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HomeMy WebLinkAboutAgenda Packet - CC - 2016.03.16NGAMEBURLI City of Burlingame BURLINGAME CITY HALL 501 PRIMROSE ROAD BURLINGAME, CA 94OIO Meeting Agenda - Final City Gounci! wednesday, March 16, 2016 6:30 PM Council Chambers Note: Public comment is permitted on all action items as noted on the agenda below and in the non-agencla public comment provided tor in item 1. speakers are asked to filt out a 'request to speak' card located on the table by the door and hand it to staff, although the provision ot a name, address or other identifying information is optional. Speakers are limited to three minutes each; the Mayor may adiust the time limit in tight of the number of anticipated speakers. All votes are unaniflous unress separately noted for the record. 1. CALL TO ORDER - 6:30 p.m. - Council Chambers 2. PLEDGE OF ALLEGIANCE TO THE FLAG 3. ROLL CALL 4. PUBLIC COMMENTS, NON-AGENDA Members of the pubtic may speak about any item not on the agenda. Members of the public wishing to suggest an item lor a future Council agenda may do so duing this public commont peiod. The Ralph M. Brown Act (the State local agency open meeting law) prohibits the CW Council from acting on any matter that is not on the agenda. 5. INTRODUCTORY REMARKS - Lisa Goldman, City Manager Printed on 3/11/2016 6. STAFF REPORTS AND COMMUNICATIONS (Public Comment) a. Adoption of a Resolution Amendinq the FY 201 5-'16 Operatinq and Capital Budqets to Reflect the Recommended Mid-year Adiustments and Adoption of a Resolution Further Fundino the Renewal and Replacement Reserve in the Ciw's CaDital Proiects Fund Allachrnen'sj Staff Reoort Resolution - Mid-vear Budoet Amendments Resolution - Fundino of Renewal & Reolacement Reserve City Council Meeting Agenda - Final b 7, COUNCIL DIRECTION ON BUDGET POLICY ISSUES 8. ADJOURNi'ENT Notice: Any attendees wishing accommodations for disabilities please contact the City Cled< at (6O0)550-7203 at teast 24 hours before the meeting. A copy of the Agenda Packet is available fot pubtic rcview at the cily clerk's otfice, city Hall, 501 Primrose Road, from 8:00 a.m. to 5:00 p.m. before the meeting and at the meeting. Visit the City's website at www.buflingame.org. Agendas and minutes are available al th,s slte. NEXTCITYCOUNCILMEETING-NextregularCityCouncilMeeting'Monday,March21, 20't6 VIEW REGULAR COUNCIL iIEETING ONLINE AT WWW'BURLINGAME.ORG - GO TO "CITY COUNCIL VIDEOS" Any witings or documents provided to a mahnty of the city council regarding any item on this agenda wil be made avaitable for public inspection at the Water Otfice counter at City Ha at 5O1 Pimrose Road during nomal business hours. Pdntoel on 3n1/2o16 March 16,2016 Review of Draft FY 201G17 General Fund. Gas Tax. Measure A. and Measure M Funds Caoilal lmorovement Prooram (ClP) Anachments: Staff ReDorl Drafr FY 2016-17 G€neral Fund CIP SDreadsheet PowerPoint Presentation City ol Budlngane STAFF REPORT I,IEETING DATE: March 16,20'16 To:Honorable Mayor and City Councit Date: March 16,2016 From: Carol Augustine, Finance Director - (6501 558-7222 Subject:Adoption of a Resolution Amending the FY 2015-16 Operating and Capital Budgets to Reflect the Recommended Mid-year Adjustments and Adoption of a Resolution Further Funding the Renewal and Replacement Reserve in the City's Capital Projects Fund Staff recommends that the City Council accept the FY 2015-16 Mid-year Financial Summary and Five-Year Financial Forecast, and adopt the attached resolulions amending the FY 2015-16 Operating and Capital Budgets to reflect the recommended mid-year adjustments and further fund the Renewal and Replacement Reserve in the City's Capital Projects Fund. BACKGROUND This report summarizes the City's mid-year fiscal status by providing an analysis of anticipated revenues and expenditures in comparison to the current adjusted budget for the 2015-16 fiscal year. Revised forecasts incorporate final201+15 fiscal year results, year{o-date cash flow, and other data points that were not available when the budget was originally developed. To the extent possible, trends or emerging items that were not included in the City's operating budget have been identified, and the budgetary impacts of these items have been assessed. ln addition, this report notes changes in activities that have very little overall impact to the budget, but allow for better alignment with Council goals and departmental directives. Although the focus of the mid-year review is the City's General Fund, this report also provides an update for other funds where fiscal changes are noted. The attached budget resolutions are recommended so that the current budget will not only provide the proper funding needed to carry out the programs and activities anticipated through June 30, 2016, but will also more accurately reflect the financial condition of the City as it enters the FY 2016-17 budget process. Having the latest projections reflected in the current budget enhances the forecasting process and allows decision makers to have greater confidence in the information provided within the budget development framework. ln addition, during this time of economic groMh, the City is able to set aside further funding for an ever-growing list of unmet capital needs. Considering current economic conditions and this most recent analysis of operations, staff has updated the assumptions and projections incorporated in the City's five-year financial forecast for AGENDA NO: 6a RECOMMENDATION March 16, 2016 the General Fund. This long{erm forecast establishes an appraisal of fiscal sustainability beyond the current budget cycle, providing important context to the annual budget process. DISCUSSION Economic Conditions National Economy At the time the City's FY 2015-16 budget was being prepared, the national economy was in its fifth year of a gradual recovery from the worst recession since the Great Depression of the '1930s. Most forecasts indicated that the economy would continue to grow at a moderate pace, perhaps less sporadically than in the years immediately following the recession. The single largest driver in the economy in 2014 had been significant improvements in the job sector, with the unemployment rate falling below 6 percent nationwide. Businesses had begun lo increase capital investments, the housing market was providing momentum for the construction industry, and consumer sentiment was improving. Consumer spending had added 1.7 percent to overall GDP groMh in 2014 - the best showing since 2006. GDP growth was anticipaled to be in the range of 2.8 lo 3.2 percent. ln the end, U.S. real GDP increased 2.4 percent in 2015, the same rate as in 2014. Although this measure of the nation's economic growth would indicate a pace similar to previous years of moderate recovery, the numbers actually reflect strength in the midst of global economic turmoil and plunging commodity prices. According to Beacon Economics, a leading independent economic research and consulting firm, low inflation and interest rates continue to support spending. As such, real GDP growth is projected to grow at about 3 percent in upcoming years. U.S. Real Gross Domestic Product Quarter-to-Quarter Growth, Annualized 3 906 NNNNNNNNNNNNNNNNoooooooooooooooo + 5 ! + !f !f !a !4 e o c., 9., .{ ..r :{ :Joooooooooooooooo(r!JN(r5JN(ro5-N.J5 t: 0.0vo -1 006 -2.0v" 4 3o/o 3 0.4 3.1olo 3 ool. 2.9% 2 2',,2 1',. 9o/o Forecast I Sourc.: U.S. Bur..u of Economic An lysis: CA O.p.rnn.nt of Financ! Gov.rno/3 Budgpt For.cast. 2 20 1 5-1 6 Mict-Ye ar Re poft 201 5-16 Mid-Year Repo,l March 16, 2016 The U.S. unemployment rate dropped to 4.9 percent in January 2016, its lowest level in eight years. However, most economists feel the labor markets are still far from full recovery, due to the higher than normal U-6 alternate unemployment rate, which accounts for discouraged and under- employed workers. While hiring appears to have slowed down (with only 151 ,000 jobs added in January), wages were up. lf this trend continues, this should bolster consumer confidence in the near future. Gasoline prices continued to fall, and the impact is finally producing spending increases in other categories. Although consumer spending is only inching upward, final demand (direct spending by US consumers, businesses and government) is growing at close to a 3 percent pace this year, one of the fastest rates since the start of the recovery. So, although lower gas prices are not good for all industries and areas of the country, the gains to the U.S economy are, on net, very positive. . a: ra .i tl _1t9 l I ::_ l.n:ill! Also helping the economy in 2015 will be low mortgage rates, which are below 4 percent. lnflation is very tame (at about 1.4 percent) because excess bank reserves remain steady. ln light of improvements in the economy, the Federal Reserve raised the benchmark interest rate by 0.25 percentage point for the first time in seven years in December 2015. Although the Fed was poised to continue to increase short{erm rates very gradually, minutes from the January Federal Open Market Committee meeting indicated that data on spending and production had been disappointing. Developments in commodity and financial markets, as well as the possibility of a signilicant weakening of some foreign economies, had the potential to further restrain economic growth. lnterest rates are still expected to increase, but only very gradually, in 2016. China's growth slowed in 2015, and there is some uncertainty about the growth path in the European Union. Slower growth in one or both could dampen U.S. growth as well. As it appears that the pace of global groMh will be slow at best, economists are not overly optimistic about any significant gains in the U.S economy. But the forces that drive internal growth are positive: rising incomes, low interest rates, moderate inflation and increasing profits should serve to keep the economy on track in the near future. 3 ,-: 2O1 5-1 6 Mid-Year Report March 16, 2016 State Economy California's economy also continues to improve. Governor Jerry Brown released his proposed budget in early January, predicting steady growth in the economy and making additional strides toward fiscal reform. As the strengthening economy continues to push revenues higher, his State budget proposal provides increased investments in K-12 education, community colleges and health programs, as well as further reductions in the State's long-term liabilities, and a further funding of the rainy day reserve. The turn-around in California's fiscal situation continues to provide optimism throughout the state's economy. ln fact, the state continues to be a significant source of the nation's current economic growth. California leads the nation in job groMh: the Professional and Business Services sector alone provided 1 16,000 jobs in 2015, reflecting a generally improving economic environment.. The Leisure and Hospitality (79,100 jobs) and Construction (41,000 jobs) sectors were another major source of growth as both the tourism and building industries have been thriving. Although still higher than the nation as a whole, the state unemployment rate has dropped to 5.8 percent from a peak of 12.4 percent in 2010. Yet much like the nation, California's labor force participation rate has reached historic lows of 62 percent. Many residents marginally attached to the labor force are expected to have better prospects in the coming years, and lhe unemployment rate is expected to fall very gradually as state-wide labor force participation stabilizes. Although economists from the UCLA Anderson Forecast expect California's unemployment rate to match the national rute in 2017, the Governor's forecast calls for the rate to be "insignificantly different" than the U.S. rate for the next several years. Frqre rcG03 U.S. drd CrtifornLa Unerploytneot Rde r2t r0t st oa * 0t Tg!I'EgEEE:::::8 $d -rE .&- rJ S .r...rd!t Sqo:CAEDO.LidrH.rtr,&rDi6a.C4O.t tlEr dF.re Gxi./t B'.dF F Ea Most economists expect real personal income growth, estimated to be 4.3 percent in 2015, to grow in the range of 3.2 percent to above 5 percent in each of the next two years, as a tighter labor market results in higher wages for more workers. 4 n \ \a March 16, 2016 Califomia's manufacturing industry has traditionally been very strong, and it currently has the largest manufacturing output in the U.S. However, high costs of doing business are incentivizing many firms to locate their manufacturing activities elsewhere. These companies are relocating abroad or to other areas within the U.S., such as the Southeast and Midwest. Manufacturing firms contributed 9.4percent of total private employment and generated 10 percent of gross state product. Expansion in the industry tends to be spurred by highly skilled processes. Electronic computer manufacturing was one of the faster{rowing subindustries, notching 7.3 percent groMh year over year. Continued strength from technology firms, especially in the San Francisco Bay area, supports electronics manufacturing demand. Nonmetallic mineral product manufacturing was another high{rowth segment in 2015. This subcategory produces glass, clay, lime and cement, and it is correlated to construction groMh. Real estate remains a driver of economic growth over the short run. ln regards to residential property, existing home sales in 20'l 5 represented a 6.3 percent increase over 2014; the Califomia Association of Realtors' forecast calls for existing home sales to rise an additional 6.3 percent in 2016. The state's rising prices are predicted to hold back home sales slightly. While the recent rate of home appreciation has slowed from the double-digit rates in 2013 and eady 2014, home prices state wide remain below their pre-recession peak of roughly $450,000' and the state continues to experience a Shortage of housing. The Califomia median home price is projected to increase 3.2 percent to $49 1 ,300 in 20 16, following an estimated 6.5 percent increase in 2015 to $476,300. Certainly housing prices have been rising faster than the overall index, and are expected to keep inflation somewhat higher than the nation. After a few years of relatively low levels of housing permits being issued, forecasters expect that strong growth will resume in 2016. The latest Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey found "continued confldence among developers through 2018". The biannual survey projects a three- year outlook for California's commercial real estate industry and forecasts potential opportunities and challenges affecting office, multi-family, retail and industrial sectors. The majority of office developers had a promising outlook for California, supported by job and income growth on the demand side and a lack of sufficient building on the supply side. However, anticipated slower growth outside the U.S. and the somewhat volatile world financial markets "dictate a bit of prudent caution", per the report. The proposed State budget indicates that nonresidential permits are already growing strongly as firms hire more people and expand their businesses. Local Economy On the global stage, the U.S. economy is a success story. But nationally, the recovery is bifurcated. People with 2oth-century skills are still struggling to find full employment. ln California there's a marked difference between the coastal counties and the inland counties in employment loss recovered. With its emphasis on the tech sector, the San Francisco Bay Area economy continues to outperform the nation. 2015-16 Mid-Yeat Repoft The Governor's budget also notes a slowdown in the global economy as one of the main risks to the state's economy. Stock market volatility adds additional risk to the forecast. Although the State is much befter positioned for the next economic contraction, a recession would likely be accompanied by a large fall in the stock market, strongly affecting state revenues. 201 5-16 Mid-Year RepotT March 16, 2016 While growth in FY2015-16 is expected to slow to a more moderate rate than experienced in the past two years, the Bay Area's economy is still expected to grow faster than nearly all other large metropolitan areas in the country. ln San Francisco alone, the economy expanded between 201'l and 2013 at a rate that outpaced the four largest groMh years of the dot-com boom. There are now more people employed in San Francisco than at any point before in the City's history. The tech sector has accounted for a quarter of the region's,ob growth since 2010. lf one considers the "multiplier effect" of tech employment (how many local jobs are created by each added tech worker), tech is responsible for two{hirds of the Bay Area's employment growth. This follows significant flows of venture capital money that have come into the area. San Francisco received over $8.5 billion in venture capital investment during the first half of 2015, a 53.4o/o increase over the first half of 2014. More importantly, despite concerns about another tech bubble in Silicon Valley, firms receiving venture capital are older and more stable than those in previous cycles. Other sectors that have contributed to the area's surge in job creation over the past year are Construction (6.3 percent), lnformation (6.2 percent), and Other Services (5.7 percent). Like the Professional, Scientific, and Technical Services sector, the lnformation sector includes high-tech industries, such as data processing and software publishing. These industries have seen considerable gains in recent years as many companies try to cash in on the'app'market and other media-related technology. With such strength in the labor market, the San Francism Metropolitan Area's unemployment rate is forecast to hold steady, in the 3olo to 3.5% range, through the end of 2020. A tightening labor market has the impact of driving higher wages for workers and an influx of people seeking opportunity. The growing population is putting pressure on existing housing, office space and infrastructure, all of which are struggling to expand within the constraints of the Bay Area. Although statewide there is a long{erm trend to construct more multifamily housing of the type demanded by most urban workers today, the places where there's demand are harder to build in. Construction in the region is cunenlly experiencing strong growth, with multi-family permitting particularly strong. During the first seven months of 2015, there were 3,034 multi- family permits issued in the region, a 43.7o/o increase over the first seven months of 2014. However, the region's high housing costs are expected to limit grov'/th in future years. Overall construction costs for commercial office buildings and tenant improvement projects are expected to continue to rise in the San Francisco Bay Area through 2016 and perhaps as far out as 2Q2O. While the price of construction materials is likely to trend downward in 2016 - the result of a relatively weak housing market and reduced demand from China - labor costs are likely to drive overall costs higher, especially in San Francisco, which already has higher than average labor costs in the construction sector. The median price for an existing single-family home in the San Francisco MD has climbed into record high territory, making this area the first in the state to surpass its previous peak for the median price of an existing home (set in 2007). Because the Bay Area's recovery is so strong, with its increasing work force in professional and technical occupations comes a surge in rental costs. The Bay Area rental market was brutal last year for people trying to find something they can afford. The region saw increases in 2015 of about 10 percent in San Francisco, 11 percent on the Peninsula, and 12 percent in the East Bay. And analysts say that it's not going to be much better in 2016. Atthough construction starts are at the highest level in about 30 years, new units 6 201 5-1 6 Mid-Year Report March 16, 2016 are priced to cover developers' costs and meet their profit projections. When the demand is high, rental rates go up. Beacon Economics sees home prices continuing to increase in the coming year, albeit at a slower pace than experienced over the past two years. Because the San Francisco Metropolitan area continues to be one of the United States' top tourist destinations, Burlingame has seen strong growth in hotel tax revenues and consumer spending. With an 84.7 percent occupancy rate in the first six months of this fiscal year, hotels in the area are among the most occupied in the country. (The nationwide average for hotel occupancy rates is 64.2 percent.) Revenues were up 12.6 percent from the same period last year. As noted in the General Fund Revenue analysis (Attachment A), transient occupancy tax receipts in fiscal year 2014-15 were