HomeMy WebLinkAboutAgenda Packet - CC - 2016.05.11BURLI NGAME
Gity of Burlingame BURLINGAME CITY HALL
501 PRIi,4ROSE ROAD
BURLINGAI\4E, CA 94010
Meeting Agenda - Final
City Council
wednesday, May 11,2016 6:30 PM Council Chambers
Budget Study Session
Note: Public comment is permitted on all action items as noted on the agenda below and in the
non-agenda public comment provided for in item 4.
Speakers are asked to till out a "requestto speak" card located on the table by the door and
hand it to staft, although the provision of a name, address or other identifying information is
optional. Speakers are limited to three minutes each; the Mayor may adiust the time limit in
light of the number of anticipated speakers.
All votes are unanirnous unless 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 public may speak about any item not on the agenda. Members of the public wishing to
suggest an item for a future Council agenda may do so during this public comment peiod. The Ralph M.
Brown Act (the State locat agency open meeting law) prohibits the City Council from acting on any matter
that is not on the agenda.
5. INTRODUGTORY REMARKS - Lisa Goldman, City Manager
6. STAFF REPORTS AND GOMMUNICATIONS (Public Comment)
a,Studv Session: Fiscal Year 2016-1 7 Budqet
Attachments: Staff Reoort
b Citv Council Review of Draft FY 20'1 6-'17 Caoital lmDrovement P rooram
Atlachfients:Staff Reoo(
March 16. 2016 Staff Reoort
Presentation
City ot Buningame Page 1 Pinted dn s/6no1c
7. ADJOURNMENT
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before the meeting and at the meeting. Visit the City's website at www.bufiingame.org. Agendas and
minutes are available at this site.
NEXT CITY COUNCIL MEETING - Next regular City Council Meeting - Monday, May'16,
2016
VIEW REGULAR COUNCIL MEETING ONLINE AT WWW.BURLINGAME.ORG - GO TO
'crw couNcrL vlDEos"
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agenda will be made available for public inspection at the Water Oftice counter at City Ha at 501
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Printecl on 5/4,2016
City Council Meeting Agenda - Final May 11, 2016
AGENDANO: 6b
To:Honorable Mayor and City Council
Date: May'll, 2016
From: Syed Murtuza, Director of Public Works - (650) 558'7230
Subject: City Council Review of Draft FY 2016.'17 Gapital lmprovement Program
On March 16, 2016, staff 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.
The presentation included General Fund projects as well as Gas Tax and Measure A-funded
projects.
This is a follow-up review of the overall draft FY 2016-17 CIP and includes Water Enterprise,
Sewer Enterprise and Storm Drainage projects as well as any changes made to the draft General
Fund CIP previously reviewed by the City Council.
At the March 16, 2016 Study Session, the City Council directed staff to add $200,000 to the CIP
for additional ADA (Americans with Disability Act) improvements. Staff is currently working on the
Bayfront ADA lmprovements Project, which is close to being ready for bidding. The additional
funding will allow for all the identified work to be completed, thus addressing high priority ADA
needs.
Additionally, since the City Council Study Session in March 2016, preliminary design concepts
have been completed and more refined cost estimates have been developed for the Gateway
Signage Project. On May 4,2015, staff presented design concepts for Council feedback for the
design and installation of new gateway entry signs at the north and south City limits along El
Camino Real, State Route 82. Based on Council direction, RHAA (Royston, Hanamoto Alley &
Abey) was selected to further develop the design concepts to better reflect Burlingame's
character and architectural history. On July 6, 2015, after review of design options, the Council
selecled a traditional pillar monument that incorporates elements from the historic stone pillar,
STAFF REPORT
1
MEETING DATE: May 11, 2016
RECOMMENDATION
Staff recommends that the City Council review the proposed draft FY 201 6-17 Capital
lmprovement Program (ClP) and provide feedback.
BACKGROUND
DISCUSSION
City Council Review of Drafl FY 201617 Capital tmprovement Program May 11, 2016
circa 1912, and directed staff to finalize the design. Over the past several months, staff has been
working with Caltrans to obtain necessary approvals and permits and has coordinated final
design concepts with the Historical Society, Caltrans, and PG&E. The updated cost estimate to
complete the gateway monuments per City Council direction is $335,000, which includes
preparation of construction documents, bidding, construction, construction management, and
providing electrical service for lighting. The City Council had previously approved $120,000 for
the project, and cunently has approximately $75,000 remaining in the project account. Slaff is
requesting City Council direction on whether to proceed with the project as planned with the
updated cost estimate, or to hold off on the project and coordinate any future gateway monument
signage with an overall vision of El Camino Real as part of larger discussion in the future. Should
the City Council wish to proceed with the project, an additional $260,000 would be needed to
complete the installation of the gateway monuments.
