expenditure reductions or revenue increases

It is anticipated that the interim estimates would be ready to report back to Council in early April.

CONCLUSION

The preliminary estimates of the 1999 Operating Budget indicate that a property tax increase of 4.4% would be necessary to provide for the costs of base City programs and the added basic costs associated with new programs approved by Council. This increase compares with the target tax increase of 2.9% approved by Council in October, 1998 and indicate the impact of:

· elimination of Provincial Equalization Grants
· cyclical downturn in revenues from the development and building industry

· delay in major road network recovery from the Greater Vancouver Transportation Authority

· increased public safety costs
· deferral of the City's debenture program

Council has a range of options for completing the budget cycle with a balanced budget. Approval of a 4.4% tax increase would achieve that result without impacting on public service. Reduction to the expenditure program totalling approximately $5.0 million would be required to bring the budget into balance at the 2.9% target established in October.

The next steps in the budget cycle will be for the estimates to be referred to the BudgetOffice and departmental staff for detailed review. This review is intended to ensure that only sufficient funding to provide for approved service levels is provided in the 1999 Operating Budget. The Director of Finance, in consultation with the Corporate Management Team will report the results of that review as the 1999 Operating Budget - Interim Report early in April.

* * * * *


ag990216.htm

SECTION 1: Summary of Revenues

Taxation Revenues:

         

Base Tax Levy

348,104

351,691

365,322

3.9%

377,256

Base Tax Levy

348,104

351,691

365,322

3.9%

377,256

New Construction

0

 

4,650

 

3,574

Tax Adjustments

0

(2,000)

(2,000)

0.0%

(2,000)

Net Taxation Revenues

348,104

349,691

367,972

5.2%

378,829

           

Receipts in Lieu of Taxes

19,064

18,128

19,028

 

19,028

Local Improvement Taxes

5,064

4,439

4,610

 

4,600

Penalties and Interest

3,654

3,600

3,700

 

3,700

Total Revenue from Taxation

375,886

375,858

395,310

5.2%

406,157

           

Other Revenues:

         

Provincial -Local Government Grants

5,839

5,839

3,555

-39.1%

3,555

Interest on Temporary Investments

9,810

10,903

10,500

-3.7%

10,500

License Fees

10,636

11,042

11,050

0.1%

11,161

Rentals

13,712

14,028

14,168

1.0%

14,308

Municipal By-Law Fines

8,468

8,998

9,167

1.9%

9,176

On Street Parking Revenue

10,754

11,705

12,705

8.5%

12,755

Refuse Collection

2,356

utility

0

na

0

Refuse Disposal

8,298

utility

0

na

0

Service and Inspection Fees

19,531

18,587

16,120

-13.3%

16,521

Civic Theatres Revenue

4,515

4,573

4,594

0.5%

4,667

Park Board Revenues

23,475

25,050

25,300

1.0%

25,679

Miscellaneous Fees & Receipts

2,087

2,804

2,830

0.9%

2,867

Total Other Revenues

119,482

113,529

109,989

-3.1%

111,188

           

Total Revenues before Transfers

495,368

489,386

505,299

3.3%

517,345

           

Transfer from Other Funds/Reserves:

         

Sinking Fund Prior Year Surplus

7,250

5,482

4,800

-12.4%

4,500

Property Endowment Fund

7,000

7,000

7,000

0.0%

7,000

Art Gallery Reserve

139

150

150

0.0%

150

Revenue Surplus

0

0

0

na

0

Other

1,315

500

500

0.0%

0

Total Transfer from Other Funds

15,704

13,132

12,450

-5.2%

11,650

           

Total Revenues

511,072

502,519

517,749

3.0%

528,995

           

           

SECTION 2: Summary of Expenditures

         

General Government

         

Mayor & Aldermen

1,122

1,229

1,313

6.8%

1,262

General Administrative

22,658

24,083

24,105

0.1%

24,464

Other General Government

8,656

4,386

5,432

23.9%

8,351

Real Estate and Property Management

5,787

5,618

5,509

-1.9%

5,592

Community Services Administration

2,306

2,856

2,760

-3.4%

2,934

Housing Programs

615

1,239

1,253

1.1%

1,272

Planning

8,072

8,018

8,350

4.1%

8,236

Total General Government

49,216

47,429

48,723

2.7%

52,111

           

Protection to Persons & Property:

         

Police Services

108,926

109,382

116,335

6.4%

121,462

Downtown Eastside Police Team

0

0

3,200

na

0

Fire & Rescue Services

59,154

59,006

61,013

3.4%

62,707

E-COMM Services

included in Fire and Police in 1999

 

Permits & Licenses

11,803

12,853

13,000

1.1%

13,196

Animal Control

732

717

726

1.1%

737

Vancouver Emergency Program

145

218

220

1.1%

223

Total Protection to Persons & Property

180,759

182,177

194,493

6.8%

198,325

           

Engineering Services

         

Administration & General

2,684

1,579

1,422

-9.9%

1,444

On Street Parking Program

5,469

5,603

5,667

1.1%

5,752

Transportation Division - Traffic Planning

5,317

5,670

5,715

0.8%

5,801

Electrical Division - Street Lighting

6,274

6,066

6,095

0.5%

6,187

Sanitation - Refuse Collection/Disposal

20,061

utility

0

 