nearly '11 percent ($2.3 million) higher than in the prior fiscal year. As in other cities in the region, spending on autos, general consumer goods, and restaurants was up through the first half of calendar year 2015. Burlingame sales tax receipts in the 3'd quarter of 2015 were 5.8 percent above the same quarter of the previous year. The largest growth was in the autos and transportation sector, as new motor vehicle dealer results combined with auto lease totals to generate this grov'rth. s8.000 t6,000 t,t,000 t2.000 t0 € t2 - Budingeme Q3 t3 Q3 1a County Califomia Again, although increasing incomes and wages among local residents has helped fuel taxable sales, the high cost of housing in the region could impede growth in consumer spending in coming years. As more and more residents spend a larger portion of their income on housing, less money is left to purchase goods and services. ln short, the state and local economic outlook is expected to coincide with the national outlook of continued recovery. As the San Francisco Bay Area is currently a "hot spot' for the growing economy, it may experience a stabilization effect sooner than other parts of the state. Even with the positive economic trends of the last three years, budgets have been developed with a relatively conservative approach. The recession brought home the realization that some of the City's largest sources of revenue are highly votatile, inexorably linked to the health of the general 7 SALES PER CAPITA Q3 15 2015.16 Mid-Year Repod March 16, 2016 Although renewed emphasis on budgeting for the longer-term will provide more certainty for future budgets, the City ernnot have a true budgetary "surplus' if unfunded needs continue to grow. The establishment of the Other Post-Employment Benefits (OPEB) trust account was a significant step in identifying unfunded liabilities and systematically providing for them within the operating budget. Although pension reform has somewhat curbed the growth of these liabilities, accrued obligations are being addressed by CaIPERS by increased employer contributions. Other liabilities await funding, however. The deferral of maintenance to infrastructure and facilities has resulted in an increase of projects on the City's list of "unfunded needs." Staff will strive to identify these deferrals and recommend their systematic funding within the operating budget (of the appropriate fund) whenever possible. General Fund The city's FY 201 5-16 budget anticipated that the economy would continue to grow at a moderate pace. Mindful of the difiicult budget reductions that were made following the recession, departments were not required to provide further expenditure reductions for this mad-year analysis. However, departments were asked to identify, to the extent possible, additional funding sources or revenues in order to offset any additional budgetary needs. Now, with more than half of the fiscal year of actual transactions under analysis, the City's year- end General Fund revenues are cunently pdected to be over $4.6 million higher than projected in the FY 2015-16 adopted budget. Most ofthe growth comes from increased tax revenues, and reflects real progress in terms of the local economy. Details of the City's General Fund Revenue analysis at mid-year are provided in Attachment A of this report. Expenditure budget revisions are discussed in more detail in Attachment B of this report. The adjustments reflect an attempt to adjust certain departmental budgets to more accurately reflect cunent needs, in response to unanticipated events, a change in programming direction, or access to information that was not available at the time the FY 2015-16 budget was proposed. The resulting budget should provide a clearer, more transparent picture of operating needs going fonrvard. This is particularly important in establishing the framework for the FY 2016-17 budget, where funds needed for continued service levels will be considered in the context of the City Council's established goals. General Fund - Revenues The following table shows the mid-year assessment of FY 201 5-16 General Fund revenues. There are three columns for fiscal year 2015-16. The "FY 2015-16 Cunent Budget" column shows the revenue budget adopted by the City Council last June. The "FY 2015-16 Mid-year I economy and events that cannot be anticipated in the short term. The recovery has been tentative at times, and accompanied by increases in certain operating costs - particularly in the area of personnel benefits - that need to be considered. The General Fund five-year financial forecast is provided in the final section of this report. ln conjunction with the General Fund Reserve Policy, this long-term approach to the City's budget helps ensure that future economic downturns can be managed effectively. 201 5-1 6 M id-Ye ar Re port March 16, 2016 Projection" column shows the most current projection for the fiscal year. The final FY 2015-16 column reflects a summary of proposed revenue amendments to the FY 2015-16 budget for the City Council's approval with this Mid-year Report. For comparison purposes, the table also includes the City's actual General Fund revenues in fiscal year 201+15, as well as flgures for the previous fiscal year. Yearto-date revenues are not included here as the timing variability within each different category greatly complicates the analysis and would make for a confusing presentation as a whole. However, year-to-date receipts may be discussed in the various categories of revenue as they relate to a revised FY 2015-16 projection. The key factors that pertain to staffs recommended adjustments to each of the City's General Fund revenue categories are discussed in Attachment A of this report. The amended forecast for the City's largest revenue sources (Property Tax, Sales Tax and Transient Occupancy Tax) is not only based on the previous year's receipts, but also on the continued strength of the local economy as reflected in cash receipts for the cunent fiscal year. ln fact, most revenue sources show continued improvement over the FY 2015-16 actual amounts, with receipts comparing favorably to the prior fiscal year. Note that last year's actual amounts included $"1 million in one- time revenue from Millennium Partners, the original Burlingame Point developer, per the approved Development Agreement, shown as "other revenue". There are no similar projections for future one-time revenues in FY 2015-16 or in the five-year forecast. Such items can be added when the amount and timing of these unanticipated receipts is certain. General Fund - Expenditures The following table shows the mid-year assessment of FY 2015-16 General Fund expenditures by department: o FY15-15 Midyear Pioi€ation FY15-16 Midyear Amendment Year-End Up (Oownl X l7,7t6,400 13,244,O00 25,200,000 816,400 1,659,000 2,100,000 6s,487,600 4,629 7.1% FY13-14 Actual FY14-15 Actual FY15-16 C!fient Eudget 15.496,548 10,196,123 2t3s7,066 t6,677,381 11,100,900 23,69a396 toperty Tax sales.nd t se l.r Tranahnt Ocaupancy Tax Othe.Tares FranchiseTar Business LicenSes StAtE HOPTR Real Property Tran5fe. Tax llc€nres & Permits tiner, Fodeiture! and Penahres Uie ot Money & ltopcrty cha4es fo. s€dices Othet Ravenue State Subventlons lntercst lncome Total, General Fund Revenue 1,583,000 1,000.000 66,000 350,000 85,000 96s,000 206,000 4 AO3,s00 30,000 175,000 400,000 s5,627,624 61,909,081 6ors8J00 CITY OF BURLINGAME, CA SUMMARY OF GENERAI. FUND REVENUES 4.4% 14.3% 9.t% 1,602,000 19,000 t.2% 973.000 -27,@0 -2.7% 66,000 0 0.0% 472!oO 112,000 31.1% 87,000 2,000 2.4% 836,000 -129,000 -13.4% 220,5@ 14,500 7.O1" 4,544,200 140,700 3.2% 46,500 16,500 55.0% 157,000 -18,000 -10.3% 323,000 -77,000 -19.3% 16,900,000 11,585,000 23,100,000 L57S,S2I L,579,976 981,821 965,675 54,968 64,810 347,855 436152 1tL,7!2 83,840 788,772 837,704 203,451 207,952 3,942,937 4,481,618 165,628 1,(x6,512 170,746 465,125 225,080 260,740 2015-16 Mid-Yeat Repod March 16, 2016 CITY OF EURLINGAME, CA SUMMARY OF GENERAT FUNO EXPEI{DITURES BY Gen€6lFund Proardm Generdl tovemment Public Sefety Public worts Community Development leisure & Cu ltuia l Services TOTAL, Operating Expenditures FY20l3-14 A.tuals FY2014-15 actuala FYt5-15 CuJaent gudget FY15-16 Midyear Projectio. FYlS-16 Midyear Amendment Year-End up(Ooun) % s5.870,151 79,775,505 3,339,585 1,0!.L,240 10,112,681 54,72t,895 22,7't3,494 4,769.a73 L,244,t99 !1,495,624 ss,L78/52 24571,008 4.971;135 L,563,474 L3,206,753 s5.1r2,"t52 24,936,m8 4,9t4,735 1,563,474 13,258,7s3 (s66,000) 36s,000 0 52,000 -t.3% 1.5% 0.o% o.o% 0.4% 5,o,r39,r52 S44,40s,084 S 49,134,722 5 49,7as,722 5 351,000 Again, there are three columns for fiscal year 2015-16. The "FY 201$16 Current Budget' column shows the budget adopted by Council in June 2015. Although the departmental budgets were intemally adjusted for encumbrances of the prior fiscal year, the encumbrances are excluded for this mid-year analysis. The second FY 2015-16 column shows the new mid-year projection for each department's expenditures for FY 2015-16. The final FY 2015-16 column shows the resulting amendments to the FY 2015-16 adjusted budget to reflect additional resources required (or anticipated operational savings) by departments for the remaining fiscal year. For comparison purposes, the table also includes the City's General Fund actual expenditure performance in fiscal year 2014-15, as well as figures for the previous fiscal year. Budgetary savings (positive expenditure variances) within the General Fund in fiscal yeat 201+15 were experienced in all departments, resulting in expenditures of $3.5 million (roughly 7.3 percent) less than budgeted for the fiscal year. Since local government expenditure budgets (appropriations) serve as the legal level of budgetary control, some level of savings will be realized in any fiscal year. Although departmental budgets were analyzed for both underfunded operating needs and anticipated budgetary savings, the focus was on ensuring budget adequacy for General Fund operations for the remainder of the fiscal year. There are fewer adjusting entries recommended for expenditure budgets in this analysis than recommended for the City'S General Fund revenues. The only significant expenditure amendment needed is to properly reflect higher pension contributions to the CaIPERS pension system (pooled Safety Plan) for the current fiscal year. Although the higher contributions will serve to more quickly fund the plan's previously accrued liabilities, the additional amount needs to be provided in the General Fund's operating budget. (Unlike Enterprise Funds, the General Fund reports only current assets and current liabilities, so pension contributions are treated as expenditures of the fund in the period in which they are pald. GASB 68, implemented in FY 2014- 15, requires that governmental pension liabilities be accrued and reported on the City-Wide Financial statements, but not within the funds themselves.) This adiustment represents a 26.2 percent increase in this line item for the Police Department. Other expenditure adjustments were fairly minimal in amount, or offset by operational savings elsewhere in the department. Proposed revisions to General Fund Expenditure Budgets are explained in detail in Attachment B. Again, additional budgetary savings are a certainty, because the expenditure budgets reflect the limit of spending levels for each department. Departments are only able to expend or commit funds up to this legal level of budgetary control. Because these budgetary controls are established within each category of departmental expenditures, budgetary savings tend to average 2-4 percent of the annual expenditure budget. ln recent years, the city experienced higher{han-average expenditure variances due to savings in the category of personnel costs 10 0.7% 20 1 5-l 6 Mid-Ye ar Report March 16, 2016 from elevated levels of position vacancies. However, vacancy levels appear to have returned to a normal rate. For this reason, it is anticipated that the City will experience a budgetary savings in the range of $1 - $2 million in the cunent fiscal year. ln addition to the adjustments to operating expenditures noted above, a transfer out of the General Fund to the City's Renewal and Replacement Reserve in the Capital Projects Fund reflects the $2.5 million reduction of the General Fund Catastrophic reserve approved by the Council in October, discussed below. General Fund Ooeratino Summarv A summary of the impacts to the General Fund of the adjustments made as a result of this mid- year analysis is shown in the schedule below: CITY OF EURLINGAME, CA GENERAI FUI{D OPERATING SUMMARY FY2014-15 Adual FY20l5-15 Current Eudget FY2015-16 Midyear P.oiection FY2015-15 Mkiyear Amendment TotalRevenue s 51,909,081 s 50,8s8,s0o 5 6s,487,600 s 4,529.100 Expenditures Depaatmental Expenditutes Transfe6ln (Out) Total Expendhures (44,405,084) lLo,927,a74l lL49iA;1221 ,.49,185,722) (10,692,973) (351,000) (2s0,000)(LO,442,9731 (ss,332,9s8) (s9,877,69s) (5O,478,69s) (601.000) 6,s76,723 0 980,805 0 5,008,90s (2,s00,000) 4,O28,700 (2.s00,000) Chante in GeneralFund Balance Adjusted by the recommended amendments in this report, the General Fund shows a projected surplus (positive net operating revenues) for fiscal yeat 2015-16 of approximately $5 million, which is $4 million higher than initially forecast, due largely to higher revenues than anticipated in the fiscal year's original budget, as summarized in this report. ln January 20'15, the City Council approved a General Fund Reserve Policy that recognized the need for adequate reserves to guard against future economic downturns, as well as to provide a hedge for catastrophic events. ln addition, in recognition of Burlingame's significant unfunded capital planning/facility needs and the continued impact of these needs on the City's financial flexibility, the Council also approved the establishment of a Renewal and Replacement Reserve within the Capital lmprovement Projects (ClP) Fund. The purpose of the Renewal and Replacement Reserve was to prevent further accumulation of unfunded liabilities that aging facilities represent. lt was initially funded with a General Fund transfer of $3 million, a reflection of the fund's operating surplus in fiscal year 2013-14. ln October, the General Fund Reserve policy was updated based on a refined analysis of the optimal reserve level for catastrophic events. The analysis supported a decrease in the Catastrophic Reserve to $2 million, with a more robust strategy to cover the potential of damages in excess of this new reserve target. 11 Net OperdtinS Reven ue Transfer to CIP Renewal & Replacement Rele e S 6,s?6,123 $ gto,Eos S 2,508,905 S 1,528,100 2015-16 Mid-Year Repoft March 16, 2016 Alternative strategies, such as catastrophic insurance, are being investigated by ABAG PLAN (Associated Bay Area Governments Pooled Liability Assurance Network Corporation) of which the City is a member. The $2.5 million reduction was to be offset with an increase in the Renewal and Replacement Reserve. The transaction is included in this mid-year report as a transfer out to the City's Capital Projects Fund. Note that, unlike other amounts reflected in the fund balance of the Capital Projects Fund, Renewal and Replacement Reserve funding will not be appropriated to a specific project. Rather, it will accumulate for capital projects to be initiated when timing is optimal and sufficient other funding is identified. General Fund Balance Once all the mid-year adjustments are posted, the General Fund shows a projected total fund balance of $31.7 million at the end of the 20'15-16 fiscal year. CITY OF BURLIN6AME, CA CHANGES TO GENERAL FUND BALANCE FY 2015-15 Midyear Proiection FY 201lL15 Beginnlng Fund Balance Pmiected Revenues & Expenditurcs Projected betterthan budgeted revenue performance Projected departmental expenditures subtotal, Revenues Net of Expenditures General Fund Long-Term Debt Transfe6 ln (out) of General Fund s 29,237,630 65,487,600 49,7A5,722 15,701,878 Due to a budgetary surplus in fiscal year 2014-15, the beginning General Fund balance was over $5.1 million higher than anticipated in the prior year budget, creating a relatively large unassigned fund balance. ln the cunent fiscal year, the projected fund balance is also projected to grow. The $4.6 million anticipated increase in revenues now p@ected for FY 2015-16 is offset with slight expenditure adjustments and the $2.5 million funding of the Renewal and Replacement Reserve (from reduction in the General Fund's Catastrophic Reserve). CITY OF BURLINGAME, CA GENERAI. FUND BALANCE ASSIGNMEi{TS FY2014-15 A.tual FY2015-16 Midyear Proiedion Up (Oown)S Up (oown) % Economic Stabllity Resewe Catad,ophic Reserve GeneralPlan Resewe Contintency Reserve Subtotal, AssiSned Fund Balance s 13,30q0o0 4,s00,000 0 500,000 s 1t700,000 2,000,000 0 s00,000 2,400,000 (2,s00,000) 0 0 18.0% -55-5% o.o% o.o% Add: Una5signed Fund Balance 18,300,000 10,465,052 18,200,000 13,546,535 (100,000) 3,081383 -0.5% 29.4% Total, Ending Fund Balance I2a,76s,0s2 S 31,746,53s S 2,981,483 to.4% 12 16,4A4,?37]. 16,788,2421 Proiected General Fund Balance, net of trdnsfers S3f,7/f6,535 201 5-1 6 Mid-Year Report March 16, 2016 Once funded as approved ln the General Fund Reserve Policy, the City's reserves ($'18.2 million) comprise the largest portion of the General Fund's ending balance. Approximately $13.5 million remain as "unassigned fund balance", available for future appropriation. Similar to the use of unassigned fund balances from the prior fiscal year and in recognition of the City's large backlog of facility needs, staff recommends that the Renewal and Replacement Reserve be funded by an additional $5 million. The Renewal and Replacement Reserve was established with the intent of providing funding for the replacement of City assets. Governmental funds (as opposed to Enterprise Funds) do not incur annual charges for depreciation of assets; therefore these costs are recognized only when the asset needs to be replaced. The City's list of capital/facilities needs will continue to grow; the Renewal and Replacement Reserve is a mechanism to accumulate funds to offset these needs. As such, the funds in this reserve are not appropriated to a specif1c pqect, but would be available for capital projects to be initiated when timing is optimal and sufficient other funding is identified. Staff is developing a framework for a reserve policy specific to this Capital Project Fund reserve for City Council consideration and discussion early in the 2016-17 fiscal year. CIW OF BURLINGAME, CA CHANGES TO RENEWAL AND REPTACEMENT RESERVE 5 3,ooo,0oo 3,000,000 2.500.000 s 8,s00,000 s.000.000 5 13,s00,000 13 ln addition to this funding of the Renewal and Replacement Reserve, staff recommends that the City Council consider earmarking funds from available balances toward addressing a large backlog of work related to sidewalk and ADA-related improvements. Though the City is attempting to address the sidewalk and ADA needs on a regular basis as part of the 50/50 program, a major effort is needed to prevent further deterioration of the City's sidewalks. Failure to inspect and repair trip hazards increases the City's exposure to sidewalk liability claims, which can significantly burden the General Fund operating budget. Even if no injuries occur, when people in wheelchairs or others with mobilily impairments are prevented from accessing public pathways, the City could be found in violation of the Americans with Disabilities Act. This effort is estimated to cost approximately $10 to $'15 million. As not all improvements can be completed within one fiscal year, this poect will be added to the City's already aggressive five-year Capital lmprovement Program (ClP) beginning in FY 2016-1 7. General Fund Reserve Poticy - As of June 30, 2016, the projected fund balance of $31.7 million represents nearly 64 percent of General Fund operating expenditures of $49.8 million. The City's General Fund Reserve Policy and resulting reserve target was based on an assessment of the City's revenue volatility and infrastructure risks, as well as the possibility of extreme events, in establishing a reserve target specifically for the City of Burlingame. As such, the Council's reserve management strategies reflect best practices in public finance. The $18.2 million in Beginning Balance 7 I ll 15 Budgeted Transfer from General Fund in FY2015-16 Decrease in Catastrophic Reserve Fund (mid-year) Proiected Ending Bala nce 5/30/16 Recommended add'l transfer from General Fund Recommended Ending Balance 6/30/15 201 5-1 6 M id-Ye ar Re port March 16, 2016 reserves represents an amount equal to 31 percent of projected General Fund revenues (excluding one-time revenues) for the year; the reserve