Based on the condition assessment of City owned infrastructure systems and capital
improvements planning, staff is proposing a total of $19,635,000 in the CIP program for FY 2016-
17 as follows (Gateway Signage Prolect additional funding not included):
Estimated Cost
General Fund projects
Gas TaxlMeasures A & M Fund projects
Water System Enterprise Fund projects
Sewer System Enterprise Fund projects
Storm Drain System projects
Total:
$4,685,000
$2,700,000
$2,500,000
$4,700,000
$5,050,000
$19,635,000
A summary of all the projects is provided below
GENERAL FUND PROJECTS:
Staff has identifled a total of $4,685,000 of improvements under the General Fund CIP as follows
The City maintains approximately 1 16 miles of sidewalk and has an estimated $7-$1 1 M 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 the ADA
standards, as well as $200,000 for the Bayfront ADA lmprovements per the City Council direction
at the March 16, 2016 Study Session.
2
CIP Program
Sidewalk Repair Proqram and ADA Ramo lmprovements ($800.000)
Cily Council Review of Draft FY 2016-17 Capital lmprovement Program May 11, 2016
Staff is proposing a total of $1,575,000 for the following Parks and Recreation improvement
projects:
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{han-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 coconut
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 lhe City Council to seek approval of construction of the project.
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 ofthe project is to develop
engineering design and construction documents, which is estimated to cost approximately
$200,000. After completion of the design and construction documents, staff will return to the
City Council to seek approval for construction in FY 2017-18.
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 flood protection needs in the
area. The construction of a new pump station will require Victoria Park to be reconstructed.
Staff is requestinS $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.
3
Parks and Recreation lmprovements ($1.575.000)
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.
Athletic Fields Complete Renovations: Athletic fields throughout the city need to be
completely renovated 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.
City Council Review of Draft FY 2016-17 Capitat lmprovement Program May 11, 2016
Playground Resurfacing: Many of the City's playgrounds have resilient surfacing that is in
need of repair or replacement. Staff has developed an annual surfacing program to address
the playground needs and has ranked the priority of repair/replacement based on severity of
the problems. Staff 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.
Parks Fencing Repairs: Much of the fencing in City parks is original fencing and needs to be
replaced due to rust, broken fencing, and mis-aligned fencing. Staff plans to address the
fencing needs throughout all Parks facilities on an ongoing annual basis, and is requesting
$60,000 for the FY 2016-1 7 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 deflciencies,
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 $50,000. 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
$50,000 on an annual basis in a phased approach to complete the poect. The amount
requested is based on the capacity of staff to complete each phase of the project on an
annual basis.
Buildino Facilities lmo rovements ($1.350.000)
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 $500,000 to develop engineering plans and construction documents for the
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City Council Review ol Draft FY 2016-17 Capital lmprovemena Program May 11, 2016
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 project.
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
recommends budgeting $300,000 in FY 2016-17 to undertake the lighting fixture
replacements to improve energy efficiency in building facilities.
General Facilities Upgrades: With the exception of the Main Library and the Corporation Yard
buildings, most of the City's building facilities are approximately 32lo 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 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 fiscal 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 ADA. 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.
Stormwater Pollution Prevention Plan for Facilities: State law requires that the Public Works
Corporation 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 fiscal year's budget to prepare Stormwater Pollution Prevention PIans 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
5
Parking Lots Resurfacing: The parking lot surfaces at City Hall, the Recreation Center, the
Corporation Yard and the Police Station have deterioraled and have surface failures with
cracks. Resurfacing the parking lots in a timely manner will help avoid more costly
replacements. The estimated cost for this project is approximately $250,000. Staff will try to
address minor repairs to the Recreation Center parking lot, and will wait for the Council
direction regarding the new Community Center project prior to undertaking any major parking
lot reconstruction work.
City Council Review of Dnft FY 2016-17 Capital lmprovement Program May 11, 2016
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
$50,000 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. Per City Council direction, staff will
coordinate with facility user groups to obtain joint funding in order to do the project.
Traffi c Safety lmprovements ($900,000)
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 Avenue and Carolan Avenue is currently controlled by stop
signs in three approaches. Traffic from northbound California Drive 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 Avenue, 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 constructing 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 Traffic 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 RealiFloribunda
Avenue lntersection Project, staff is 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 $150,000 for consultant services in this
regard. Of this amount, $50,000 has already been set aside in the FY 2015-16 CIP for
improvements. on El Camino Real.