0

Street Cleaning

5,565

5,786

5,852

1.1%

5,940

Sewers Operations

4,978

5,457

5,494

0.7%

5,577

Streets, Bridge & Walkway Maintenance

12,370

14,097

13,941

-1.1%

14,152

Total Engineering Services

62,718

44,257

44,186

-0.2%

44,853

           

Cemetery

679

751

760

1.1%

771

Social Planning

1,454

1,618

1,637

1.1%

1,661

           

Recreation & Community Services:

         

Parks & Recreation

60,821

63,453

64,442

1.6%

65,027

Britannia Service Centre

2,294

2,293

2,319

1.1%

2,354

Carnegie Centre

1,985

2,012

2,035

1.1%

2,066

Dowtown South Gathering Place

1,416

1,436

1,452

1.1%

1,474

Vancouver Public Library

26,719

27,225

27,261

0.1%

27,677

Civic Theatres

4,825

4,740

4,794

1.1%

4,867

Archives

677

688

696

1.1%

706

Total Recreation & Community Services

98,737

101,847

102,998

1.1%

104,170

         

Grants:

         

Community Service Grants

2,850

2,926

2,955

1.0%

2,985

Cultural Grants

3,004

3,089

3,018

-2.3%

3,049

Childcare Grants

662

673

679

1.0%

686

Major Facility Grants

3,414

3,451

3,288

-4.7%

3,338

Other Grants

439

450

455

1.0%

308

Grants

10,370

10,588

10,295

-2.8%

10,365

           

Contingency Reserve

(73)

2,871

1,818

-36.7%

3,500

           

Total Before Debt Charges & Transfers

403,861

391,539

403,273

3.0%

415,756

           

Debt Charges

         

General

36,528

38,480

36,796

-4.4%

38,493

Local Improvements

5,064

4,439

4,610

3.9%

4,600

Solid Waste

45

utility

utility

 

0

Sewer

27,668

27,621

26,582

-3.8%

24,544

Debt Charges Equalization Reserve

 

1,150

0

 

0

Total Debt Charges

69,305

71,689

67,988

-5.2%

67,637

           

Regional Sewerage Charges

         

Operating Costs

9,602

14,651

15,383

5.0%

15,568

GVSDD Debt Charges

12,300

9,558

11,213

17.3%

11,938

BODS/TSS Charges

0

781

1,641

110.0%

2,246

Total Regional Sewerage Charges

21,902

24,990

28,237

13.0%

29,752

           

Transfers to Reserves/Funds

         

Capital Purposes

9,068

10,650

12,350

16.0%

12,000

Other Transfers

3,600

3,650

5,900

61.6%

3,850

Total Transfers to Reserves/Funds

11,132

14,300

18,250

27.6%

15,850

           

Total Expenditures

506,200

502,519

517,749

3.0%

528,995

           

Estimated Revenue Surplus

4,872

0

0

 

0

Total Expenditures & Revenue Surplus

511,072

502,519

517,749

3.0%

528,995

           

Percent Change in Expenditures

0.19%

-0.73%

3.03%

 

2.17%

           

Tax Increase to Balance Budget

   

4.4%

 

2.1%

APPENDIX 2

1999 Operating Budget
Revenue / Expenditure Budget Adjustment Proposal

Department Corporate Services Item No. 1

Service Area or Program: By Law Fines - Pre Collection Service

 

Revenue / Expenditure Proposal Summary:

To terminate the pre collection service program

 

Detail of Proposal:

Over the past four years, the City has been making various changes to bylaw fines collection procedures, including:

    -moving from a three tier to two tier penalty structure and reducing the payment timeframe
    -increasing payment options, including paying at banks/ATMs, debit/credit cards, pay by phone (creditcard)
    pay by mail (credit card) - and we are presently working on an Internet payment option
    -implementing the pre-collection service - basically a call at day 22 for unpaid tickets, reminding the person of
    the unpaid ticket, and offering information on payment options.
    -increasing the number of process servers
    -increasing the fine levels

The pre-collection service was just one of a number of measures which we were taking to try to encourage/enforce payments. It was our belief that we should not just send mailed notices to the alleged offenders, and that there should be a human contact at some point, prior to serving a summons. However, there has been lots of controversy around the service. There are many complaints about the phone contact and staff spend a lot of time responding to complaints from the public, and enforcing service standards with the contractor.

The program was initially justified on the basis that the cost of the service would be matched by higher collections. Initially, the analysis confirmed that the rate of payments by those contacted by the program was higher than those not contacted. Recent analyses suggest that the there is not a significant difference between the two groups.

Accordingly, our continuation of this program cannot be justified based on hard data, and the intangibles which the program delivers are offset by the complaints which staff are dealing with.While it has been a good experiment to run this program, and it probably had an important role to play during the transition periods in the collection programs, staff now believe that the program should lapse, and let staff focus on other areas such as Internet payment, handheld ticket writing machines, and increased summons serving.

1999 Net Reduction $
Annualized Net Reduction $
FTEs Affected


100,000
110,000
0


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