policy calls for an Emnomic Stability Reserve of 24 percent of budgeted revenues, a Catastrophic Reserve of $2 million, and a $500,000 Contingency Reserve. Other Funds Other Funds - All City funds were reviewed for this mid-year analysis. The recommended revenue adjustment for most funds is the result of anticipated earnings allocations from the City's investment portfolio, explained in the General Fund Revenues section of lhis report (Appendix A). The recommended adjustments are shown below: lnterest lncome Ama'r,|dmerts FY 2015-16 2015-16 Fund aot4-ts Actual Current Bud8et Midyea, Proiection Midyear Amendment GenealFund Gas Tax Fund S€wer Fund Solid wane Fund Parkng Enterp.ise Frrnd Brrilding Enterprise Fund worker's Comp€Nation Fund lsF Equipment Services Furd ISF I nformation Services Fund lsF GerEralLiability lsF storm orainaSe Fund Debt Service f'rrd Tot l 2fi)n 5 17,268 11,271 119,103 106,fi1 24,228 24,721 33,151 41,556 40,195 s,289 17,4U 67,424 6,659 400,0m 5 30,(m 323,000 $ 20,0q) 13.m0 135,0@ 120,000 28,m 33,000 38.000 41trfo 45,0m 6,0m 20,0@ 78,000 8,000 07,mo) (10,m0) 13,M (5s,m0) (30,m0) (12,m0) (17,m0) (12,m0) 4Zm0 3,ofl) 2,0m 5,(m (22,000) (7,m0) 200,000 150,(m 40,0m 50,0m so,0m 42,m 4,0m 1S,0@ 1m,@o $,m s 792,969 s 1.104,mO s 922.mO s 1182,0001 Capitat Proiects Fund - Several adjustments were identified for the City's Capital Projects Fund, reflecting projects closed with unused budgets. Where appropriate, unused funds will be returned to the source fund. Within the Storm Drain and Enterprise Funds, budgetary savings will be directed to similar projects, reducing the need for new funding in the subsequent fiscal year. For example, the Laguna Drainage lmprovements ($1.8 million) and Neighborhood storm Drain lmprovements No. 7 ($530,000) projects have been completed, providing an estimated $1 1 5,OOO in budgetary savings for other storm drainage improvements. The 20"14 Sidewalk Maintenance Program can be closed, and the 20'15 Street Resurfacing Program is also substantially complete. The Burlingame Avenue Streetscape, which utilized a variety of funding sources, can also be closed. The Police Department has fully transitioned to the Sun Ridge Computer-Aided Dispatch (CAD) and Records Management system. The system is now in use by all of the agencies in san Mateo County, allowing law enforcement agencies to seamlessly share information. Additionally, this system has made it possible for the Burlingame and San Bruno Police Departments to operate a virtual 911 Dispatch Center, so that both agencies can assist one another on a daily basis as needed. The cities also have the ability to evacuate to the other center in the event of 14 201 5-1 6 Mid-Year Report March 16, 2016 an emergency without any interruption of service to citizens. The project was completed at a cost of $393,000, within 2 percent of the project budget. Also in this fiscal year a budget of $70,000 was established for a Backup Recovery Server for the City's information systems. System backups had begun to slow with the increase in data storage; the replacement server provides new technologies that speed the process of data backup exponentially. The equipment was procured at a cost of $43,000. The $3.5 million Library Millennium Project can now be closed; the project began in August 2014 and officially ended in August 2015, one year to the date and on budget. The Cafe portion of the project is now complete, and the community can conveniently enjoy a snack and beverage in the Library. The Library's Security Camera project is also complete, with an array of server- connected digital cameras within the library, as well as the upper and lower parking decks. The Library system is now linked to the Police system to deliver real-time information should an emergency arise. After a joint meeting with the Burlingame School District's Board of Trustees in January to discuss traffic safety and pedestrian access in the vicinity of the new Hoover Elementary School, the City Council approved $150,000 for traffic and safety improvements at three locations: Easton Circle, Hillside Circle at Summit Drive, and Hillside Drive between Alvarado Drive and Hillside Circle. The improvements include crosswalks, ADA ramps, street signage, bulb-outs and stop signs. ln addition, the Council expressed interest in determining the feasibility of constructing sidewalks from Hoover School along Eaton Drive to Easton Circle and Summit Drive to Hillside Circle. The scope of work will include a topographic survey and identifying right-of-way constrainls. The feasibility study will also provide alternative solutions and cost estimates to add sidewalk at these locations and meet roadway design standards, including potential right-of-way takes necessary to meet objectives. The cost of the study is estimated to be $100,000. Therefore, an additional $250,000 budget, funded by a transfer out of the General Fund, is recommended for these two capital projects for the cunent fiscal year. A preliminary study conducted by staff indicates that approximately $3.2M would be needed to address the pedestrian safety improvements near Hoover School. The feasibility study will provide more information regarding the project scope and costs; funding considerations will be discussed in coniunction with the FY 2016-17 budget process. Measure A Fund - This fund accounts for the City's share of the special half-cent sales tax to fund transportation-related projects and programs. Based on improved sales tax revenues county-wide, the FY2015-16 budget was set at a fairly aggressive level of $800,000. However, revenues appear to be slightly ahead of target for lhe year, as shown below. $600,000 of this year's revenues is appropriated for transportation related capital programs Gas Tax (HUTA) - This fund is used to account for the revenue received from the State of Califomia derived from gasoline taxes. These funds may only be used for street purposes as specified in the State Streets and Highways Code. The projection of Highway Users Tax (HUTA) revenues is complex, with differing allocations derived from various sections of the Code, and differences in the allocation of gasoline tax revenues from diesel and fuel use tax revenues. 15 201 5-1 6 Mid-Year Report Calculations are further complicated by the State's gasoline sales tax/excise tax swap introduced in 2010, and formulas to ensure that cities and counties are "made whole" from impacts of the swap. However, new projections for these revenues were generated using a model reflecting the local allocation formulas, latest population estimates and state Department of Finance (DOF) estimates of statewide motor vehicle fuel tax revenues provided in the Governor's Proposed 2016-17 budget released on January'15. These projections indicate that Burlingame will receive approximately $673,000 in HUTA revenues in the current fiscal year, a $38,000 increase from the adopted budget. Note that the fiscal yeat 2O14-15 city and county HUTA allocations included a one{ime HUTA loan repayment in addition to the normal allocations. The repayment, falling gas prices and consumption, and a "true up" of prior year over-alloc€ltions under the fuel tax swap system has resulted in a significant decline in revenue from this tax source. These factors were considered when setting the reduced budget in the Gas Tax Fund for the 2015-16 fiscal year. Water conservation efforts have served to mitigate the impact of the SFPUC's wholesale water rate (the rate the City is charged on water purchases) increase of 28.0 percent as of the beginning of the current fiscal year. This increase was anticipated when the budget for water purchases ($7.3 million) was established for the current fiscal year. [,esc FY2015-15 8ud 20L2-11 Actuals 2013-14 Actualr 201+15 Actuals 2015-16 Adopted Measure A Gas Tax (HUTA} Vehi.le Code Fines ffraffic safew) Tot l 7t7,714 5 901,322 asA24 s 53000 824,000 s 673,0@ s93,@ s 52,m0 24,000 38,000 703,609 s 702,336 789,049 S 859,096 18ss1,704,460$1,73 16 March 16, 2016 Mkiyear P.oie.tion Mklyea. Amendinent 800,0m s 535,0m Water & Sewer Funds ln recent years the Bay Area has been heavily impacted by the severe drought. Declining water levels at the Hetch Hetchy Reservoir and a lack of rain and snoMall has prompted aggressive campaigns promoting water conservation at both the local and state levels. In response to Governor Brown's Executive Order mandating water use restrictions, the City's residents and business owners have exceled in saving water since June 2015, reducing consumption by 30% to date as compared to calendar year 2013. This far surpasses the State's mandate for Burlingame of a 160/o reduction in consumption. While consumption patterns are reaching low levels due to the concerted and deliberate efforts to conserve water, it is difficult to predict whether these pattems will continue for the remainder of this fiscal year. 20 1 5-1 6 M id-Ye ar Re pora a5o0 uJ00 3 March 16, 2016 Historical water Billin$ By FiscalYear Last Three Years - 2013-L - 114.15 2015-16 -20r5.16 9t@ 65@ ,'i, A{,un s."t4hd o.toar ll@!nb6 odabt J-Ev F6rwt M-.h ra.il Mn ,4 The City will continue to closely monitor consumption patterns in the coming months, and the City Council will be informed if actual results deviate significantly from the mid-year forecast. ln looking forward to the FY 2016-,7 budget, recent reports from the SFPUC indicate the projected cost of wholesale water is expected to increase by 8.0 percent. Further information and updates will be provided to the Council as the City's future waler rates are considered. Note that a direct reimbursement to the Water and Sewer Funds for utility services provided to City facilities and parks based on consumption is assumed in the FY 2015-16 budget. These costs are now reflected as departmental costs, rather than included in the various transfers between funds. Solid Waste and Landfill Funds - Although significant increases in Solid Waste rates were necessary in 201 1 and 2012 lo pay off a deficit position from the 2001-2010 contract for solid waste services, revenues in subsequent years have been adequate to generate surpluses within the Solid Waste Fund account. The higher rates ended the need for General Fund transfers to support activities of the Solid Waste Fund. Afler the rate increases, revenues became sufficient to pay the costs of all solid waste contracts and City-provided services, and provided surplus funding of a Solid Waste Rate Stabilization Reserve. For calendar year 2016, estimated revenues from collections for Burlingame ($10.6 million) are just adequate to cover the costs of the City's collection contractor (Recology) of $5.8 million; disposal & processing fees of $2.9 million; franchise fees of $710,000; funding of the City's landfill post-closure costs ($a50,000); $575,000 for costs borne by the City, including street sweeping, steam cleaning and maintenance of public receptacles, and the household hazardous waste program; and continued funding of a rate stabilization reserve. Current reserve levels ($3.7 million at June 30,2015) will allow the City to modulate future rate increases, and insure that it is in good fiscal position when the current franchise agreement with Recology terminates at the/end of 2O2O. As noted, rates include a 5 percent surcharge for landfill 17 201 5-1 6 Mid-Year Repoi March 16, 2016 poslclosure costs. The surcharge provides revenues to the Landfill fund to cover maintenance and monitoring functions at the landfill site, and will serve to reduce the $2.5 million fund deficit that results from the liability recorded for future post-closure costs. No budget amendment is required for either of these enterprise funds for the current fiscal year, and very little change is anticipated in the budget for these activities in fiscal year 2016-17. Description 2012-tl Actuals 20L3-t4 Actuals 20L4-L5 Actuals 2015-15 Adopted Budget Construction Permit Fee Building Plan Check Fees Microfilm/Other Fees Total 5 959,354 s 578,756 33,509 1,149,038 597,374 42,939 S 1,001,899 S 795,968 37,698 1,180,000 1,010,000 40,000 5 t,571,529 s 1,783,3s1 5 1,83s,s64 S 2,23o,ooo Parking Enterprise Fund The Parking Enterprise Fund provides for the maintenance and upkeep of the City's parking lots and metering equipment, including maintenance and utility service for the new electric vehicle charging stations in Parking Lot V. Excess revenues that accumulate in the fund are intended to provide funding for future parking facilities and associated revenue mechanisms. The fund's expenditure budget appears to be adequate for the current fiscal year. Note that prior to the cunent fiscal year, the cost of the Cily's parking enforcement activities was also borne by this fund. Since the citation revenues generated from these activities are credited to the General Fund, these costs are now budgeted in and charged to the General Fund, in the Police Department's budget. The Parking Enterprise Fund budget was further reduced by a combined $35,000 for armored car services, utilities costs and other expenses that had been slightly over-budgeted in prior years. tnternal Service Funds - lnternal service funds are used to account for internal costs that are borne by all departments/programs of the City. Allocation of these centrally incurred costs is performed based on estimated usage or other metrics. Changes to the budget of an internal service fund do not necessarily require an offsetting change in the fund's revenues (charges to the participating departments), as each fund has a separate fund balance that can vary due to need. However, these funds are carefully monitored to ensure that departments are appropriately and adequately charged. 18 EUILDING FUND - Revenues Buitding Enterprise Fund - Revenues in the Building Enterprise Fund (largely construction permits and building plan check fees) for the last fiscal year were only slightly higher than in the previous fiscal year, maintaining the level of activity from the 2013-14 fiscal year, which marked a significant increase in the volume and value of permits pulled. However, revenues were less than projected in the 2014-15 fiscat year budget. ln the cunent fiscal year, construction fee permits are running slightly ahead of the prior year, and building plan check fees are about 15 percent behind. Because these revenues are difficult to project, and can swing significantly depending on the timing of large development projects, no adjustments are recommended at this time. lf a smaller volume of activity results in less{han budgeted plan check fees, a lower expenditure level for plan check services will be needed than cunently provided for in the budget. 201 5-16 Mid-Year Report March 16, 2016 Workers' Compensation (WC) Fund - The City's Risk Management Fund was split into two (lnternal Service) funds prior to the development of the FY 2014-15 budget in order to account separately for the City's Workers' Compensation and General Liability programs. Charges to the departments are calibrated so as to cover the costs of each type of insurance and the payment of claims, though demands of these funds have varied considerably in recent fiscal years. After incurring a significant drop in net position in the WC Fund in fiscal year 2013-14, charges to the various departments (revenues to the fund) were adjusted to more adequately provide for workers comp claims and activities. Results for the WC program in FY 2014-15 showed that the 23.8 percent increase in revenues, combined with a 60.3 percent drop in expenses, greatly stabilized the fund's fiscal position. The reduction in the fund's expenses was the anticipated result of an overhaul of the claims handling and adjustmenVreserves processes, which accompanied a change in the program's third party administrator. Note that expenses to the fund, including a provision for "incurred but not reported" claims, are based on an actuarial report of outstanding liabilities of the program, and are subject to some uncertainty. The City's reserves for the fund are currently funded at a less than 70 percent confidence level; as the health of the fund improves, more conservative funding of these liabilities can be reported. Administrationllnformation Seruice lnternal Seryice Fund -fhe budget for this fund includes not only information services, but also the costs of maintenance for centralized printing and mailing equipment. Certain City-wide studies, such as the cosl allocation study, were included in this fund in previous years, but such consultant contracts were moved to the Finance Department within the General Fund budget. Beginning with fiscal year 2015-16, only the costs of lnformation Technology (largely the contract with Redwood City for lT services), and the maintenance of printing and mailing equipment and services are accounted for in this fund. After a prolonged period of service issues, the two copier/printing machines in City Hall (both upstairs and downstairs), which had been procured with a five-year leasing agreement, were replaced in October. Management determined that the outright purchase ($39,000) of the new machines was much more cost-effective for the City. As no further capital purchases are anticipated by the fund in this fiscal year, a $10,000 increase in the fund's capital equipment budget is sufficient to cover the costs of the new machines. An equal decrease in the fund's equipment maintenance budget is proposed to offset this additional appropriation. Equipment Servrces Fund - This fund is used to account for the costs of operation, maintenance, and replacement of automotive equipment used by the various departments. The Fy 201 5-16 budget supplied an increase in contractual services to maintain the Global Positioning System (GPS) that was installed in the City's fleet in the prior fiscal year. The cost for the GPS fleet lracking is $34,585 annually. The system is operating as planned: benefits include the reduction of fuel costs, liability and risk, and increases in efficlency and customer service quality. Software features allow powerful reporting and include a customizable dashboard interface to track all vehicles in real time. Software is accessible from any mobile device. 19 201 5-1 6 M id-Ye ar Re port Unfunded Needs Since that time, City staff has explored various options/partnerships with private developers to build one or more parking garages and a City Hall at little or no cost to the City. Options to partner with developers on construction of a new City Hall were also considered. Separately, the City has worked with its financial consultant to help determine how to fund the projects (such as the Community Center) that may require some type of voter approval of a funding mechanism. At this time, no decisions have been made about any of the potential public-private partnerships or tax mechanisms. ln addition to the Hoover School Area Traffic and Safety lmprovements identified in January, the City Council and staff have identified other capital needs that will compete for General Fund resources and challenge the organization's capacity to successfully undertake. For example, the Broadway grade separation project is in the Project Study Report (PSR) phase at this time. The preliminary project cost is estimated at approximately $240 million. Upon completion of the PSR phase, staff will explore opportunities to obtain external funding to advance the project into the design and environmental phase. Staff believes that as the project moves towards the construction phase, the City will be required to provide a local match, estimated to be in the range of $15-$20 million, towards the construction costs. Also, a large number of City buildings, in addition to the facilities previously identified, have served their original intended design life, and are in need of major improvements. Though the City regularly invests in building maintenance, major building components are overdue for replacement. To the extent possible, necessary improvements are included in the five-year CIP program, but this approach has not proved to be sufficient in averting further unfunded needs. Staff is in the process of preparing a master plan to identify and prioritize building improvements of all facilities to undertake projects as funding becomes available. 