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
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City Council Review of Draft FY 2016-17 Capital lmprovemenl Program May 11, 2016
data over short, finite durations. The studies may include traffic volume counts, tum
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.
Police Station Antenna Ppiectl$60J001
Over the last several years, the City Council has funded the Police Station Antenna Upgrade
Projecl 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 final poect phase. The completed proiect will
help improve the dispatch center communication system efficiencies.
GAS TAX, MEASURE A AND MEASURE M FUND PROJECTS:
Based on a condition assessment of the street infrastructure and available funding, staff is
proposing a total of $2,700,000 from a combination of Gas Tax, Measure A and Measure M
Funds for next fiscal year's street improvements program as follows:
FY 2016-17 Annual Street Resurfacino 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 road, Clarendon Road, Laguna Avenue, Maple Avenue, Ogden Avenue,
Paloma Avenue, Sanchez Avenue, Sebastian Avenue, Sequoia Avenue and Peninsula Avenue,
Vernon Way, Park Road and Bayshore Highway. Additionally, the program includes funding for
the resurfacing of Carolan Avenue as part of the Complete Streets lmprovements Project, and
Street Monuments Restoration Master Plan.
WATER ENTERPRISE FUND PROJECTS:
The City owns and maintains over '100 miles of drinking water distribution system with five
storage reservoirs and several pump systems. Based on a condition assessment of the City's
Water System and prioritization of the Capital lmprovements Plan, staff recommends a total of
$2,500,000 of improvements to the City's drinking water system as follows:
South Rollins Road and Ne iohborhood Water Main lmp rovements. Phase 1 ($900.000)
This is Phase 'l of a large subdivision project for replacing a deteriorated and aging cast iron
water main with new PVC/ductile iron water main along Rollins Road. The water main project will
be combined with the Rollins Road Sewer Rehabilitation Project and constructed together to
reduce disruption to residents and to save money.
7
Annual Citwide Curb and Gutter Replacement Prooram ($200.000)
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 cityrvide as part of the annual program.
City Council Review of Drafa FY 2016-17 Capilal lmprovemenl Program
South Rollins Road and Neiqhborhood Water Main lmprovements, Phase 2 ($300,000)
This is Phase 2 of a large subdivision project for replacing a deteriorated and aging cast iron
water main with new Pvo/ductile iron water main along Burlingame Avenue between Rollins
Road and East Lane. This funding request is for undertaking the engineering design, preparation
of plans, specifications and cost estimate. Staff will retum to the City Council in the future to
request funding for the construction phase of the project.
Citwvide Larqe Water Meter Replacement Proqram, Phase 1($300,00!)
The City has completed the replacement of small water meters throughout the city. This is Phase
1 of a ten-year program to replace all the old large water meters in the city. The project will target
larger size water meters over one inch. The new metering system provides a high degree of
accurate meter readings and prevents water loss.
Emeroencv Water Ma in Reolacement ($1 00.000)
This poect sets aside emergency funds to address large water main breaks and unforeseen
conditions.
Laooon Bridoe 12" Diameter Wate r Main Studv and Desion ($50.000)
The 12" diameter water main under the lagoon pedestrian bridge located near Bayview Place is in
poor condition. The 12" diameter water main will be studied to determine options for rehabilitation
or removal. The study will determine the best alternative and associated costs. Upon completion
of the study, staff will return to the City Council as part of the following fiscal year's budget
process to request funding to undertake the poect.
I
May 11, 2016
El Camino Real Water Main Reolacement ($500,000)
This project consists of replacing a deteriorated and aging cast iron water main with new
PvC/ductile iron water main along El Camino Real between Broadway and Hillside Drive with
crossings at Ray Drive/Rosedale Avenue, and along Murchison Drive.
Miscellaneous Reservoir and Pumo Station lmorovements ($100.000)
This project consists of the relocation of the electrical chamber at Hillside Reservoir and the
removal of dirt on top of the reservoir; installation of a wash pad at the wastewater treatment plant
to be used by Water and Sewer vacuum trucks; and installation of a concrete generator pad at
the Donnelly Pump Station.
Citvwide Water Svstem Uni-Directional Flushino Prooram ($100.000)
ln order to maintain water quality and prevent potential contamination, the water system needs to
be regularly cleaned and flushed. ln light of the current drought conditions, staff is proposing to
update the Unidirectional Flushing Program to conserve water while maintaining the water quality
requirements. Development of a new flushing program requires updating the system with current
requirements and creation of flushing sequencing to account for system upgrades.