20 March 16, 2016 ln November 20'13, staff presented the City Council with a list of unfunded needs as well as broad cost estimates for the various projects. Afler extensive public outreach, staff asked the City Council to prioritize the poects so that funding plans could be developed. The City Council ranked a new downtown parking garage as the highest priority, followed by the Community Center, and City Hall. Although funds are being set aside in the City's Renewal and Replacement Reserve, the amounts of funding seem to diminish when compared with the growing set of unfunded needs. ln addition, the reserve is being funded by annual surpluses and one{ime revenues, and as such will be the first General Fund resources that will be reduced or eliminated when the economy inevitably retracts. Staff plans to draft a Renewal and Replacement Reserve Policy for City Council discussion and direction in the fall. However, these unfunded needs should be kept in mind when reviewing the General Fund Five-Year Forecast. 20 1 5-1 6 M icl-Ye a r Re port March 16, 2016 The five-year forecast attached to this report as Attachment C was developed using the FY 2015-16 budget, adjusted for the recommended adjustments in this report, as a starting point for estimating revenues and expenses of future operating budgets. The five-year forecast was prepared with careful consideration to each revenue and expenditure category. These analyses roll up to the summary forecast shown in Atlachment C. General Fund revenues are monitored closely, and projections are based upon a rolling forecast model that combines actual results with smoothed, multi-year historical data. When appropriate, compound annual growth rates (CAGR) are utilized to smooth cumulative year-over-year growth, as though growth has occurred steadily over the specified period of time. Adjustments are also made for known and/or assumed financial factors such as economic and legislative changes at the national, state, and local level. Forecast assumptions may also utilize information from third party experts, published industry indices, and/or data collected from City departments. This procedure for analysis allows a different CAGR or groMh assumption to be applied for every account within a revenue or expenditure category. For example, if solid waste franchise fees are anticipated to grow faster than electric franchise fees, these different growth rates can be part of the assumptions. However, the casual reader will not be able to determine these forecast assumptions by simply calculating a growth ratio. The rest of this report attempts to articulate major deviations from a flat growth assumption within any category; the assumptions are summarized in the tables below: F oreca sted Reven u e As s u m Pti on s Growth Factor Explanatory Comments Property Tax ERAF Rebate 5.97% - 20L6-L7 4% thereafter Actual assessment roll growth per the County Assessor based on January 1 lien date and continuing trend of low property turnover. Growth for 2016-17 is per the county Role Tracker year-to-date. The housing market may cool in the next few years due to rising interest rates, but some Bay Area insulation is expected due to high demand. Adjustments made for Educational Revenue Augmentation Fund (ERAF) rebate, decreaslng over the next five years due to growing demands on ERAF funds. The City will continue to treat as one-time revenue. 21 General Fund Five-Year Financial Forecast To evaluate the ongoing impact of each of the updated General Fund projections described in the City's five-year forecast, it is important to consider which adjustments reflect one-lime events, and which represent a fundamental change in the City's revenue or expenditure structure. One{ime revenues cannot be relied upon to augment ongoing services, just as non-reoccurring costs will not drain the General Fund on a continuing basis. Therefore, no sale of property or other General Fund assets are assumed in the five-year forecast. Revenue Description Varies - expected to decline 2015-16 Mid-Year Repod Revenue Description Growth Factor Explanatory Comments Sales Tax 2.9% - 2076-17 3.A% - 2017 -\8 3% thereafter Based upon recent Q3 2015 sales tax data. End of the triple-flip in FY 2015-16 caused a one-time increase, decreasing the FY16-17 forecast when compared to current year. lndications of a shift of consumer spending on services (rather than taxable goods) and statewide concerns regarding diminishing sales tax base could limit growth. Transient Occupancy Tax -2.7Yo - 3.OYo Based upon assumption that average daily room rates will be constrained by price elasticity. lncludes an assumption for some diversion of revenue as a result of new SFo hotel in fiscal year FY2018-19. Other Taxes - Franchise Tax L.O%-3.0% Based upon expected gross revenue changes for PG&E, garbage, and cable w. Other Taxes - Business Licenses r.o%-3% Based upon expected growth in long-term parking as a result of record highs in passenger tralfic at SFO. Minimal growth is expected in general business license revenue because it is based upon volume of businesses rather than gross receipts. other Taxes - state HoPTR Flat Limited to growth in the number of homeowner occupied parcels. Other Taxes - Transfer Tax s400k - 2015-17 2% thereafter Based upon historical patterns and consistently low inventories of properties for sale. Licenses & Permits Fines, Forfeitures & Penalties 0.5% - Licenses 2Y6 - Fines Based primarily on no/slight annual adjustments to fees, and a very small increase in volume. Not included here is an assumption for added parking lots or garages over the next five ye ars due to unknown implementation date. Charges lor Services to% - 20L6-r7 3% thereafter completion of cost Allocation and User Fee Study, increased fee revenues anticipated in FY 2Of6-L7. Thereafter, growth based primarily on consumer price index adjustments to fees. Not included here is an assumption for increased programming at new Community Center due to unknown lmplementation date. Use of Money & Property 2.s% The assumption is based upon current long- term lease information, which permits adjustments based upon consumer price indices, as well as a scheduled increase to the monthly rent for a T-Moblle tower in WashinBton Park. )a March 16, 2016 2O1 5-1 6 M itt-Ye at Re po rt Forecasted Ex penditure Assumption s March 16, 2016 Revenue Description Growth Factor Explanatory Comments Other Revenue No growth No growth projected due to one-time revenue. The forecast assumes that mandated cost recoveries from past years will continue to decrease as the State makes progress in paying these liabilities. Growth assumed in Measure M revenues from vehicle registrations volume. lnterest lncome Varies - 1.0% - LO.O% Based upon expected cash balances and increases in Federal Funds rate per Federal Reserve policy analysis (December 2015). Expenditure Description Explanatory Comments lncludes an annual groMh rate of 8% for January l changes in health care rates. Expected PERS contribution rate increases (10.6% average annually for Safety and 5.4% for Misc. employees) coupled with forecast increases in salaries & wages. Also included are employee contributions to health care and PERS in accordance with current MOUs. Operating Costs Based upon cost of living adjustments for most non-personnel costs and expected changes in utility rates. A 3% compounded annual growth rate is assumed for most operating costs. A 6% escalation factor for service from Central County Fire is also assumed. Operating Costs (cont.) Operating costs include a payroll surcharge assessed on full-time employees to fund previously incurred costs associated with retiree medical benefits for former employees (implemented in fiscal year 201.4-15). 23 State Subventions o.5/o Salaries & Wages lncludes effect of current collective bargaining aBreements, including recently approved agreements with labor groups and increases wages for part-time employees effective January 1. (Note: Budget not adjusted for these increases in 2015-16) Assumes an annual growth in salaries of 1-3% for out years, as well as normal merit step increases. Benefits 201 5-1 6 Mid-Year Report March 16, 2016 ln the five-year forecast, property tax revenues are assumed to grow at a rate higher than inflation, but not as quickly as in recent years. Although growth in Burlingame's assessed value in fiscal year 201+15 was 6.83 percent, and cunent year property tax revenue was based on a roll 6.8 percent higher, growth in the roll for fiscal yeat 2016-17 indicates that an increase of approximately 6 percent in property taxes can be anticipated. This rate includes an inflationary factor of slightly over 1 percent as reported by the State Board of Equalization for December 2015. The inflationary factor is capped at 2 percenl annual groMh. The rest of the growth is from re-assessments, usually the result of properties changing ownership. As the economy continues to strengthen, assessed values should also increase steadily, and the inflationary factor will most likely be back to 2 percent in future years. As a result, the assumed growth factor is 4.0% for secured property taxes in fiscal years 2017-18 through 2020-2'1. However, property tax revenues as a whole exhibit a much slower rate of growth in the five-year forecast due to the cessation of ERAF refunds. Long a part of the City's property tax revenue stream, the refunding of amounts remaining in the County's Educational Revenue Augmentation Fund (ERAF) to the subsidizing local governments is projected to come to an end. Note that the potential revenue impact of other future (specific) development, including any major development currently in initial stages - but without an approved fiscal impact report - is NOT included in the long-term forecast. The City's Transient Occupancy Tax (TOT) revenue has grown in recent years to be the City's largest General Fund revenue source. A surge in both occupancy and hotel room rates has resulted in a 38 percent increase in the City's TOT revenues in the past three years. The rate was last increased five years ago from 10 to 12 percent (effective January I, 2010), and that rate is assumed to remain unchanged in future years. Yet the revenues generated from TOT are very volatile. As noted in the risk-based analysis of the City's General Fund reserve needs, receipts are directly tied to changes in average daily room rates (ADR) of the City's 3,742 hotel rooms. As occupancy rates are already very high, and room rates show some signs of leveling off, it is unreasonable to assume these revenues will continue to grow as they have in the past few years. A groMh rate of 3.0 percent is applied to the City's base TOT revenue for most years of the forecast. An adjustment is included in fiscal year 2018-19 to reflect the completion of a 400-room hotel at SFO. Although the timing and impact of Expenditure Description Explanatory Comments lnternal Services Based upon a 3% blended escalation factor. Capital Outlay lncludes a base of S20OK based upon historical use and 3% groMh rate. Transfers ln (Out) Assumes reimbursements for debt service, increasing General Fund investments in capital Projects (with a floor of 2 of the L2YofOT 6x revenue), and support of city shuttle programs. Debt Service Actual debt service for all current outstanding bond issues, including the payoff of the Master Equipment Lease Purchase by June 30, 2018. Assumes no refinancing of current debt and no new general obligation debt issuances. 24 201 5-1 6 Mid-Yeat Report March 16, 2016 the new hotel on area ADRS and occupancy rates is far from certain, staff has prudently calculated that there will be a negative impact on TOT revenues. The City's sales tax base has continued to grow with the economic recovery of past years, and the forecast for the upcoming fiscal year calls for a growth rale of 3.5 percent. However, the State's sales tax "Triple Flip" created a one-time bump-up of this revenue source for Burlingame in fiscal year 2015- 16 of nearly $1 .2 million, which masks this positive growth forecast. The forecast calls for continued growth in FY 2017-18. But due to consumer trends that indicate a decrease in the purchase of goods and materials in favor of non-taxable transactions (i.e., services), a more conservative groMh rate of 3.0 percent is appropriate for the fiscal years beyond 2017-18. lncome from the City's investments has increased very modestly with the growing economy. Because the yields on short-term, risk averse investments have been historically low for several years, changes will be moderate in the next couple of years. Any increase to a very low yield will result in significant growth factors. For example, if a 1 percent investment yield grows moderately to 1.5 percent in the fifth year of the forecast, this represents a 50 percent growth over the period. Note that this revenue source has been greatly diminished in recent years and is no longer a significant contribution to General Fund revenues. However, as interest rates rise, staff will continue to optimize the portfolio's performance. The limited revenues received in the categories of Licenses and Fines are assumed to grow only modestly for purposes of the five-year forecast. Charges for Services are forecast to grow at a rate of 3 percent annually after a significant increase in FY 2016-17. lncreases in fees are anticipated due to the completion of the City's Cost Allocation and User Fee studies, which will inform fees for the coming fiscal year. These increases will be explained in detail with the presentation of the Master Fee Schedule in April. Salaries and wages have been broadly p@ected at levels that assume all existing labor agreements are adhered to until expiration. The City's most recent labor contracts, while reflecting concem over increasing employee benefit costs, also acknowledge the improved economy and the higher cost of living in the Bay Area. The contracts provide a balance in the four major cost areas of employee compensation: salary, health premium contributions, pension obligations and retiree medical, though the cost to the City continues to grow in all these areas. The long{erm forecast reflects groMh in salaries and wages at a level of 1-3 percent once these contracts expire. Rates charged by the Califomia Public Employees Retirement System (CaIPERS) have risen in the past few years due to the impact on investment losses in fiscal year 2008-09. ln addition, although steps toward pension reform were implemented as of January 1,2013, CaIPERS has also implemented changes to the actuarial economic assumptions that will further burden employer rates. Specifically, CaIPERS has implemented an investment program intended to reduce the risk of investment losses, gradually shifting CaIPERS to a less "volatile" mix of investments, narrowing up-and-down market swings but also lowering expected earnings. This, along with new longevity projections and a more aggressive funding of past liabilities, will serve to push rates higher. 25 March 16, 2016 The rates shown reflect rates provided by CaIPERS (through FY 2016-17); subsequent year rates are based on CaIPERS estimates for most cunent employees: Estimated ca IPERs Rates Fiscal Year Misc Rate Safety Rate 2015-16 2076-77 2077 -t8 2018-19 20t9-20 2020-27 2L.77% 22.83% 24.80% 26.6004 28.sO% 28.80% 20.23% + 2L.23% + 2L.20% + 2L.20i6 + 2L.2096 + 21-.20% + S 77s,s93 5 958,344 5 L,174,s39 5 r,4o2,844 s 1,543,790 S 1,8s7,68s Note that part of the increase in Safety rates is due to the inclusion of a dollar amount to pay off the UAL (unfunded accrued liability) of prior years. Since personnel costs are such a large portion of the General Fund budget, changes in employer contribution rates will have a significant impact on the fund's five-year p@ection. Another part of the personnel cost budgets is the pre-funding of retiree medical benefits (OPEB). Funded on a pay-as-you-go basis until the 2014-15 fiscal year, the cost of these benefits, largely incurred in prior years, is now being pre-funded through an (external) inevocable trust. These costs represent a surcharge of approximately 30 percent on regular salaries and benefits. The normal cosl (cost of the benefit earned by active employees for the cunent fiscal year) is included in all personnel cost projections, and should decrease over time because retiree medical benefits offered to new employees (since 2012) are greatly reduced in this area. An actuarial valuation as of June 30, 2015 is currently being prepared, and will inform the amount of the surcharge needed to continue funding these benefits for the next two fiscal years. With respect to non-personnel expenditures, it should be noted that the General Fund transfer out (expenditure) for the CIP has in past years been based on a set portion of the TOT revenues (2 of the 12 percentage point TOT rate) - approximately $4.2 million for 2015-16. As such, capital spending has been able to proceed at a rate higher than other General Fund expenditures. ln the five-year forecast, the same rate of growth in this transfer is assumed as the growth rate in the City's TOT revenues. The regular transfer amount was intended to reflect the annual cost of maintaining the City's current infrastructure in its cunent condition, and has been considered an essential part of a sustainable budget. However, due to the identification of the City's many unmet capital project needs, particularly in regards to City's facilities, staff will be recommending that the transfer amount based on TOT revenue be considered a minimum annual transfer amount. Staff will recommend the transfer for the 2016-17 fiscal year General Fund budget instead be increased based on the City's capital needs for the upcoming fiscal year, to the extent there is staff capacity in the organization to accomplish the identified projects. While annual funding of $3 million for the Renewal and Replacement Reserve in the Capital Projects Fund is also assumed in the five-year forecast, no assumptions have been made regarding the use of the Renewal and Replacement Reserve for capital spending, as these will be subject to the City Council's priorities. zo 2015-16 Mid-Year Repod 2015-16 Mid-Year Repoft March 16, 2016 Longer term financial planning is not limited to the General Fund. The City's other operating funds are also examined for unfunded liabilities and future vulnerabilities, and adjustments are made as needed. To the extent these funds are not self-sustaining; they can indicate a drag on the City's General Fund operations. To avoid such a condition, long-term plans are updated frequently, and any changes in the outlook of these funds are brought to Council's atlention through the budget, mid-year analysis, and financial reporting processes cunently in place. FISCAL IMPACT Authorization of the aftached budget amendment updates the previous allocation of City resources for the 2015-16 fiscal year, reflecting changes in economic conditions and the City's current fiscal year{o-date performance. Also attached is a resolution approving the transfer of $5 million from the General Fund to the Capital Project Fund's Renewal and Replacement Reserve. The City Council may consider revisions to the mid-year adjustment in the attached resolution, and/or additional amendments to the FY 2015-16 budget. The goal is to provide the most accurate picture of the 2015-16 fiscal year's standings in preparation for the FY 2016-17 budget and to assist decision makers in planning for the City's needs in the long{erm. Exhibits: . Mid-year Budget Amendments Resolution o Funding ofthe Renewal and Replacement Reserve Resolution Although the broad assumptions that underlie the five-year forecast are considered to be conservatively realistic, any number of risk factors could result in a less positive forecast, including ineffective monetary policy by the Federal government, a major retrenchment of consumer spending, increased unemployment, escalating inflation, or an emergency event. Conversely, improved revenues from the implementation of business development strategies in progress may provide the headwind - in the form of higher revenues - needed for smoother budgetary times in the near future. No single strategy is assumed to succeed (and included in the five-year forecast) until the result is imminent. Staff has endeavored to provide the most realistic budgetary poections possible using the most recent data available. Analysis of the General Fund and the City as a whole will continue through the development of the fiscal year 2016-'l'7 budget, and will include revisions to this five-year forecast. 