City Council Review of Draft FY 2016-17 Capital lmprovemenl Prognm May 11, 2016
Frontera Water Qualitv lmorovement Pro ect (s50.000)
The 24" diameter ductile iron water transmission line to Mills Tank was constructed in 2005. The
reduced flow through the 12" diameter transmission line to Mills Tank has inadvertently caused
potential water quality issues around Frontera Way. This project consists of cutting and capping
the oversized 12" transmission line to improve water quality to residents.
A and RTU's for SFPUC Tu
This project is for undertaking the design of Supervisory Control and Data Acquisition (SCADA)
and Remote Terminal Unit (RTU) systems at the City's water supply connections from SFPUC.
This budget will be used for the design of the system, which will allow remote monitoring of the
water system. Upon completion of the design, staff will return to the City Council in the future to
request funding for the construction phase of this project.
SEWER ENTERPRISE FUND PROJECTS:
The City owns and maintains over 100 miles of sanitary sewer collection system with several
pump stations and the Waste Water Treatment Plant. Based on a condition assessment of both
components of the waste water collection system and treatment plan as well as prioritization of
the Capital lmprovements Plan, staff is recommending a total of $4,700,000 improvements to the
City's sanitary sewer system as follows:
Easton Addition, Rav Park &Neiqhborhood Sewer Rehabilitation,Phase 1 ($1.680.000)
The project scope includes rehabilitating approximately 5,850 linear feet of sanitary sewer mains
within the Easton Addition No. 4, No. 5 and Ray Park Subdivisions. Other neighborhood projects
include the Skyline Boulevard easement area and 1209 Mills Avenue. These mains are over 100
years ofd and vary in diameter between 8" and 12".
on Addition Ra Park & Ne Rehabilitation Phase 2
The project scope includes rehabilitating approximately 5,000 linear feet of sanitary sewer mains
and is a continuation of the Easton Addition and Ray Park Subdivisions. Other neighborhood
projects include Park Road as well as other neighborhood projecls. These mains are over 100
years old and vary in diameter between 8" and 12".
Rollins Road Sewer Re habilitation between Channinq Road and Humboldt A venue ($500.000)
The project scope includes rehabilitating approximately 1,000 linear feet of sanitary sewer mains
along Rollins Road between Humboldt Avenue and Channing Road. These mains are under
sized and need to be upgraded to increase capacity; they vary in diameter between 8" and 10".
o
Reqional Water Supplv Studies/Modelinq ($50.000)
This budget is used for tasks performed such as long{erm water supply planning, water
conservation and drought response. ln addition, the water system model is updated with the
most current information to stay cunent with the water quality requirements.
CW Council Review of Draft FY 2016-17 Capital lmprovement Program May 11, 2016
Waste Water Treatment Plant Rehab ilitation. Phase 1 ($1 .1 70.000)
The Waste Water Treatment Plant Master Plan has identified over $22M in necessary
improvements, including near term (0-5 years), midterm (6 to 10 years), and longterm (11-15
years) plans. The FY 2016-20'17 CIP will include:
Additional detail studies for the Digester No. 1, interior assessment for Main Switchgear P-
1, condition assessment for Primary Effluent Bypass and Plant Return Pipes, and current
requirements per NFPA 70E ; and
lmplementation of near-term CIP projects identified in the Master Plan including
improvements to the Digester gas piping and mixing system replacement.
Miscellaneous Sewer Repairs a nd Sewer Root Formino ($50,000)
This is an annual program to rehabilitate sewer manholes and mains to control intrusion of tree
root infestation, which reduces capacity of the system and results in sewage backup. This project
will help alleviate capacity problems and minimize sewage backups.
STORM DRAINAGE FEE FUND PROJECTS:
ln the mid 2000's, a Condition Assessment Study of the 100 year old storm drainage system
identified $39M of critical projects to protect public health and safety. ln 2009, Burlingame
property owners approved a ballot measure to upgrade the aging and deteriorated storm
drainage system, to provide 3O-year design storm capacity and address localized flooding
problems citpvide. Since the passage of the measure, approximately $21M of improvements
have been completed. The completed projects include the Easton Creek lmprovements, Marsten
Pump Station, Marsten Outfall Channel, Laguna storm drainage culvert, Burlingame Creek
bypass stub at Safeway, Burlingame Avenue lmprovements, Terrace Creek Capacity, and
projects to address localized flooding problems at 77 locations city\ /ide under the Neighborhood
Storm Drain lmprovements. Current major projects being worked on include the Rollins Road
Pump Station and the Rollins Road/US Highway 101 crossing, which have been funded in prior
years. For FY 2016-17, staff is recommending $5,050,000 for the following Storm Drainage
Projects as follows:
El Portal. Trousdale. Gilbreth lmorovements Proiect ($900.000)
This p@ect consists of repairing concrete liner channels within the El Portal/Trousdale watershed
area. These channels have cracked and buckled over years of deterioration, and need to be
repaired in order to prevent flooding, and maintain normal flow of storm water to the Bay.
10
Mitten Force Main & Pumo Station lmorovements ($300.000)
This project involves installing a new force main from the Mitten Pump Station underneath U.S.
Hwy 101 connecting to the Adrian Road force main to replace an existing deteriorated force main.
Roltins Area Collection Svstem ($2.900.000)
The project consists of a storm drain collection system for the Rollins Road neighborhood that will
tie-in to the storm pump station at Victoria Park that will discharge to the Bay. The project is
currently under engineering design phase.
City Council Reyiew of Draft FY 2016-17 Capital lmprovement Program May 11, 2016
Neiqhborhood Area Storm Drain Proiect No.9 ($700,000)
This project is a continuation of neighborhood drainage improvements throughout the city that
have been ranked by priority based on the severity and magnitude of the drainage issues. The
proposed improvements are primarily in the residential areas, and will alleviate local area flooding
and ponding water, and increase the storm drainage capacity of the system.
Flap Gates on Sanchez Laqoon Proiect ($500,000)
This project involves the design and replacement of nine storm water flap gates (tide control
valves) that vary in size from 12-inch to 96-inch in diameter. These flap gates prevent bay water
from entering the storm drain culverts and inundating the low lying areas along Rollins Road
during high-tide events.
Proqram Manaqement ($50,000)
These funds will be used for staff augmentation for specialty services that require professional
consultants during various phases of a project.
FISCAL IMPACT
The estimated total funding identified to undertake the projects discussed in the staff report is
approximately $19,635,000. The funding sources include General Fund, Gas Tax, Measure A and
M Funds, Water Enterprise Fund, Sewer Enterprise Fund and the Storm Drain Fee as outlined in
the staff report.
Exhibits:
. March '15, 2016 Staff Report
. PowerPoint Presentation of Draft FY 2016-1 7 Capital lmprovements Program
11
AGENDA NO
MEETING DATE: N4arch 16,2016
To:Honorable Mayor and City Council
Date: March 16,2016
From: Syed Murtuza, Director of Public Works - (650) 558-7230
Staff recommends that the City Council review the proposed draft General Fund, Gas Tax,
Measure A, and Measure M Funds CIP and provide feedback.
BACKGROUND
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 prior to the adoption of the budget. The proposed draft
CIP includes General Fund projects, Gas Tax, and Measure A funded 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:
Staff is proposing a total of $1,575,000 for the following Parks and Recreation improvements
projects:
STAFF REPORT
Subject: Review of Draft FY 2016-17 General Fund, Gas Tax, Measure A, and
Measure M Funds Capital lmprovement Program (ClP)
RECOMMENDATION
DISCUSSION
GENERAL FUND PROJECTS:
Sidewalk Reoair Proqram and ADA (Americans with Disabilitv Act) Ramps lmorovements
($600.000)
The City maintains approximately 116 miles of sidewalk and has an estimated $10-$15M 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 Recreation lmorovements ($1.575.000)
1
Review of Draft FY 2016-17 General Fund, Gas fax, Measurc A and M Funds CIP March 16, 2016
Murray Field Synthetic Turf/Grass: Munay soccer field is in dire need of a renovation. This
will be the first renovation since the field was installed in 2000. The current inigation 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{han-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 coconut
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 of the poect.
Ray Park Playground: The playground facility at Ray Park was conslructed 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 ofthe project is to develop
engineering design and construction documents, which is estimated to cost approximately
$200,000. After completion of the design and construction documents, staff will return to the
City Council to seek approval for construction in FY 2017-18.
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 cosl 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 protection 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 lo
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 replacement. 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 lhe surfacing at Trenton
playground.
2
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 20"16-1 7 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
amounl of usage, the age of the equipment, the Vpe 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 $50,000. 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
$50,000 on an annual basis in a phased approach to complete the project. The amount
requested is based on the capacity of staff to complete each phase of the project on an
annual basis.
Buildinq Facilities lmprovements ($1,350,000)
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 yearc 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 $500,000 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 p@ect.
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 $300,000 in FY 2016-17 to undertake the lighting fixture
replacements to improve energy efficiencies in building facilities.