27 2015-16 Mid-Year Repoft March 16, 2016 City of Burlingame 201&16 Mid-year Report Attachment A - General Fund Revenues Property tax rolls are established prior to the beginning of the fiscal year. For FY 2015-16, Burlingame's roll value (land and improvements) increased by 5.97 percent, including an inflationary factor of 1.015 percent applied to all California property assessments. As shown in the chart below, the preponderance of the City's property tax revenues (over 70 percent) comes from secured property taxes, which are established by the tax rolls and diminished only through refunds on successful appeals to the County Assessor's Office. ln FY 2014-15, actual property tax revenue receipts were wilhin lz percent of the budget (as adjusted at mid-year), representing a 7.6 percent increase in property taxes over the prior year. Revenues from secured property taxes were expected to rise approximately 6.25 percent in FY 2015-16, but since the final assessed roll for Burlingame reflects a 6.80 percent rise over the prior year, a $100,000 upward adjustment in the Secured Property Taxes budget is indicated. Other components of property tax revenues were conservatively budgeted. For example, Property Tax in Lieu of VLF is also allocated based on growth in the County's secured property tax roll, and is projected to come in $29,000 higher than initially budgeted for 201 5-"16. ln addition, adjustments in the County's ERAF (Educational Revenue Augmentation Fund) distributions were expected to negatively impact the City's excess ERAF reimbursement in comparison to prior years. Excess ERAF reserves are held by the County and distributed when all other obligations of the funds have been met. The ERAF reimbursement received early in January consisted of 45 percent of the excess ERAF amount for each of the current and prior fiscal years, plus the remaining ERAF reserve balances for fiscal year 2013. Due to growing demands on the ERAF funds, these distributions are declining. The County continues to warn that, as funding for education grows and other State commitments are satisfied through the ERAF funds, excess ERAF distributions could decline significantly, and even be eliminated. For fiscal year 2O15-16, the City's distribution was in facl approximately $100,000 lower than in the prior year. But these funds were very conservatively budgeted, and a $500,000 mid-year increase is proposed for this line item. 2013-14 Actuats 2014-15 ActualsDescription Adopted Eudget 2015-16 Midyear Projection Midyear Amendment Current Secured Property Tax Secured Supplemental Property Taxes Unsecured Property Tax Property Tax in Lieu of VLF ERAF Refund Unitary Tax Total s 10,379,063 351,832 589,129 2,503,852 1,425,203 247,468 5 7r,2L4,778 346,666 618,498 2,668,277 7,564,O72 265 091 s 11,900,000 340,000 620,000 2,a20,o@ 960,000 260,000 s 12,000,000 5 472,0@ 650,100 2,849,000 1461,300 2840@ 100,000 132,000 30,100 29,000 501,3@ 24,O@ s 1s,496,s47 516,677,381 5 169(x),(x)0 5 t7,7L6,40O S 815,400 zo Property Taxes - The San Francisco Bay Area housing sector was a sustaining factor in the local economy through the difficult period following the "dot com" bust, and fared relatively well through the declines in home prices from 2008 through 2010. ln the past four years the market has improved and stabilized. Assessed property values continue to rise, increasing 6.8 percent in each of the past two fiscal years. The local housing market is very strong, despite a persistent lack of inventory. And though credit conditions remain tight, the last few years have seen a renewed interest in commercial real estate development. 2015-16 Mid-Year Repoft March 16, 2016 The uncertain future of ERAF refunds makes this a highly unreliable revenue source, a factor that has been taken into consideration in the City's long{erm projections. Even though excess ERAF distributions have contributed significantly to General Fund revenues for quite some time, these refunds should be considered as "one-time" revenues, used to fund reserves or applied to one- time expenses. Supplemental property taxes, collected for the balance of the cunent tax year on increased assessed valuation when property changes ownership, is coming in well ahead of amounts for the same period last year. Although these revenues amounted to less than $350,000 in fiscal year 20'14-15, a $132,000 increase (to $a72,000) is proposed for this line item revenue. Unsecured property taxes (assessed on business fixtures, business personal property, boats, aircraft, etc.) are also slightly higher than in the prior fiscal year. As such, a $30,100 increase in this budget is recommended. ln addition, a higher assessment of utility-owned properties is reflected in the County Assessor's role, and should result in an additional $10,000 of Unitary Tax revenue for the City in the current fiscal year. Sales and Use Taxes - The line graph below shows the City's sales tax revenues over the past eight years, as well as a projection for the cunent fiscal year. The recession was obviously marked by a severe decline in consumer spending and associated taxable transactions. Burlingame experienced a flattening of sales tax revenues in the last quarter of fiscal year 2007 - 08, as both consumers and businesses retrenched in response to the economy. As can be seen in the chart below, sales tax revenues for the City declined 12.7 perclnt in FY 2008-09, with a further 23.68 percent decrease in FY 2009-10. With the economy recovering, sales tax revenues surged upward in FY 2010-1 1, and continued to grow at an impressive pace. ln fact, these revenues surpassed pre-recessionary levels in FY 2013-14, with nearly $10.2 million in receipts. The results for the fiscal year ended June 30, 2015 reflected an 8.9 percent increase from the prior year. Because of the time lag in the reporting and submission of sales taxes to the BOE, only one quarter's data is available from which to project the City's FY 2015-'16 revenues from this source. Although results for the first half of the cunent fiscal year indicate an annualized groMh in taxable transactions in Burlingame of approximately 12 percent, the projection for FY 2015-'16 sales tax revenues is deceivingly high. That is because December 31, 2015 marked the end of a series of revenue swapping procedures by the State (referred to as the "triple flip") which began in 2004 to secure debt service payments for the State's Emnomic Recovery Bonds. The triple flip unwind process (the closeout period is in May/June 2016) will result in receipt of "payback" amounts held by the state from previous quarters, supplying a one-time bump in sales tax revenues of nearly $1 million. FiscalYear 2Oo8-15 sal es & use Tax Revenue De*ription FY2oO8 FY2009 (in millions! FY2010 Fr2011 FY2012 Fr2013 FY20l4 FY2015 FY2016 Sales & Use Tax S 5alesTax Compensation Fund S Public safety Fund-Sales Tax 5 6.9s 5 2.s1 S 0.12 S 5.85 2.19 0.11 s s.00 s S 1.27 S S 0.11 S 6.1s S 1.89 s 0.11 S G.33 S 2.16 S 0.12 s 6.90 S 2.17 S 0.13 s 7.48 5 2.s7 5 0.14 5 8.36 S 2.s9 S o.r.s S 11.00 2.LO 0.14 Grand Total S 9.sE s 8.36 s 6.38 s 8.1s s 8.62 s 9.20510.20s11.10s13.24 Year-over-year chante 2.40% -12-70% -23,61t% 27.74% 5.71% 6,73% fi.A% 8.87% 19.31% )o The chart below shows total sales tax receipts from the Bradley Burns (local 1 %) allocations from the State Board of Equalization (SBOE), the amounts received from the State's Sales and Use Tax Compensation (SUTC) Fund, and the additional Public Safety Sales Tax. ln future years, the local sales tax allocations will be received in whole, and the State's SUTC Fund will be retired. 2015-16 Mid-Year Repotl March 16, 2016 Historical Sales & Use Tax Revenue S12 Slo s8 11.00 836 .48 =)o -FSel€s & UseTar + Sales Tax Compensadon Fund Pdlic s.fety Fun+ Sales Iaxs4 .39 2.10$2 7 to Again, a review of 3'd quarter data for 2015 (remitted to the SBOE in October - December 201 5), shows increased sales tax revenues continue, with most major industry groups reporting a positive change compared to the same quarter of 2014. ln total, taxable transactions were up 14.5 percent from the third quarter of the previous year. !9!le!!PstdleJl11 I ,//-,/,//II 7 I I Tlzltf ?,72,1.1 {n &ls.r€s5 dld Horels GarE al Goods &rd.tg al(l CsEtucto.r Drugs The Business and lndustry group shows the largest dollar increase due to one large transaction in the area of energy/utilities. But the City's largest sector - Autos and Transportation - continued to grow at a steady rate, as low interest rates, more fuel-efficient drive trains and declining fuel prices continue to push the auto industry foruard. The strength of Burlingame's Auto Row boosted autos and transportation results that were 5.8 percent higher than in the 30 0.14 ;l!A FO9 Fl'lo FYll Fl|l2 ml Flrla tY15 FYl6 Fiol.ctbn 3t 2(Ix $.ux grx toqx tl(II( ettx !0( 2015-16 Mid-Year Repon March 16, 2016 comparable quarter from the prior year. Although the demand for automobiles was anticipated to level off somewhat in FY 2015-16, the sector as a whole should remain fairly strong for the remainder of this fiscal year. Srer&r.|tllriedllrtE-0rile a,.o. and rrn,..ponrrb. s1 2o0K Couot 159 Bual 33 And hdrratry Corr{ ml Raaardra Aad Hoa.lr Cotr.t 179 3.r.1Coutr, Pcc.3 s800K 5600K SlOOK $200K 50K G.nd.l Co unir Goods Couni 825 Coutn 6l FlrI Arld 3.rYb. ffion. Euildane And Coisructioir ? Food And Orug. Count 5l 4Q 10 't3 20 13 30 13 40 13 1Q 14 20 t4 30 14 40 14 10 15 20 15 30 15 It is interesting to note that the City's share of the countywide use tax pool jumped nearly 12 percent compared to same quarter in 2014. Use tax is the responsibility of the buyer rather than the seller and does not involve a California 'point of sale". Therefore, the tax is coded to the county of use and then distributed to each jurisdiction in the county on a pro rata share of taxable sales. While these receipts represent only 1 0-12 percent of the total sales tax revenues (and are categorized by major industry group along with point-of-sale receipts), the increase reflects a continued acceleration of online shopping for merchandise shipped from out of state. This trend, along with a shift in consumer spending habits to non-taxable goods and services, puts pressure on brick-and-mortar retailers and the underlying sales tax base for local governments. The City's FY 2015-16 adopted budget for sales taxes corresponds to a 5.8 percent growth over the prior mid-year anticipated sales tax revenues. However, due to revenues higher than anticipated in the FY 2014-15 budget, continued strength in taxable sales, and the unwinding of the State's triple flap mechanism, an upward adjustment of $1 .66 million (an additional 12.5 percent) is proposed for lhe cunent fiscal year, for a total projection of $13.2 million in sales tax revenue. Transient Occupancy Taxes (TOT) - TOT revenues constitute Burlingame's largest General Fund revenue, and are usually a good indicator of cunent economic activity. TOT revenues are reported and paid to the City each month (for the prior month), so results as of January 31,2016 reflect the first six months of the fiscal year. The budget for FY 2015-16 was established based on TOT collections through March 2015, when year-end results were projected to be 31 sr.000K 2015-16 Mid-Year Report March 16, 2016 approximately $22.5 million, an increase of 5.4 percent from the prior fiscal year. Noting the exceptional low vacancy rates, a continued rise in average daily room rates (ADR), and perhaps additional revenues from the Super Bowl in February 2016, the original fiscal year 2015-16 budget projected that TOT revenue would grow an additional 5 percent, to a projected $23.1 million. HistoricalTransient Occupancy Tax Revenue by Quarter --{.f.- 40 35 :to E .9 =20 - 2014-15 - 2013-14 - 20u-13 - 2011-12 - 2010-11 - 2fl)9-10 v5,3 5.7 4.1 4,2 .8 5.0 7 ___-/ 3.E -----6 2.7 2.8 2.6 2.5 2.t Q3 q4 ln actuality, the City ended the 2014-15 fiscal year with nearly 23.7 million in TOT revenues Occupancy rates as reported by the City's hotels have remained fairly robust. However, TOT revenues continue to be highly vulnerable to the cyclical nature of tourism and changes in the economy. The City continues to project TOT revenues conservatively, as hotel room pricing has far outpaced local pricing indices as well as inflation; as such, it is expected that in the near term, price elasticity will constrain groMh. Locally, Burlingame hotels reported an average occupancy ,ate of 84.7 percent between July and December 2015 and an ADR of approximately $162, which contributed to a 12.6 percent increase in TOT revenue. Current receipts outpaced prior year receipts during the first six months of the fiscal year, and the City believes that modest growth will be felt in the remainder of the year Anticipating a modest rate of continued growth, a new projection of $25.2 million is proposed at mid-year for TOT revenues, representing a 6.3 percent growth rate in the 201 5-16 fiscal year. Other Taxes - A number of other sources provide tax revenues to the City's General Fund. Although they are consolidated for reporting purposes, prior year actual amounts and the current year activity for each source has been reviewed for the most accurate projection of 2O1 4-15 year-end results. 15 10 Q2Q1 A significant decrease in the volume and value of real estate sales during the recession is reflected in the City's Propefi Transfer fax revenue, as shown in the chart below. The City receives this revenue the month following a real property transaction, splitting the 0.11 percent tax evenly wilh the County. Although improved home values have pushed these receipts higher with the recovering economy, property turnover in lhe area continues to be relatively low. '1) 8.2 7.6 6.3 5,7 4.O 3.3 5 Fiscal Year 2008-16 Real Property Transfer Tax Revenue 55(I),(m 54s0,06 346,00 93sopo 530,oo 92so,flx) 92rr,,(xl, s15O,(xD S1(I),{m 5s0,o0 so s472,@O s435,853 s379,266 s347,855 $280.059 \2 ,408 2qB{B 2rx}r-10 201G11 2011,12 m12-13 zJ73-14 2014-15 2015-15 (Proiect€d) 2015-16 Mid-Year Repoft March 16, 2016 The FY 201G15 amount received for property transfer taxes was $436,852. Current year (July 2015 through January 2016) tax receipts are coming in about 6.1 percent higher than last year's receipts during the same time period. So, depending on real estate sales in the remainder of this fiscal year, this revenue is expected lo come in higher than the $360,000 budget. Month to month variation in real estate sales (reflected in the chart below) makes this revenue difficult to project. However, staff conservatively proposes a $112,000 increase in the FY 20'15-16 budget for the City's property transfer tax revenues. Year-to-date Busrness License 7ax revenues are coming in at rate 1.4 percent higher than last year. This includes the special business license tax assessed on airport parking enterprises. To reach the budget of $1 million for the current fiscal year would represent a 3.4 percent increase over the 2014-15 fiscal year results for business license revenues. When the projection for this revenue source was developed, staff expected to be able to intensify compliance efforts to maintain the higher volume expected in an improving economy. For the past couple of years, staffing changes and attention to other priorities within Finance have made this projection difficult to achieve, and a $27,000 decrease in the budget is proposed for this revenue source. The largest category of Burlingame's Franchise Fees is derived from the regional garbage hauler (8 percent of revenues), and is collected and remitted monthly. Because there have Gty ot gurllngame Real Prcperty Transfer Tax Revcnue Activlty liuly 2014 - D.(!nb.r 2019) .+4 r+n a..a x+s br3 r+s .|a c a JJ March 16, 2016 been no changes in solid waste rates since January 1 , 2012, there should be little change in the franchise fees derived from this activity, and no mid-year adjustment is proposed for fiscal year 2015-16. The reason for the slight decline in garbage franchise fees in recent years is due to a change in the way the fee is charged: instead of a percentage of the total amount billed for solid waste services, the City has authorized the franchise fee be applied to billings nef of agency fees - fees charged to recoup the City's cost of certain solid waste activities. Franchise fees for the provision of gas and electric utilities were slightly over-estimated in the prior fiscal year. Although these revenues are not received until April, there is no indication that the cunent year's revenues will deviate significantly, and the current year adopted budgets for these fees appear to be on target. However, a $5,000 upward adjustment is proposed for video service franchise fees, as these receipts appear to be coming in at a higher rate than last year. Cable franchise fee revenues are also a bit ahead of proiections, and can be adjusted upward by $14,000. FY2015-16 Description 2013-14 Actuals 201+15 Actuals 2015-15 Adopted Budget Midyear Proiection Gas Electric Garbage Cable TV & wave Astound AT&T video Service Total s 10s,382 s 213,447 711,918 444,500 1M,630 109,000 s 220,000 710,000 444,W 100,000 109,000 5 220,@O 710,000 458,000 105,000 14,000 5,000 s 1,375,52L s r,579,976 s s83,000 s 1,602,000 s 19,000 201 5- 1 6 M id-Ye ar Re port Licenses and Permits - General Fund revenues in this category, which consists largely of alarm permit fees and taxicab licenses, decreased neatly 25 percent ($28,000) in FY 20'14-15 compared to the previous year, the anticipated result of a decrease in the charge for alarm permit fees effective July 1, 2014. With a budget of $87,000, these receipts account for a very small part of total General Fund revenues. Fines, Forfeitures and Penalties - This category consists largely of revenue from parking citations and vehicle code violation fines. Parking citation revenue in FY 2014-',l5 recovered from the prior fiscal year amounts due to the completion of the Burlingame Avenue Streetscape project early in the fiscal year. (Steps were taken lo make parking available and as easy as possible to access, with less emphasis on compliance, during the construction of the streetscape improvements.) However, current receipts are lagging that of the prior year due largely to a turnover in staffing. Although staffing issues are being resolved and the volume of parking citations issued will increase for the remainder of the fiscal year, the revenues from these citations will trail these issuances by at least a couple months. Revenues from this source are expected to be close to that of the prior fiscal year, and staff recommends a $129,000 reduction in the budget for this revenue source for FY 2015-16. Although no significant change in citation revenues is anticipated in future years, the cost of citation processing and adjudication should decrease as a result of the competitive bid process completed last year and effective July 1, 2015. Use of Money and Property - This revenue category includes lease payments received on various City properties. Budgeted revenue for the current fiscal year is proposed to be increased by $14,500 to reflect cunent year receipts and collectability, as well as amounts that are based on concessions and percentage rent. Midyear Amendment 172,775 5 210,985 724,634 4p;O,529 86,598 201 5-1 6 Mid-Year Repora March 16, 2016 lnvestment lncome - Yields on municipal portfolios dropped steadily following the 2008 market downturn. Over recent years, the Federal Reserve has implemented monetary policies to keep credit affordable and inflation in check to help the economy recover from the recent recession. Similar lo other cities, Burlingame invests in only the safest of securities (the highest priority of the City's investment policy is preservation of capital), and yields have continued to hover at historic lows for such investments. The City has contracts with PFM Asset Management, LLC. for outside investment advisory services. PFM assists in the annual review of the City's ongoing cash flows and investment goals, and recommends any appropriate revisions in the investment policy. The managed portfolio's benchmark is the Bank of America Merrill Lynch 1-5 Year U.S. Treasury lndex, with a duration of 2.64 years. The market value of the portfolio as of December 31,2015 was $117.7 million, consisting of a $72 million managed pool of top-rated securities, $44.1 million in the State Local Agency lnvestment Fund (LAIF) and $1.6 million in the County pool. The City's aggregate investments (including the very liquid State and County investment pools) averaged a yield to maturity of 0.92 percent. lnterest earnings for all of the City's funds in FY 2014-15 were approximately $0.8 million, below the $1 mitlion combined budgets for the year. These results, and the impact of the year- end "markto-market" adjustment, were unknown with the development of the current year pro.jection. Yields had appeared to stabilize at historically low rates, making, year-end "mark-to- market" adiustments less significant. However, given the Federal Reserve's intention of easing its monetary policy very gradually, there was reason to expect short{erm investment rates lo rise modestly in FY 2014-15. The combined effect of an over-estimated budget in the prior year, along with the anticipation of higher interest rates which did not materialize (the Feds only recently announced