3
Review of Draft Fy 2016-17 General Fund, Gas Tax, Measure A and M Funds CIP
Review of Draft FY 2015-17 General Fund, Gas Tax, Measurc A and M Funds CIP March 16, 2016
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 p@ects in
the next fiscal year based on recommendations in the master plan.
Facilities ADA Improvements: 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 ADA. 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 nen fiscal year's budget for this effort.
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
$50,000 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 conducling 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
Parking Lots Resurfacing: The City 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.
Stormwater 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 fiscal
year's budget to prepare Stormwater Pollution Prevention Plans for these facilities.
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 righlof-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 Traffic and Pedestrian Safety lmprovements: Staff is cunently 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 Real/Floribunda
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.
Police Station Anten na Proiect ($60.000)
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 final poect phase. The completed project will
help improve the dispatch center communication system efficiencies.
5
Traffic Safetv lmorovements ($900.000)
March 16, 2016
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:
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 Slreet Monuments Restoration
Master Plan.
Annual Citywide Curb and Gutter R eplacement Proqram ($200,000)
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 AS|DE FUNOS (tF FEASTBLE) 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:
Sidewalk and ADA lmprovements
Though the City 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 estimates the
backlog to range from approximately $10M to $15M.
Hoover School Area Sid ewalk 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.
o
Review of Drcft Fy 2016-17 General Fund, Gas Tax, Measure A and M Funds CIP
GAS TAX, MEASURE A ANO MEASURE M FUNDED PROJECTS:
FY 2016-17 Annual Street Resurfacino Prooram ($2.500.000)
March 16, 2016
The Broadway Grade Separation Project is in the project 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 pro.iect 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 oulside agencies.
FISCAL IMPACT
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 FY2016-17 General Fund CIP Spreadsheet
. PowerPointPresentation
7
Review of Draft FY 2016-17 Genenl Fund, Gas Tax, Measure A and M Funds CIP
Buildino Facilities lmprovements
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.
Broadwav Grade Seoaration
Draft FY 2016-17
Capital Improvement
Program
I
A t
City Council Budget Study Session
May 11, 2016
Overview
L
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o General Fund Projects
o Gas Tax and Measures A & M Projects
o Water & Sewer System Enterprise Funds
Projects
o Storm Drainage Projects
o Council Feedback & Direction
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Proposed FY 2016-17
General Funds GIP
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Sidewalk Repair Program
ADA lmprovements & Curb Ramps
Parks and Recreation Projects
Building Facilities Projects
Traffi c Safety lmprovements
Equipment - PD. Radio Antenna Project
s500
s300
$1,575
$l,3s0
$900
$60
Proiects
Total Recommended
$260?Gateway Signage
Recommendations
Sidewalk Program
City maintain 1'16
miles of sidewalks
valued at 20M
s7M - $11M
estimated backlog
Recommend $500k
for next year
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ADA Gurb Ramps
.l: . $4M of estimated backlog
1,280 ramps needed citywide
Recommend $100k to install 25-30
ramps in high use areas
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Location Map of Sidewalk
Program, ADA lmprovements
and Gurb Ram S
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Recommend $200k for BayfrontADA
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Parks & Recreation
Projects
Murray Field Synthetic Turf
#
$50
Ray Park Playground $3s0
S.P Circle Plaza lmprovements $200
Athletic Fields Renovation (Citywide Parks)$200
Victoria Park Reconstruction Desi qn $100
Playground Resurfacing $60
Parks Fencing Repairs $60
Playground Replacement & Trees $ss
lnigation Systems Upgrades S5o
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RecommendationsProjects
Total Recommended $1,575
Building Facilities
Projects
Police Station Fuel Tank Removal and Replacement $s00
ergy Efficiency Upgrades $300
Parking Lots Resurfacing
(CiW Hall, Rec Center, Com Yard & Police Station)$250
General Facilities Upgrade per Master Plan $100
lmprovements $50
rmwater Pollution Prevention Plan $s0
Community Development Department Remodeling ss0
Washington Park Grandstand Remodelang $s0
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Proiects
Total Recommended $'r,350
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Traffic & Pedestrian Safety
lmprovements
$50lmments
Oak Grove Ave./Carolan Ave. Traffic Signal
City Hall Area Traffic & Pedestdan Safety
lmDrovemenll $200
El Camino Real Stakeholder Process $100
Traffic Studies (Annual Program)$100
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Total Recommended 900$
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EquipmenURadio Anten na
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enna upgrade
. Estimated Cost is
$60k (final phase)
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Gateway Signage Project
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Preliminary design concept completed for new gateway entry
signs at the north and south City limits along El Camino Real
Council selected a traditional pillar monument design,
incorporating elements of historic stone pillar, circa 1912
Coordinated final design concepts with Historical Societv,
Planning Department, Caltrans, and PG&E
Estimated total project cost is $335,000, which includes:
c Preparation of construction documenls
. Bidding, construction, construction management, inspections,
and electrical service for lightinq
Council approved $120,000 for project, current remaining budget
is approximately $75,000
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at Murchison Drive
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El Camino Real
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5
ptions for Gateway
Signage Project
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1. Proceed with project as planned
with approval of additional
$260,000 to complete
installation of gateway
monuments
2. Hold off on project and
coordinate gateway monuments
with future overall vision of El
Camino Real
Ir
Gas Tax, Measure A & M
Funded Projects
O AnnualStre€t R€surfacing Program -
Baysho.e Highway. EI Camioo Reat Frortage Rd..
Carclan Avs.. Clarcndon Rd.. Lsgu.a Ave.. La!rcI Av€.,
MaplsA!€, Ogds Avo, PdoDAv€., Pad Ro .
S€trcheAv€., S€bastian t,.., SequdaAlrc.. VerlM
Way.. PeninsulaAve. and Eayshoro HiOhway.
O Streel l\Ionoments Restoration Pogram
O Catywide Street Curb and cutter Reptacement
Program
$2,500
s200
I
City maintains 84 miles of streets valued at $8OM
Estimated backlog is $19M
Recommend a total of $2.7M for Streets lmprovements
Program
Recommendations
Total Recommended s2,700
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The tollowing projecls are recommended:
MEASURE A
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Map of FY 2016-17
Street Resurfacing Program
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o Studies were performed to assess the 105 mile water system
o CIP master plan prioritized over $120M of improvements
o Council approved rate increases to fund accelerated improvements
through issuances of bonds
o $38.5M of work is completed
c Replaced 22 miles of old deteriorated transmission and
distribution pipeline
o 1,600 water services installed
c 1200 linear feet of fire services rehabilitated
o Well Water Distribution at Washington Well completed
o $87.5M backlog of work still remains
a
$900
$300
$500
s300
s100
$100
$100
$s0
150
sso
$s0
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Water System Capital
lmprovement Programr
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FY 2016-17 Water System
Capital lmprovement Program
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Estimated CostsP.ojects
South Rollans Road and Naghborhood Water Main
lmprovements, Phase 1
South Rollins Road ard Neighborhood Water Majn
lmprovehents, Phase 2
E, Camino Reel Water Main Replacement
Ciryv/ide Large Weter Meter Replacement Program
(Phase 1)
Masc. Reservoir and Pump Stations lmp@vements
Emergency Water Main Replacemenl
Citywide Watersystem Unidlr€ctional Flushing Progr.m
Lagoon Bridge 1 2" Water Main Sludy & Oesjgn
Regional Water Supply SMie .rodolirE
Frontera Water Quality lmffovemenl Poect
SCADA and RTU s for SFPUC Turnod
52,500
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Gapital lmprovement Program Map
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Capital lmprovement Program
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o $94M backlog of work still remains
o Studies were performed to assess the 100 miles sewer system
o CIP Master Plan prioritized over $160M of improvements
o Council approved past rate increases to fund accelerated
improvements through issuances of bonds
o $66M of work completed
32 miles of pipeline replaced
, 2,500 private laterals replaced wilh cleanouts
. $'l M upgrades were done at the Waste Water Treatment plant to
meet slate requirements
FY 2016-17 Sanitary Sewer
System Capital lmprovement
Pro ram
Easton Addition. Ray Park and
Neighborhood lmprovements,
Phase I & 2
$2,680
$500
$1.170
$300
$50
Rollins Road Sewer Rehabilitation
Wastarat8r Treatrnent Plant
Phase 1 L,l,aste. Plan
lmprcvern€nts
Mitten Force Main and Pump
Station lmprovements
Misc. Sex/gr Repairs and Root
Foami E Proied
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Estimated
Projects Costs
Total Recommended $4,700
FY 2016-17 Sanitary Sewer System
Capital Improvement Projects Map
2016 Ci!4'de Se€ P'peline tieh.blritation
--- Rolrins Rd. s.{ei tuhabirhaton
a werai.T.ldtE{ PEn R.h.D. Pna!. I\
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Storm Drainage System
Capital lmprovements
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o City has 50 miles of storm drains, drainage channels and
pump stations.
o Conditions assessment of the 1 00 year old storm drainage
system identified $39M of key capital improvements to
protect public health and safety.