an increase in the federal funds target rate), was interest revenue projections that were slightly higher than currently foreseen. However, the aggregate yield to maturity on the City's investments of 0.92 percent compares favorabty with the 0.81 percent reported in last year's mid-year analysis. The Local Agency lnvestment Fund (LAIF), which holds the majority of the City's idle cash, is yielding 0.37 percent, up from 0.26 percent one year ago. Revenues from the City's investments are therefore anticipated to be higher than in the prior fiscal year in total. Actual income earnings are allocated out to other City funds based on average cash balance throughout the fiscal year. As cash balances vary from year to year within the different funds, interest earnings by fund are difficult to project. Of the total interest earnings now projected for the 2015-16 fiscal year, $323,000 is projected to be General Fund interest revenue. Staff has proposed adjustments to the interest revenue budgets in all funds that will be credited with any material interest earnings in FY 2015-16. These mid-year adjustments will provide a more accurate projection of interest earnings to the various funds for future budgets. State Subventions (lntergovernmental revenues) - Through various pieces of legislation and propositions, the State of California has placed a requirement to reimburse local agencies for costs born when the State mandates a new program or higher level of service to be provided by those local agencies. This reimbursement process is known as mandated cost claiming. Over the years, many of these state mandates have been suspended to save the state money, and receipts for prior claims were so erratic that they were no longer included in the City's budget. Yet, based on the continued health of the State's economy, staff conservatively estimated $25,000 of state reimbursements of prior year mandates in the FY 2015-16 Budget. Then in May, the Governor issued his 2015-16 May Revise, noting that state revenues had exceeded the 2014 Budget Act's revenue estimates. This pulled the pre-2004 mandate 35 2015-16 Mid-Yeat Repoi March 16, 2016 It is unknown whether the Governor's Budget for FY 2016-17 will include additional funding for mandatory cost claims. At any rate, the timing and allocation of these funds to the state-wide agencies for various mandates and accrued claims will not be determinable in advance. Therefore, the budget should be decreased $15,000 to reflect only year{o{ate receipts. Year{o-date receipts of State Motor Vehicle License Fees (VLF) total $12,000. Following the 2011 State Budget Act, which stripped most remaining VLF allocations from cities, revenues from this source are not significant and always uncertain. Thus, the $12,000 represents an increase to the previous zero budget. Also in this same category of revenues, the POST (Peace Officer Standards and Training) reimbursement budget should be decreased $15,000, to reflect a reduced participation of the City's police officers in POST programs than originally anticipated. Charges for Services - General Fund revenues in this category were up 13.6 percent in Fy 2014-15 compared to the previous year due largely to a continued interest in the City's recreational programs and development services. As seen in the chart below, most departments generate some amount of receipts in this revenue category. With a budget of over 4.4 million, these receipts account for approximately 7.2 percent of Burlingame's total General Fund revenues. Receipts from recreational services were 8.1 percent over the adopted budget in fiscal year 2014-'15, and 4.6 percent higher than projected at mid-year. Although some of this growth was anticipated in the current year budget, 2015-16 fiscal year{o-date receipts indicate further demand for recreational offerings. The latest projection for revenues from recreation fees is $168,200 higher than the adopted budget. This is accompanied by a slight increase in program costs. Park fees are projected to be $23,000 higher than originally budgeted, largely due to an increase in fees generated from groups that use the fields. These fees were increased last year, and the impact on parks special services revenue was difficult to project. Department FY14-15 Actual FY15-16 Current Budget FY15-16 Midyear Proiection Parks Recreation Planning Public Works Police Library Other Total, Ilepartmenlal Fees 5 3,942,937 S 4,4A 132,260 2,206,209 546,978 383,054 86,648 580,243 7,545 758,475 2,599,854 677,287 426,41O 60,287 613,879 5,425 141,500 2,520,OOO 551,500 448,500 67,500 670,000 4,500 164,5m 2,688,2@ 631,500 383,000 55,500 617,000 4,500 23,000 168,200 80,000 (6s,s00) (12,000) (s3,000) 1,618 s 4,/rO3,sO0 S 4,s44,20O $74o,7@ 3.2% 36 repayment "trigger mechanism", bringing additional funds ($765 million in total) to counties, cities and special districts, and fulfilling the state's obligation for pre-2004 mandates in their entirety. Payments for both the City's mandated cost claims and interest were accrued to the 2014-15 fiscal year. The total of this state revenue was over $313,000 for fiscal yeat 201+15. FYl3-14 Actual FY15-15 Year-End Midyear Up (Down) Amendment % 76.3% 6.7% L4.5% -74.6% -77.8% -7.9% o.e/. Revenues from Plan Checks and Permits also experienced a healthy increase in the prior fiscal year. These activities continue to grow in volume, and are anticipated to slightly outpace the prior year. Much of the $80,000 increase in the 2015-16 fiscal year projection reflects the prior year growth, although revenues from zoning/sign plan checking and use permit fees will be slightly lower. Public Works fees for services are experiencing a slightly slower pace than in the previous fiscal year; these fees are projected to be $65,500 lower than the proposed budget for the current fiscal year. False alarm charges for Police Services are down largely due to last year's procedural change in the issuance of alarm permits. Property owners are given the opportunity of obtaining an annual alarm permit, which allows for two false alarms prior to incurring these charges for police response. Although Library fees are coming in at a faster pace than last year, they fell short of budget in fiscal year 2014-15, and current year receipts indicate the need for a $35,000 downward adjustment in this revenue line item. ln addition, remuneration for the provision of library seryices to the Town of Hillsborough, calculated after the year-end and based on average per-capita costs, is less than originally estimated by $18,000. This downward adjustment is also reflected in the attached FY 201 5-16 mid-year budget amendment. Other Revenues - The City receives other miscellaneous revenues from time to time. Current year receipts indicate that these miscellaneous revenues (unclaimed property from the State, rebates, miscellaneous refunds of prior year expenses, etc.) will exceed the adopted budget of $30,000 by an estimated $16,500. Last year the City received the $1 million payment required per the Development Agreement for the Burlingame Point project. The agreement identified certain impacts of the development in regards to traffic in the surrounding region; the payment is to mitigate these impacts by funding of the Broadway lnterchange project. The city's share of the Broadway lnterchange project (g5 million) has been fully appropriated in the city's capital Project Fund; construction on the project has begun. Therefore, the payment on the Burlingame point poect represenled one- time revenue to the City's General Fund. No such one-time development fees are anticipated with any certainty in the remaining months of this fiscal year. J/ 201 5-16 Mid-Year Report March 16, 2016 201 5-16 Mid-Year Report March 16, 2016 City of Burlingame 201 5-1 6 Mid-year Report Attachment B - General Fund Expenditures The following table shows the FY 2015-16 mid-year assessment of departmental (operating) General Fund expenditures: CITY OF BURLINGAME, CA SUMMARY OF GENERAL FUND EXPENDITURES Description FY20l3-14 Aatual FY2014-19 Actual fYl5-16 Currenl Eudget FY15-16 Midyear Proiection FY15-15 Mldyear Amendma Year-End Up (Downl % General Govt (Ad,nin Svcs) Public Safety Centrdl County Fire (Burlin8ame) Police & Dispatch Publk Worls Community Dev€lopment - Plannin3 Leisure & Cultur.l Servkes Aquatic Center Library Parks & Recreation Total Expendit!.€. 5 5,870,151 5 4,121,895 S 5,]7a,752 S5,112,7s2 g (66,000)-1.3% 9,553,912 LO,221,593 3,339,585 L,od.l,240 LO,470,376 12303,118 4,769,873 L,244,L99 L!,L45,345 13,425,563 4,9t4,735 r,563,474 11,145,345 13,790,663 4,914,735 L,563,474 0 o.o% 2.1% o.ov" 0.0% 365 ,000 355,974 3,920,511 5,836,196 ,O0,831 4,392,4fi 6,702,334 424,0@ 4,462,247 7,920,5L6 424,m 4,462,217 7,972,5L6 0 0 0 0 0.0% o.w" 0.7%52,000 I4o,1 39,162 S il4,'t0to84 5 49,4!4,722 S 49,7as,722 $ 3s1,@o 0.7% Although many of the proposed mid-year budget amendments are off-set within each department or division, they are described in detail below to illustrate changes in operations lhat were not anticipated at the time the FY 2015-16 budget was adopted. CIWOF BURLINGAME, CA SUMMARY OF GENERAL FUND EXPENDITURES BY Gener.l Fsnd Cateqorl6 Salarles & Wates Benefits Operatint Cost lntemalService5 CepitalOutlay TotalExpenditures FY2013-14 Actuals FY2014-15 Aatuals FY15-15 Current &rdset FYl5-16 Midyear Proj€ctk'Ir FY15-15 Midyee. Amendmalrt Year{nd Up (Oownl X 5 L3,724,446 8,414,673 L5,227,066 2,651,231 57,747 513,951,37s 8,396,197 18,102,091 3,861,235 ,L6 5 16,137,377 9.238,940 20,530.453 3,299,720 728,232 51s,966,3i7 9,603,940 20,795,453 3,299,720 120,232 (Su1,om) 365,000 165,000 0 (8,000) -1.!% 4.0% 0.8% o.o% 4.2% 940,139,163 549,424,722 549,78s,r22 S3s 1,000 0.7% General Fund Personnel Costs The challenge of any public sector agency is to provide competitive salary and benefit packages in order to recruit and retain quality talent, while keeping the cost of providing these packages ata reasonable and sustainable level. Negotiated or imposed contracts in years since the recession have resulted in significant savings and have assisted in achieving structural benefit changes that will help control future employee benefit costs. For example, Burlingame 38 201 5-1 6 Micl-Year Re port March 16, 2016 employees are now paying a portion of the employer's retirement rate in addition to the employees' rate, as well as a larger portion of their health care premiums. Retiree medical benefits have been significantly reduced for new hires, and provisions for the payout of sick leave hours have been eliminated. Although these savings are evident in recent year budgets, many of the savings will not be realized in full for many years. ln the current more favorable economic environment, compensation increases are anticipated to keep up with cost of living indexes. Because personnel budgets are based on full occupancy (no vacancies) of permanent positions, budgetary savings will occur in most every department. However, personnel cost savings due to vacancies are difficult to estimate and vary by departments and programs, so no budget adjustments have been made on a City-wide basis. It should also be noted that most health plan rates were increased effective January 1, 2016; the increases ranged from 3.+18.75 percent, depending on the plan, with an average of 10.0 percent across all plans. Although no adjustment is being made to the departmental budgets to cover the impact of these increases for the last half of the current fiscal year, the changes will put added pressure on personnel costs in the upcoming FY2016-17 budget. Personnel costs (and total operating expenditures) for the General Fund increased significantly in FY 2O14-15 due to the inclusion of contributions to the irrevocable trust fund established in October 20'13 tor the purpose of funding the City's retiree medical benefit obligations. The full costs of these past and current obligations are now reflected in the departmental budgets. As best practices would dictate, the City is committed to contributing the annual required contribution to the trust fund in both good and bad financial times, using conservative, realistic assumptions that are adjusted based on experience, and making changes to benefit and contribution rates as needed. Administrative Services - The budget for this group of departments supplies the resources that support services often referred to as "general government" activities. Although each department is bound by a separate budget, recommended adjustments are fairly minor, and they are combined in this report to give an overall context to the administrative costs of the City. Recall that much of the reduction in the Administrative Services budget for fiscal year 2014-15 was due to the elimination of "Other Employee Benefits" (over $2.5 million in fiscal year 2013-'14) from this grouping. The category used to house the "pay-as-you-go" portion of retiree medical benefits. Beginning in fiscal year 2014-15, these costs are borne by all departments based on a payroll allocation. ?o An appropriation for part{ime salaries was included in the FY 20"15-16 budget for the City Attorney's Office to provide part{ime unbenefited professional assistance with an emphasis on special projects and anticipated development-related activity. Although it is expected that the position could be filled in the near future, the position is unfilled at midyear, and salary savings of $25,000 are anticipated. Additional salary savings of $60,000 are available due to the vacancy of the Code Compliance Officer position for most of the fiscal year. These savings will provide for the adequate additional appropriation proposed for part-time contract assistance, currently in place, to perform the code enforcement function pending recruitment for the position. The Finance Department experienced two vacancies early in the fiscal year, and should experience budgetary savings of approximately $90,000 in regular salaries and benefits. These savings are sufficient to cover the proposed increase in part{ime salaries (94,000) and contractual services costs ($20,000) needed to cover the workload due to the vacancies. The Parks Division has been dealing with staffing shortages since the beginning of the fiscal year. Two full-time vacancies, modified duty restrictions, and military leave have all necessitated 2015-16 Mid-Year Repod March 16, 2016 a higher use of part-time employees than originally anticipated. However the $25,000 additional part-time costs can be offset by salary savings from the vacancies. Staffing vacancies were also experienced in the Polico Department due to injuries and one retirement. Overtime was utilized earlier in the fiscal year in response to a series of burglaries on the east side of the City. The $30,000 in overtime incurred will be more than offset by the salary savings provided by the vacancies. The higher contributions will serve to more quickly fund the plan's previously accrued liabilities. Estimated employer rates for CaIPERS Classic Employees are shown on page 24 of this report. Contributions for the City's Miscellaneous Plan employees will remain at one blended rate for Classic and PEPRA (Public Employees' Pension Reform Act) employees. PEPRA applies to employees new to the CaIPERS system as of January 1,2013. The Safety Pooled Plan has a separate employer contribution rate for PEPRA employees (12.8 percent). Five of the City's safety workforce of 38 employees are PEPRA employees. Non-Personnel Costs Small amendments are being proposed within the Human Resources Department to better align the budget with actual expenditure needs. Demands for the category of Personnel Examinations are less than anticipated; staff proposes that these savings ($7,000) be reprogrammed to cover both the costs of recent enhancements to the city-wide safety awareness program($5,000) and the unanticipated higher costs of professional association fees. An increase is also proposed in the Recreation budget for program supplies and material due to increases in enrollment in vacation camps. Although the expense will be offset by income from the camp programs, savings were identified in building and grounds maintenance ($3,000) and capital outlay ($1,000) to completely fund this increase. Staff also proposes that an additional $2,000 originally budgeted for capital outlay be used to increase the travel and meeting budget: additional staff has been able to attend training opportunities this year, including the national conference. 40 There is one significant budget amendment proposed in the expenditure category of Employee Benefits. The increased budget is needed to properly reflect higher pension contributions to the CaIPERS pension system (pooled Safety Plan) required for the current fiscal year. Beginning in FY 2015-16, CalPERs will collect employer contributions toward the unfunded liability (UAL) of pooled plans as dollar amounts instead of the prior method of a contribution rate. Employers are invoiced for the UAL amount at the beginning of the fiscal year. The plan's normal cosl contribution will continue to be collected as a percentage of payroll. ln determining pension costs for the budget, Finance staff determined a percentage of payroll to cover both the normal costs and UAL, but that calculation proved to be inaccurate. An additional $365,000 will be needed to cover the safety pension contributions for the current fiscal year. This adjustment represents a 26.2 percent increase in this line item for the Police Department. Administrative Services - As previously noted, funding for staffing shortages in the City Attorney's Office ($83,000) and Finance Department ($20,000) were paid for (at least in part) through contractual help. The salary savings also cover an additional $2,000 appropriation in the City Attorney's Office to pay for increased required noticing for various litigation-related communications. Parks and Recreation - An increased appropriation is proposed for the Parks Division to perform needed renovations to drought damaged athletic fields and replacement of select portions of the Burlingame Avenue landscaping. The $9,000 request can be offset with anticipated savings in funds budgeted for small tools ($4,000) and capital outlay ($5,000). 201 5-16 Mict-Year Repod March 16, 2016 Rental of the Mills High School gym will replace use of the Burlingame lntermediate School gym, which is not available for the summer camp program. This rental will need to be prepaid at the beginning of the season. Program fees will be adjusted for this increase ($14,000) in program costs. A $43,000 increase in contractual services is proposed in Recreation due to increases in program enrollment, in particular youth carpentry, Peninsula Music Together, and Zumba. These expenses will be more than offset by the revenue increase anticipated for all Recreation classes in FY 201 5-16. Finally, staff anticipates an increase in the aquatics programs by approximately 8 percent, pending the approving of a new contractual agreement with the San Mateo Union High School District. Because the actual expense will depend on the date the new agreement becomes effective, no budget amendment is being proposed by staff at this time. Public Works - Although some budget adjustments were needed between categories for Public Works activities, the General Fund budget was found to be adequate for regular, ongoing operations of the department. 41 2015-16 Mid-Year Repod March 16, 2016 City of Burlingame 201 5-1 6 Mid-year Report Attachment C - General Fund Five-Year Forecast Forcdst 2077-78 Fonast 2018-19 Forcast 2019-20 Expenditurc Co'f,gotbs Salaries & Wages Eenefrts 0perating Costs lntemalServices CapitalOutlay TotalEpenditures Operadng Revenu€ Transfers ln (Out) Capital Renewal & Replacement Reserve Debt Service Change in Fund galance (Revised) Bu.lget 2U5.15 5 11,7t6,4N 13,244,000 25,200,000 1,602,000 973,000 65,000 472,N0 87,000 836,000 220,500 4,544,2@ 46,500 157,000 323,000 Forccost 2015-17 s 18,025,000 12,460.000 25,000.m0 1,618,000 990,000 65,m0 400.m0 87,000 8s3,000 226.000 5,000,000 17,000 157,000 389,000 s 18,61s,000 12,932,m0 26,780,000 1,634,000 1,008,000 55,000 408,000 88,000 870,000 232,m0 5,150,000 17,000 158,000 428,000 s 19,231,000 13,320,000 25,052,000 1,583,000 1,027,000 65,000 416,0@ 88,000 887,000 237,000 5,305,000 17,000 159,000 471,0m s 19,876,000 13,720,000 26,8i14,000 t,1343co 1,045,000 65,000 424,000 89,000 905,000 243,000 5,454,000 17,000 159,000 518,000 5 20,ss1,000 14,131,000 27,649,000 1,786,m0 1,065,000 55,000 433,000 89,m0 923,000 249,000 5,628,000 17,000 160,000 570,000 $ 6s,487,600 (1s866,377) (9,603,940) (20,7914s3) (3,299,720r. i.120,2321 {17,268,000) {17,912,0m) (18,351,000) (10,612,000) (11,3s3,m0) (12,0s4,000) (21,995,000) (22,998,000) (24,@6,000) (3,399,m0) (3,s01,000) (3,506,000) (124,000) (128,000) (131,000) (1&876,000) (12,864,0@) (2s,089,000) {3,714,000) (11sr000) (19,364,m0) (13,343,m0) (26,219,m0) (3,82s,000) (139,000) 149,78s,7221 (s3,399,0m) (ss,892,m0) (s8,148,m0) (50,578,000) (52,890,000) 15,701,878 12,889,m0 12393,m0 10,820,0m 10,425,000 10,425,000 ,r,288,242) (s,s00,000) (6,404,731) (1,248,000) (3,000,000) (5,761,5471 (1,324,000) {3,000,000) (5,881,546) (1,900,000) (3,m0,m0) Q,75r,2491 (1,996,000) (3,000,000) 12,777,739], (2,106,000) (3,000,000) .2,792,471) s 2,508,905 s 2,873,453 $ 2,287,454 s 3,155,751 5 2,65r,251 s 2,527,523 Property Tax SalesTax Transient Occupancy Tax Other Taxes - Franchise Tax other Taxes - Business Licenses other Taxes - State HOPTR other Taxes - Transfer Tax licenses & Permits Fines, Forfeitures & Penalties Use of Money & Property Charges for Services Other Revenue State Subventions lnterest lncome Total Revenues s66,288,000 s 58,385,000 s 68,958,000 s 71,103,000 s 73,316,000 Re'Enue CotegotEs Foreust 2020-21 APPROVING ADJUSTMENTS TO ESTIMATED REVENUES AND APPROPRIATIONS WHEREAS the City Council of the City of Burlingame has reviewed and considered the City's mid-year fiscal analysis; NOW THEREFORE RESOLVED, by the CITY COUNCIL of the City of Burlingame, California and this Council does hereby APPROVE and AUTHORIZE the Finance Director & Treasurer to amend the current Fiscal Year 2015-16 Budget as outlined below to reflect actual fiscal conditions and projections outlined in the Mid-Year Report: Amendments to Estimated Revenue General Fund: Other Funds: Measure A Gas Tax (HUTA) $ 816,400 1,659,000 2,100,000 19,000 (27,000) 't 12,000 2,000 (129,000) 14,500 140,700 16,500 (18,000) (77,000) RESOLUTION NO. A RESOLUTION OF THE CIry COUNCIL OF THE CITY OF BURLINGAME IN THE FISCAL YEAR 2015.16 BUDGET Property Tax Sales and Use Tax Transient Occupancy Tax Other Taxes - Franchise Tax Other Taxes - Business Licenses Other Taxes - Real Property Transfer Tax Licenses and Permits Fines, Forfeitures and Penalties Use of Money and Property Charges for Services Other Revenue State Subventions lnterest lncome 24,000 38,000 General Fund Transfers ln (Out): Transfer to Capital Projects Fund - Streets (from General Fund) Transfer from General Fund - Streets (to Capital Projects Fund) Transfer to Capital Projects Fund - Renewal and Replacement Reserve (from General Fund) Transfer from General Fund (to Capital Projects Fund - Renewal and Replacement Reserve) General Fund: Finance Police Recreation $(250,000) 250,000 (2,500,000) 2,500,000 $ (66,000) 365,000 52,000 Other Funds: Street CIP $ 250,000 Mayor l, MEAGHAN HASSELL-SHEARER, City Clerk of the City of Burlingame, do hereby certify that the foregoing Resolution was adopted at a special meeting of the City Council held on the 4th day of March, 2015 and was adopted thereafter by the following vote: AYES: NOES: ABSENT: COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: City Clerk Amendments to Appropriations: RESOLUTTON NO._ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME APPROVING THE TRANSFER OF $5 MILLION FROM THE GENERAL FUNO TO THE CAPITAL PROJECTS FUND - RENEWAL AND REPLACEMENT RESERVE IN THE FISCAL YEAR 2015-16 BUDGET WHEREAS, the City of Burlingame's General Fund Reserves Policy was developed to ensure optimum reserve levels specific to the City and to provide options for responding to unexpected issues and a buffer against economic downturns and other forms of risk; and WHEREAS, the General Fund experienced a surplus $5. 1 million higher than anticipated in the budget for the fiscal year ended June 30, 2015; and WHEREAS, based on the City's mid-year fiscal analysis the General Fund shows a pro.lected total fund balance of $31 .7 million at the end of the 201 5-16 fiscal year; and WHEREAS, the Renewal and Replacement Reserve in the Capital Projects Fund was established with the intent of providing funding for the replacement of City assets; and WHEREAS, in recognition of the City's large backlog of facility needs, staff has recommended that the Renewal and Replacement Reserve be funded by an additional $5 million, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BURLINGAME DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: APPROVE and AUTHORIZE the Finance Director & Treasurer to amend the cunent Fiscal Year 2O15-16 Budget as outlined below: General Fund Transfers ln (Out): Transfer to Capital Projects Fund - Renewal and Replacement Reserve (from General Fund) Transfer from General Fund (to Capital P@ects Fund - Renewal and Replacement Reserve) (5,000,000) 5,000,000 Mayor I, MEAGAN HASSEL-SHEARER, City Clerk of the City of Burlingame, do hereby certify that the foregoing Resolution was adopted at a special meeting of the City Council held on the 16th day of March, 2016 and was adopted thereafter by the following vote: AYES: NOES: ABSENT: COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: City Clerk 3116/2oL6 Summary of Economic Indicators aaaaaaa aaoaaaaaara Economic lndicator Proiected 20ltl6 Forecast 2016.17 U.S. Real GDP Growth 3.0% California Non-Farm Employment GroMh 2A% California Unemployment Rate 5.9%5.6% California Median Existing Home Prices GroMh 6.5./.8.8% Califomia Residential Building Permits 98,000 10'1,000 Maior General Fund Sou aaaaaaa orlaaaaaorces 2 t5.rt zlJ\ 1t.3!t 3t.5ra Overview Economic lndicators Economist lntelligence Unit (ElU) Forecast Reol GDP Growth US (i1 chonge) 2.2 Source EIUElo!4Oig.nd Commodliv torea3t. Mar.h 20ti a ra a a atoaaaaa aaaaa 1 3l16l2016 r General Fund Revenue Forecast r Property Tax Assumptions o Sales Tax Assumptions . Transient Occupancy Tax (TOT) Assumptions . General Fund Revenue Summary o Expenditure AssumPtions . lncreasing CaIPERS Employer Rates . lmpact of Other Personnel Costs o Next Steps oaaaaa a aaaaaaaaaaa 3176/2076 Fiscal Year 201 5-16 Mid-Year Status Report City of Burlingame, CA Budget Study Session March 16,2016 BURLI o Projected Revenues (p.9) o Property Tax, Sales Tax & Transient Occupancy Tax o All General Fund Revenues o Projected Operating Expenditures (p.10) o Projected Fund Balance (p.11) o Other Funds (p.14) o S-Year Forecast and Next Steps (p.21) aaaaao aaaoaaaoaao oaaooo aaaaaao oao Overuiew 1 Projected Revenues: All General Fund Sources FYl/r-15 FYl5,15 Up lDown) S Up (Dorn) * Tn.rl6t Ocopancy Lx au.lo..t tifir.. 5r.r. ilorlx R..l ProFty lr.nstr Lr An.r Forftltur.. .nd Pen.ltlcs lrrc of irdlt & Drop.ny irlr..{.mour 8a.nu. s16,672381 11,1@,900 23,598,396 916,900,000 t1Ja5,@0 23,100,m0 971,7,6,@ 13,244,@0 8,2@.@ 3816,400 1,559,000 2,1m,OOO 4.4* 14.3X 9.1% 7579,916 965,675 54,810 435,852 83,840 437,704 207952 4,441,614 1,045,512 465,725 260,7@ 1543,000 1,0@,0@ 56,m 360,@0 45,0@ 965,000 205,0@ 4,403,50O 30,ooo 17t@O 400,0d) 1,@2,0@ 973,0O 66,00o 47!.@ 87,0@ 436,000 720,W 4Fr4,2@ 15J00 152@ 324,0@ 19,000 127,m) 0 112,000 2,60 (129,000) 14J@ 1{o,7@ 165@ {r8,@0) ln.Nl IoLl, Gde6l rlnd R.Enoe S5r.909,08r S60,89E,500 sa,529,100 7.lta 3s55,4a7,600 Projected Revenues: Propertv Tax. Sales Tax & TOT o Property tax for FY 15-16 expected to be $816kor4.8% better than adopted budget . Slightly higher net assessed values . ERAF Refund - Actual receipt $600K better than budgeted . 6.2% higher revenues than in prior year o Sales & use tax actuals expected to be $ 1.6 million or 14.3% better than budget (one{ime) o Transient occupancy tax (TOT) expected to be $2.1 million or 9.1 % better than budget . Continued high local occupancy rates neady 85% 2 3h6l2oi6 aaaaaoa aaa. FY15-16 1.2% lz.lxt 0.096 31.1% 2.4* 113.4%l 7.@a 42% 55.016 (ro.3xl (19-3%) aaaaaaa aaaa 3h612016 Projected Revenues: Sales Tax Triple Flip alt o 5 t Operatinq Expenditures o lncrease in CaIPERS employer contributions for Safety Plan o lncrease in contract personnel in lieu of filling some vacancies . Largely offset by salary savings o lncrease in programming expenditures . Offset by increased charges for services (revenues) and savings in other expenses 3 Projected General Fund aoaaaa. a'ta a 3lL6l2OL6 Proposed Transfers to CapitaI Proieqtsfund o $250,000 requested for capital improvements needed in the Hoover School Area: . Specific traffic & safety improvements - $150,000 . Feasibility Study for sidewalk construction - $100,000 o $2.5 million reduction in General Fund Catastrophic Reserve (October 2015); increase Renewal and Replacement Reserve (transfer out) Pro ected Fund Balance aaaonaa oaa CITY OF BU RIINGAM t, CA GENERAL FU ND MLANCE ASSIGNMEITIS E.ono.nk Stabary f, .aao! Subtotrl, Airi3ned Fo.d 8.bnce ,Y2015-16 aYilola-I5 i ldy.r AriuJ rroj.d.i lhlodnr9 Lh lpoYn)ra s t3,a@,0o0 5 15,700,000 2,4oo,ooo 18.0t6 4,500,000 2,000,000 l irn::i -55.6% 0 0 0 0.016 500,000 500.000 0 0.0% Add. U.asslgi.d Fund 8.lanc. la,3oo,ooo 10r55,052 18,200,000 13J46535 (100,0o01 a,o8!aa3 {5* 29,14 Toral, Endint Fund B.l.nce 4 aaaaaat(taaa.aaat s 28,165,052 S !1,7t16,rr5 S 2,9E1.4a3 10.4% 3/76/2076 Other Funds o Allocation of lnterest Earnings o Capital Projects Funds . Update on some completed projects . Additional appropriations requested for Hoover School area improvements and study o Water and Sewer Funds . Examined for impacts of drought o Minor adjustments in Other Funds aaaaola t o Amend the Fiscal Year 2015-16 Adopted Budget for estimated revenue and supplemental appropriations o Review the Five-Year forecast and consider additional funding of the Renewal and Replacement Reserve 5 Next Steps aaaaoa. aaa oaaa aaaa a a Questions & Comments? Fiscal Year 2015-16 General Fund Five-Year Financial Forecast City of Burlingame, CA Budget Study Session March 16,2016 aaaaaa aaoao,aaaaO.o,; dE 6 3l16l2016 3h6/2ot6 Overview o General Fund Revenue Forecast o Property Tax Assumptions . Sales Tax Assumptions . Transient Occupancy Tax (TOT) Assumptions . General Fund Revenue Summary o Expenditure Assumptions . lncreasing CaIPERS Employer Rates . lmpact of Other Personnel Costs o Next Steps aooaaa. aaa Economic lndicators taa oaa Economln lntelllgerre Unlt (ElU) Fo.€Gst t6i aDp cto*7n lz chah?? 2.5 23 2 1 2010 2014 S.uE.: EIU tcono i( .nd (o.nrEdiw Forxrn Fcbru.rv 2015 7 4 3/16/20L6 Summarv of Economic lndicators aaaaaaa rtaa. Proiected 2015-16 Forecast 2016-17 U.S. Real GDP GroMh 2.70/o 3.O% California Non-Farm Employment Grow4h 2.4% California Unemployment Rate 5.9%5.6% 6.5%8.80/o California Residential Building Permits 98.000 101.000 Maior General Fund Sources aaaaaoa aaa a 8 Economic lndicator California Median Existing Home Prices Gruvvlh !tt ,a-tt 3lL6/2016 aaaaaar ara Property Tax Assumptions o Growth in net assessed values (NAV) contingent upon: . Higher residential property values Local 20'16-17 property roll reflects 5.97% growth since prior year (comp. to 5.5% county-wide) >6% growth in residential values expected statewide o However, County inventories of properties for sale relatively low o Assume that any significant real estate developments in pipeline will not be completed in 5 years Median Home Prices Bay Area Home Prlces Have Ou$aced the Besl ot the State ^le.ran Hdne tuie 1r26,@ 40,@ 9 i,@r & a6 N, @ tort 2013 2016 aoaaaa. aaa art o aaaoa Propertv Tax Assumptions aa o Decline of Excess ERAF distribution in next five years r Based on current year groMh in secured roll, 5.97o/o increase assumed for FY 2016-17 o Five-year forecast assumes 4.0% growth in four subsequent years 911,1$,e J $'o26,m 9 [,515,@ ! le2rr,e 9 tt,rr6,@ t 2o,tt1.@ Property Tax Assumptions City of BurlinSame Net Assessed Valuations Category Parcels Net Asressed Value % Total Residential Comme.cial lndunrial Gov't Owned lnstitutional Miscellaneous Rec,eational va.ant/other SgE Nonunitary Unsecured Totals 7,750 471 195 2 M 727 19 57 I4l [1,0071 55,106,922,682 7,406,432,24L 497,904',9L7 1,135,878 6,739,774 52,54L,265 27,696,48t 42,238,634 2,560,452 307,2Us06 72.3% L6.?% 5.8% 0.0% 0.1% 0.6% 0.3% 0.5% o.o% 3.6% Historkal towth 8,665 54,270 100.0% 3l16l2oL6 10 aaoaooa aaaa 90i7:: h,hrrn ErdrEy G,d.u!... 30116 BlrE GdrRd 306.1 5I-tEC.IFGarlPl6 tooaI cairAl.5rl, Sales Tax Assumptions aaaaaa a aaa a Expected 4.6% average growth slatewde in fiscal year 2016-17 across all categories Tarable Sal€s by Category iEqrarter erolected erolected of 2015 FY2015-15 FY201GU Total Growlh GroMh Autos & Traniportalbn Buildint & Conatructbn Buriness & lndustry Food & Drugs Fuel& SeNke SLtions Generel consumer Goodt Restaurants & ]totab state & county Pools 32-86 5.5t6 75.9% 1.2% 1.6* 11.9% 13-996 133% 1.4% 7.7% 3.7% 2.5% -a.7% 3.O% 6.7% 8.4% 3.1% 2.M t.s% 1.9% 2.7* 2.69t 3.8% 4.4% 100.oet 5.4* 2.91 3/L6/2oL6 11 THE CITY OF BURLINGAME PROPERTY TAX DOLLAR BREAKOOWN aaaaaa. aaa Sales Tax Assumptions aaaaaa aaa a a a Fy201s-16 Fy20t6-17 FY2017-18 FY2018-19 FY2019-20 Saler & UseTar S11,585,100 S12,106,430 S12,620,953 573,725,791 S13,585,194 Sales Tax Assumptions aaaaoaa anaa 3l16/2ot6 72 Percentage Glowth in E{odlmcrt! SahB E'sus Tot l ktail Salcr Fifio.. oa o.lE .l o Expected growth in US Real GDP is -3.6Yo o California GDP groMh is (est.) 4.1% (2014) o Five year forecast provides for a 5.8o/o increase in 2Of.Ft9, declining to 3.5%, which coincides with oiheiiindicators Sales Tax Assumptions Ia a o oaoa. $,00 t6,!0 .4,00 12.oa s0 6600llt!tala - &rtl.r Corf, C*d8 3/L6/2Ot6 TOT Assumptions o The City's largest and most economically sensiti VE revenue source o S-year forecast assumes 3% growth in 2016-17 . Assumes capped growth in ADRs due to price elasticity (cunently averaginS $206 in San Francisco-San Mateo) . Assumes continued high occupancy rates regionally . Adjustment made for new SFO hotel (est. 400 rooms, FY18-19) o Staff will continue to monitor receipts and will revise forecast if needed Fy2015-16 Fy201&17 aY2017-18 FY201&19 FY2019-20 TOT s23,O66,218 523,868,000 s24,A22,72O 524,294,174 s2s,26s,878 26 SAI-ES PER CAPTTA aooaaa. aaa 13 General Fund Revenue Forecast aaaaoaa ollaa Summa orh.. T.g - tnrhi- Lr Othr Tus - aulrB lk.G rE, Fo.t itc I tdni6 -----2)9s5a,,.1,a General Fund Expenditures Forec ast aaaaaoaaoaa.aaaaaaaaAssumptions lrEludes e66ct of cun€nt collecl,ve targEinirg agr€€merts, lrEluding rccenUy Etfied MOUS 6r AFSCME, Departmont H6ads ad CaIPERS rates lo dse, Egdfcandy in for€cast y€a,s Oaler b€rEfls to irEreaso at rarynE rates (from 0-10.6%) lrElrdes a payoll surchaB€ to fund cunent cos| of retjree m€dical benefits IrEludes omdoyee contributions to lEallh care and PERS in accordarce with MOJS Based upon cost of livillg adjustrnerls ,or most nor4€rsonnei cosls, 6% escalalion factor br C€nhal Couty Fila includos a payroll surcharge to fufi prevbusly i1c!fiod costs associated wi$ Etir€€ medical berEfiG for former employoes Reductron in debt seMc€ r€iecled in 20r&r9 Non-Pe.sonnel Costs 3lL6l2oL6 14 s n,@5,m t l.fl5,@ t re:rr,oo s 1er75.m 9 20IsL@ rl3r01!o rl20Io 14,131,oo r,6r,00 !5r4,m t$r,@o 1,rx,000 ,"z6,mo t25,,, z!2.o00 ,rr,o0o 2a10oo 241mo $4rr4m t..,r.sr6 9..,t.,o 9rr,1o+o tL,3r66 aaaaaaa oaaaa Actual d€bt s€rMbe fo( aI odstandie bond issr.Ea: payofi of Masler Equpmonl L6es€ Puehase (t250K anrually), and 12.8 mallbn drcp in debt soNice on Peftsion Obligalion Bords in fscal ,sar 2019 Ass.mes no lErv oerEral obliqalion debt issuarEes or lefimrcinas Bas€d upon a 3% blend€d esc€lalion factor C a pi tal O dl a y (de partn e n tal )8as€ ol 5200,000 plus 3% grcwth Assumes rlimbus€monB br debt seMce ftom oth€a fuds ConlinuirE th. annuel GolElal Fund invesment in Capilal Prcjecls equival€nl to 2% of ToT rEvenues 3h6/2oL6 Forecast of CaIPERS Rates o FY 2015-16 Rates (base) . Miscellaneous Employees 21 .17%o . Safety Employees 2o.23o/o + $775,593 e Rates do not include employee contributions o Estimated rates are for "classic" employees - rates for PEPRA employees will decrease costs over time Enimated calPEtls Rat.5 20!ei 2017-18 201&19 201920 2GIo-ZI 22.44% 24.M 26.60t4 24.ffi 24.& 2t.2i% + 9958,344 21.2C,6 + s 1,174,s39 2L.2tXr s 1,@,e4 2r.2ox + S I,543,790 212et + s 1,857,685 15 General Fund Expenditures Forecast Assumptions (continued) aaaaoaa aaa. Emplovee Gontributions o Cost-sharing agreements with employees to reduce pension costs o Classic employees contributing employer share . PEPRA - Annual contributions for new employees cannot be less than employer normal cost o Employee contributions to health care o Offsets increases to health care costs r Retiree medical program closed to new employees (November 201 1) Forecast of OPEB Contribution aaaaaao aaa raaa . OPEB contributions will increase as shown: 5,215 5.8' 5,381 5,458 5,555 . City fully funds the ARC o However, OPEB costs will be partially allocated to other funds, including Enterprise Funds (approx. 17o/o) aaa(rrtaa aoaa 3/76/2076 7016.17 2017,18 20la-!9 20t 20 L6 General Fund Expenditure aaa o aa otaaaa NE'6 2!161'201r-tlt 2t 1&E 201920 lE ,311l I9rO19a0l (20r95,4531 13r99,r20) ____Jg4 {{qru,r221 t1r,261,@l (10,512.m) t2r.96.@) (3,t99,0@) tl2a@) {17912,@) {11r53r@) 1223A,Nl t3J0t,0o0) (1A,O0o) {13,151,000) {12,09,0@) l2aro6,ooo) {3,606,000} 03175,601 {12J54,@0) {25169,60} 13,71a,m) {85.mol u9J54,0OO) ltl,341@0) {25,219,@0) (3,825,000) 1139.@01( I53,399,rxl0) 65,892.@) (58,1{!,mO} 160,618,r'@l (52,890,000) 3/L6/20L6 aaao OOaoa General Fund Forecast (Summary)aaa 2ott16 2ot -rt 207Ct:l ,or*20 202027 Tot l R.v.n!.r Tor.lErD.ndnuG lar,z,t.rrrl OD@rht Re64 lS,7O737a i6nrt6rn lq/t) 11286,2121 C.pid n6.El& RepLc. l5Jo0,0oo) o.tr s.Pk. 16,1.4,7311 ch !e h tund 8.r-e _:_:g_ 355,233,0 S 68,3as,000 S 971,103,06 S ,3,4 lr!,:r!,e.odrl l'5r9,r@t l5r,l.t,rml 160,518,0@l l6tr$,ml 12189,000 12,493,eO 10120,0@ !0,42s,0@ 10,.26@ (1,2{3,000) o,324mo} (1,90O,00O) {1,996,000) (2,105,000) (3p@,00o) (3,0oo,m0) (3,000,0@) 13.000,000) (!,000,000) (5rr547) (s,3a1r5) (2,753.2.91 12.n1,7391 12,792,.n1 s 2r?3,a5, I 2)t7,asa 5 ,,156,751 5 2.5s1.261 I !,52r,523 77 Forecast (Summarv) 202G2' Recommendations aaaaoaa aaa. o Resolution to Amend the FY 201 5-16 Operating and Capital Budgets to Reflect Mid-year Adjustments o Resolution to transfer an additional $5 million to the Capital Projects Fund Renewal and Replacement Reserve Questions & Comments? 3/L6/2A76 18 aaaaaoa aaao STAFF REPORT AGENDA NO: 6b To:Honorable Mayor and City Council Date: March 16,2016 From: Syed Murtuza, Director of Public Works - (650) 558-7230 MEETING DATE: March '16.2016 Review of Draft FY 2016-17 General Fund, Gas Tax, Measure A, and Measure M Funds Capital lmprovement Program (ClP) Subject: Staff recommends that the City Council review the proposed draft General Fund, Gas Tax, Measure A, and Measure M Funds CIP and provide feedback. Historically, staff has presented the City Council with a draft of the proposed General Fund CIP as part of the mid-year budget update study session in order to receive Council feedback with sufficient time to incorporate any changes priorto the adoption ofthe budget. The proposed draft CIP includes General Fund projects, Gas Tax, and Measure A funded projects. GENERAL FUND PROJECTS: ln developing the FY 2016-17 ClP, staff conducted a needs assessment of various infrastructure owned by the City and identified a total of $4,485,000 of improvements under the General Fund CIP as follows: Sidewalk R eoair Prooram and ADA (Americans with Disabilitv Act) Ramps lm orovements ($600,000) Staff is proposing a total of $1,575,000 for the following Parks and Recreation improvements projects: 1 RECOMMENDATION BACKGROUND DISCUSSION The City maintains approximately 1 16 miles of sidewalk and has an eslimated $1 0-$1 5M backlog of sidewalk and ADA-related work. Staff is proposing $500,000 to address sidewalk tripping hazards in several areas throughout the City. ln addition, staff is proposing $100,000 to upgrade intersection curb ramps at several locations throughout the City to comply with Americans with Disability Act standards. Parks and Recrealion lmprovements ($1.575.000) Review of Dratt FY 2016-17 Genercl Fund, Gas Tax, Measurc A and lll Funds CIP Murray Field Synthetic Turf/Grass: Murray soccer field is in dire need of a renovation. This will be the first renovation since the field was installed in 2000. The current irrigation system is undersized and does not adequately water the field. The drought, in combination with the irrigation, has led to a surface that is bare, patchy and uneven, which leaves a less-than-ideal playing surface. Staff has tried to repair the worst areas, but a complete renovation is required. lnstallation of a synthetic turf (non-rubber) will allow for year-round play and a reduction in water usage. Depending on the infill used for the synthetic turf (such as coconul husks), some water may be required. However, the use of water will be significantly less than that needed for natural grass. Calculations are being done to determine the estimated water savings. The estimated cost for the design development and preparation of construction documents is approximately $500,000. Upon completion of the design development, staff will return to the City Council to seek approval of construction ofthe project. Ray Park Playground: The playground facility at Ray Park was constructed in the late 1990's. The playground does not meet current safety standards and needs to be upgraded. staff is in the process of project design development. The estimated construction cost of this project is approximately $350,000. Southern Pacific (S.P.) Circle Plaza lmprovements: This project, which involves construction of a plaza in front of the Burlingame Avenue Train Station, was partially funded in FY 2015- 16. The design concept has now been completed. The next phase of the project is to develop engineering design and conslruction documents, which is estimated to cost approximately $2OO,OOO. After completion of the design and construction documents, staff will return to the City Council to seek approval for construction in FY 20'17-18. Athletic Fields Complete Renovations: The athletic fields throughout the city are in need of complete renovation due to age, overuse, and water restrictions. These include Washington Park, Ray Park and Village Park. staff has prioritized washington Park and Ray Park fields for the next fiscal year, and estimates the cost of work to be approximately $200,000. Staff will return to the City Council in the next fiscal year to request funding to renovate other facilities. Victoria Park Reconstruction Design: Staff is in the process of developing engineering design for a new Storm Water Pump Station at Victoria Park to address the flood proteclion needs in the area. The construction of a new pump station will require Victoria Park to be reconstructed. Staff is requesting $100,000 to develop engineering design for the park as part of the FY 2016-17 work program. Staff will return to the city council in FY 2017-18 to seek approval for construction of the new improvements. playground Resurfacing: Many of the city's playgrounds have resilient surfacing that is in need of repair or replacemenl. Staff has developed an annual surfacing program to address the playground needs. Staff has ranked the priority of repair/replacement based on severity of the problems, and is requesting $60,000 in FY 2016-17 to perform the work on cuernavaca, Pershing, and washington playgrounds and replace the surfacing at Trenton playground. 2 March 16,2016 March 16,2016 Parks Fencing Repairs: Much of the fencing in city parks is original fencing, and it is in need of replacement due to rust, broken fencing, and mis-aligned fencing. Staff is planning to address the fencing needs throughout all Parks facilities on an ongoing annual basis, and is requesting $60,000 for the FY 2016-17 budget. Playground Replacement Fund and Annual Tree Replacement: staff is requesting the creation of a Playground Replacement Fund to help minimize large one{ime costs for each playground. Staff has completed an assessment of all city playgrounds and ranked them by amount of usage, the age of the equipment, the type and amount of accessibility deficiencies, and safety concerns. With this information, staff recommends that a systematic replacement of playgrounds should be implemented over the next five years, at an annual cost of approximately $5O,OOO. Additionally, the Annual Tree Replacement Program continues to be a high priority in order to maintain the urban forest. The estimated cost of the Annual Tree Replacement Program is approximately $5,000. The total requested funding for both programs is $55,000. parks lrrigation System Upgrade: Staff has been systematically installing a centralized water wise irrigation system to replace the existing less water efficient water controllers throughout the Parks system. The project includes installing flow meters that can shut down automatically or remotely if abnormal water usage is detected. The estimated cost for complete installation throughout the city is approximately $380,000. Staff is requesting $5O,OOO on an annual basis in a phased approach to complete the proiect. The amount requested is based on the capacity of staff to complete each phase of the project on an annual basis. The City owns and maintains 20 building facilities with over 200,000 square feet of office space. Many of the building facilities and associated components are aging and need upgrades Timely maintenance will extend the life of the facilities. Staff is proposing a total of $1,350,000 for the following building facilities improvements projects: Police Station Fuel Tank Removal and Replacement: The Police Station fuel tanks are approximately 32 years old and have reached their originally intended service life. Taking a proactive approach will allow up to two years to remove both tanks in a non-emergency condition. However, a Notice of Violation from regulatory authorities will only allow for aS little as 90 days by law to remove both tanks and address the potentially contaminated soil. Staff is requesting $5oo,ooo to develop engineering plans and construction documents for the removal and replacement of these tanks. upon completion of the engineering design, staff will return to the City Council to seek approval for the construction of the proiect' Buildi Facilities lm ments ($1,3 50,000) Energy Efficiency Upgrades: staff recently completed an Energy Efficiency study for city facilities funded in part by a grant from the california Energy commission. Replacement of lighting fixtures was identified as one of the top priorities for conserving energy. staff is recommending budgeting $3O0,OOO in FY 201 6-17 to undertake the lighting fixture replacements to improve energy efficiencies in building facilities' 3 Review of Dnft FY 2016-17 General Fund, Cas Tax, Measurc A and M Funds CIP Review of Dnft FY 2016-17 General Fund, Gas Tax, Measure A and M Funds CIP March 16,2016 Parking Lots Resurfacing: The Cily Hall, Recreation Center, Corporation Yard and Police Station parking lot surfacing is deteriorated and has surface failures with cracks. Resurfacing the parking lots in a timely manner will help avoid a more costly replacement. The estimated cost for this project is approximately $250,000. General Facilities Upgrades: With the exception of the Main Library and the Corporation Yard buildings, most of the City's building facilities are approximately 32 to 67 years old, and have not had any major upgrades since their original construction. Many components of the building systems have served their intended design life and need to be upgraded. Staff is in the process of performing a condition assessment study of all buildings and developing a master plan of improvements to maintain these buildings in a good condition, in order to continue providing services to the community. The master plan is expected to be completed by fall 2016. Staff recommends setting aside a minimum of $100,000 to undertake projects in the next flscal year based on recommendations in the master plan. Facilities ADA lmprovements: This is a multi-year program to address the ADA improvements identified in the Assessment Study. The work identified in next year's program consists of improving the reception work station areas and counters at the Public works corporation Yard to be compliant with AOA. The work also includes improvements to disabled parking spaces at the facility to bring them into compliance with ADA. Staff is recommending $50,000 in the next fiscal year's budget for this effort. Stormwaler Pollution Prevention Plan for Facilities: State law requires that the Public Works Corp Yard and Parks Yard facilities have Stormwater Pollution Prevention Plans in order to be compliant with Water Quality regulations. Staff is recommending $50,000 in the next flscal year's budget to prepare Stormwater Pollution Prevention Plans for these facilities- Community Development Department Remodeling: The interior, non-structural partition wall between the Planning Division offices and the Building Division offices needs to be removed to create an open floor plan to improve space efficiencies. The existing public counter will be reconfigured for improved functionality. Further, the present configuration of the Community Development Department segregates the Planning Division from the Building Division in a manner that impedes the efficient collaboration of the work between the two divisions. A more equitable and efficient space plan is needed to meet the needs of the department. The estimated cost for this project is approximately $100,000. Staff recommends a budget of $5O,OOO from the General Fund and $50,000 from the Building Enterprise Fund. Washington Park Grandstand Remodeling: The existing restroom facilities associated with the grandstand in Washington Park are inadequate. Staff recommends conducting a feasibility Study to determine the scope of the restroom remodel, current cOde requirements based on the capacity of the grandstand, and necessary modifications. The estimated cost for an engineering feasibility study is approximately $50,000. 4 Review of Draft FY 2016-17 General Fund, Gas fax, Measure A and M Funds CIP March 16,2016 Staff is proposing the following traffic safety improvements projects: Oak Grove Avenue and Carolan Avenue lntersection Traffic Signal lmprovements: The four- way intersection of Oak Grove Ave. and Carolan Ave. is currently controlled by stop signs in three approaches. Traffic from northbound California Dr. has a free right-of-way into the intersection, which creates confusion for the other three approaches. During certain times of the day, the intersection is congested with traffic on Carolan Ave., either from Broadway commute traffic or traffic from Burlingame High School, which further exacerbates the situation. The project consists of performing an engineering analysis, developing design, and construction of a new traffic signal at this intersection to improve safety and help regulate traffic flow. The estimated cost for the design development and construction is approximately $500,000. City Hall Area Trafflc and Pedestrian Safety lmprovements: Staff is currently in the process of performing traffic studies in the City Hall area to determine appropriate improvements to address traffic speeding and pedestrian safety needs. The study is anticipated to be completed later this year. Staff is recommending setting aside approximately $200,000 to construct necessary improvements to address the traffic calming and pedestrian safety improvements as may be identified in the study. El Camino Real Stakeholder Process: Based on the City Council's direction regarding the Memorandum of Understanding with Caltrans relative to the El Camino ReauFloribunda Avenue lntersection Project, staff will be setting up a stakeholder process to review, explore and identify mutually agreeable solutions to address the El Camino Real Corridor issues. Staff anticipates that an outside consultant is needed to manage and facilitate the process, and is recommending a preliminary budget of approximately $100,000 for consultant services in this regard. Annual Traffic Studies: This is an annual program that addresses the ongoing need for specific traffic analyses that typically arises throughout the city over the course of the fiscal year, These studies are generally small in scale, and are designed to collect very specific data over short, finite durations. The studies may include traffic volume counts, turning movement analyses, vehicle speed surveys, or other "spot" studies required at specific locations. Staff recommends a budget of approximately $100,000 to address this need. Over the last several years, the City Council has funded the Police Station Antenna Upgrade Project in a gradual and phased approach. Staff is requesting a budget of $60,000 to complete the project in the next fiscal year. This will be the flnal project phase. The completed project will help improve the dispatch center communication system efficiencies. Traffic Safetv lmprovements ($900.000) Police Stat,on Antenna Proiect ($60.000) Review of Oraft FY 2016-17 Genenl Fund, Gas Tax, lleasure A and M Funds CIP March 16,2016 GAS TAX, MEASURE A AND MEASURE M FUNDED PROJECTS: Based on a condition assessment of street infrastructure, staff is proposing a total of $2,700,000 from a combination of Gas Tax, Measure A Funds and Measure M Funds for the next fiscal year's street improvements program as follows: FY 2016-17 Annual Street Resurfacinq Proqram ($2,500,000) The City owns and maintains approximately 84 miles of streets valued at approximately $80M. The backlog of work for street maintenance is estimated at $19M. Based on the streets assessment conditions and pavement management program recommendations, staff is proposing the following high priority streets be resurfaced as part of the Annual Street Resurfacing Program: El Camino Real frontage Rd., Clarendon Rd., Laguna Ave., Maple Ave., Ogden Ave., Paloma Ave., Park Rd., Sanchez Ave., Sebastian Ave., Sequoia Ave., Vernon Way, Peninsula Ave., and Bayshore Highway. Additionally, the program includes funding for the resurfacing of Carolan Ave. as part of the Complete Streets lmprovements Project, and Street Monuments Restoration Master Plan. The City owns and maintains approximately 116 miles of curb and gutter. Similar to the sidewalk conditions, several segments of curb and gutter facilities are deteriorated and need to be replaced to address public health and safety concerns. Staff is recommending $200,000 to replace curb and gutter in the critical areas citywide as part of the annual program. SETTING ASIDE FUNDS (IF FEASIBLE} FOR OTHER PROJECTS: The City Council may wish to consider setting aside funds from available unassigned fund balances and future revenue towards addressing the following needs: Though the Cily Council continues to fund the sidewalk and ADA program needs on a regular basis as part of the 50/50 Sidewalk Program, there continues to be a significant backlog of work related to sidewalks due to aging infrastructure and tree-related problems. Staff eslimates the backlog to range from approximately $10M to $15M. Hoover School Area Sidewalk lmprovements The preliminary study conducted by staff earlier this year indicated that approximately $3.2M would be needed to address pedestrian safety improvements near Hoover School. Staff will be undertaking a feasibility study that will provide more information regarding the project scope and costs to address the needs. 6 Annual Citywide Curb and Gutter Reolacement Proqram ($200,000) Sidewalk and ADA lmprovements March 16, 2016 The majority of the City's building facilities has served their original intended design life, and need major improvements. Though the City Council regularly invests in building maintenance, major building components are overdue for replacement. Some of these are being included in the CIP program. Staff is in the process of preparing a master plan to identify and prioritize building improvements of all facilities to undertake projects as funding becomes available. The Broadway Grade Separation Project is in the proiect study report (PSR) phase at this time. The preliminary project cost is estimated at approximately $240M. Upon completion of the PSR phase, staff will explore opportunities to obtain external funding to advance the project into the design and environmental phase. Staff believes that, as the project advances towards the construction phase, the City will be required to provide a local match towards the construction. Though it is very preliminary at this time, staff estimates that a local match may range from $15M to $20M. The City Council may wish to set aside funds towards this goal, which would significantly help the City to advocate and leverage funding from outside agencies. The proposed General Fund CIP budget for FY 2016-17 is $4,485,000. However, the projected funding from the 2% Transient Occupancy Tax (TOT) is estimated at approximately $4,300,000. The City Council may wish to fund all the projects listed by utilizing additional monies from the General Fund's unassigned fund balance or provide other direction. Exhibits: . Draft FY2O16-17 General Fund CIP Spreadsheet o PowerPointPresentation 7 Review of Draft FY 2016-17 General Fund, Gas Tax, Measurc A and M Funds CIP Buildino Facilities lmprovements Broadwav Grade Separation FISCAL IMPACT a t ts = E ! ::3 ! !9 E E; :;t E€Iii; :i !i-Eia[15iii:s ;32 EeEl i'Et"i it E a E I i !: EI : ! E 3 : l: . E : i I : g gE ;I i i r I ; E5 i a Ei EE i :: E E ! E""E "iibBa B! I r it d:B:i!i EiI;Ti Ti E.E a a 888898e3 tg3888833S3 ,Lt5! 83 EEII t1 883838 BS 88 8 I 88888838888f8B33Bg8 3 ! a E t E g^F <5 ll i aigi ! c ET !i EEEE! t; EI .ET al € 1 ii Ei Tir5EF 5i E ! E i !! ! !. 3E 3i .E: E!-.: =:t { BE,iE:igi;iiEt B"r?Eic'Enri;li!lt -, 1! ! i!tgi$r5 ! c c c .!'::4i - ;gl i.5 E:E ;:! a:!F-Et!!EEEii!?SitgiliEE:-:!;iE!:i ! ! o i i E; i:i.d E ! -a: it " EE8 It]------__=___i-- s 6r .. 6 EI EI =l ;t el ol i !3 E a € I = 3t11t2016 \ . CityCfficil Mid-Year Budget Study Session Egra$FY2(J ! I f,Aar€@19 Overview . Generat Fund Projects . Gas Tax & Measure A & M Projects . Summary . Council Feedback & Direction 1 -I \ \ eF.;w \\ 311112016 FY 2016-17 General Funds GIP . Total recommended for General Fund CIP funding is $4.485M . Approximately $4.3M in 2% TOT is projected for the next fiscal year . Council may authorize additional funds from the Genera! Fund's unassigned fund balance or give other direction Sidewalk Program $7M - S11M estimated backlog Recommend $500k for next lrear City maintain '116 miles of sidewalks valued at 20M ft 2 \\ \ :- \ ,t -'t t t_ a 311112016 ADA Curb Ramps $4M of estimated backlog I t,ZAO ramps needed citywide Recommend $100k to install 25-30 ramps in high use areasI Location Map of Sidewalk Program & ADA Gurb Ramps 3 \ / I T \ \ ,".;k.$'b*"% *{oo."d ""*-""-, o-c 3t11t2016 Parks & Recreation Projects Athletic Fields Renovation (Cib/wide Parks) $500 $350 $200 $200 $100 $60 $60 $55 $50 $1,575 S.P Circle Plaza lmprovements Mctoria Park Reconstruction Design Playground Resurfacing Parks Fencing Repairs Playground Replacement & Trees lnigation Systems Upgrades Total Recommended: Projects Recommendations Munay Field Synthetic Turf Ray Park Playground Parks & Recreation Projects NTuDrrLlVJXD 4 :t-?I I 1 Building Facilities Projects . City maintains 20 buildings with over 200,000 sq. ft. . Timely maintenance extends life of building facilities . Recommend $1,350,000 annual program Building Facilities Projects Police Station Fuel Tank Removal and Replacement General Facilities Upgrade per Master Plan Community Development Department Remodeling Washington Park Grandstand Remodeling Energy Efficiency Upgrades $100 ADA lmprovements Stormwater Pollution Prevention Plan Total Recommended:st,350 Projects $250 $50 $s0 $50 $50 Hall Rec Parking Lots Resurf acing Recommendations $500 $300 Yard & Police Station) R 3t11t2016 \l i \ ^ -...r. ! ,1i -aEra \ ji--l --l r-- Lillfu$car, L I; 4tr . I -.tS+= ! Ar 311112016 Building Facilities Projects ,r\ E-t End-qulgi- I a TI E I .U o \\ a \ -1 L] E:.- L-)lo ) aa a. t.iil Building Facilities Projects it I FA \ ItSrL-F q G4L 311112016 El Camino Real Stakeholder Process Traffc Studies (Annual Program) Total Recommended: Projects $500 $900 !I Oak Grove Ave./Carolan Ave. Traffic Signal City HallArea Traffic & Pedeslrian Safety Recommendations $200 $100 $100 Equipment/Radio Anten na Police Station Antenna Upgrade . Estimated Cost is $60k (final phase) 7 Traffic Safety lmprovements I t I \ 3t11t2016 Gas Tax, Measure A & M Funded Projects City maintains 84 miles of streets valued at $80M Estimated backlog is $19M Recommend a total of $2.7M for Streets lmprovements Program The tollowing pIoiects are recommended: Recodtm€ndAions t2,700 $2,500 $200 Total Recommended O Annual Street Resurfacing Program - A Camino R€al Fro.'iage Rd., Carclan Av€., Clar€ndon Ave., Lagunaave., kurel Ave., MapleAv€., Ogdon Ave-, PalorB Ave., Pafi Rd.. Sanchez ave., Sebastan Av€-, Sequda Av€., V€ho. ave.. Pe.insula Ave. and Bat€nore High*ay. O Street ftronuments Res{oration Program O Citywide Street Curb and Gutter Replacement Program c'DlaiaE ch4hAtqE =ifu ,t'd'. jral B ,m,Tax !08AIFUI0S LOCATNETOS MEASURE A Location Map of FY 2016-17 Street Resurfacing Program .f 311112016 ADA Curb Ramps Parks and Recreation Poects Building Facilities Projects Traff c Safety lmprovements Equipment - P.D. Radio Antenna Poect Projectr Recommendations $4,,t85 Sidewalk Repair Program $s00 $100 $1,575 $r,350 $900 $60 Consider Setting Aside Funds for Other Needs . Sidewalk and ADA lmprovements . Hoover SchoolArea Sidewalk lmprovements . Building Facilities lmprovements . Broadway Grade Separation I \Summary of Draft FY 2016-17 General Funds CIP Total: \ \ 3t11t2016 10 ' City C6uncil Feedback & Direction \ \