o ln 2009 - property owners approved a ballot measure to
upgrade the aging and deteriorated storm drainage system,
to provide 30 year design storm capacity and address
localized drainage problems citywide.
o $2'lM of projects completed the passage of the measure.
o $26M backlog of work still remains (includes inflation)
FY 2016-17 Storm Drainage
Capital lmprovement Program
Rollins Area Collection
System
E! Portal, Trousdale, Gilbreth
Creek lmprovements
Neighborhood Area Storm
Drain Project No. 9
Flap Gates on Sanchez
Lagoon
Program Management
$2,900
$900
$700
$500
$50
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Prolects
Estimated
Costs
Total Recommended $5,0s0
u1
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Capital Improvement Program Map
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Summary of FY 2016-17
GIP Program
General Fund projects
Gas Taxll\4easures A & l\4 Fund projects
Water System Enterprjse Fund poects
Sewer System Enterprise Fund projects
Storm Drain System projects
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$260.000?
Estimated CostsCIP Program
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$2,700,000
$2,500,000
$4,700,000
$5,050,000
Total Recommended $19,635,000
Gateway Signage
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City Gouncil
Feedback & Direction
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STAFF REPORT AGENDA NO: 6a
MEETING DATE: May 11,2016
lo:Honorable Mayor and City Council
Date: May 11,2016
From: Carol Augustine, Finance Director - (6501 558-7222
Subject: Study Session: Fiscal Year 2016-17 Budget
The purpose of the this report is to give an overview on the development of the 2016-17 fiscal
year budget, and receive Council comment and direction. No Council action is required.
Development of the fiscal yeat 20'16-17 budget has been underway since January, and the final
budget document is beginning to take shape. Before finalizing the proposed budget for City
Council approval at a public hearing in June, staff wishes to provide this budget overview for
Council comment and direction. A summary of current economic conditions is provided to give
context to the fiscal year revenue forecast, and major changes from prior fiscal years are
identifi ed and explained.
RECOMMENDATION
BACKGROUND
Although the economy in the Bay Area has improved significantly since the 2008-2010
recession, the City continues to be ever cognizant of the uncertainty that results from the ebbs
and flows of the economy, and has focused its efforts on establishing fiscal policies that will
sustain Burlingame's long-term financial strength through all economic environments. The City
has sought to identify any unfunded liabilities and aggressively set aside funds to decrease the
burden of such liabilities on future year budgets. ln addition, the City has established reserve
levels that will allow the City to deal with the inevitable downturns in the economy as well as
potential emergencies and unforeseen events. However, fiscal sustainability is but one of the
organization's overarching goals for which the 2016-1 7 fiscal year budget will need to provide.
ln addition to funding dayto-day operations, prior year liabilities, and currently unfunded
facilities and infrastructure projects, the budget will necessarily reflect limited fiscal capacity to
take on new priorities and unexpected opportunities. Hence, staff has relied on the direction
provided at the Council's goal-setting meeting in January to allocate the resources of the
organization toward achievement of specific out@mes, to the extent resources are available, in
fiscal year 2016-17. Should other priorities emerge, Council consensus would be required
before work could be undertaken. The budget document will delineate in greater detail the
planned application of specific resources within departments loward the goals established by
the Council.
FY 2016-17 Budget May 11, 2016
Economic Conditions - The following information and analyses on the economic forces
affecting local government agencies has been compiled largely from reports provided by HdL
Companies, the City's sales tax consultant, in partnership with Beacon Economics, LLC. The
evaluation is included here to offer additional perspective to the projections contained in both
the revenue and expenditure budgets for each of the City's various funds for the 2016-17 fiscal
yeaf.
National Economy
Data from the Bureau of Economic Analysis (BEA) showed the nation's economy slowing to a
crawl in the 4h quarter of 2015, and falling car sales, equipment purchases by business, and a
downward revision to consumer spending only served to darken the economic view. Consumer
sentiment fell, small business optimism hit its lowest point in two years, and American
manufacturers continued to face headwind from the weak global economy. Fears of a U.S
Recession grew and then subsided in the first quarter of 2016 as business owners seemed to
be in "pause" mode. ln mid-March, the Federal Reserve marked down its forecast for U.S.
economic growth for the entire calendar ye at lo 2.2 percent from 2.4 percent.
The nation's economy entered 2016 poised for economic growth. As with the expectations of
the prior year, however, the Commerce Department could report only that U.S. gross domestic
product (GDP, the widest measure of overall economic activity) grew a disappointing 0.6
percent annualized rale in the year's first quarter. The reality is that the U.S. economic
expansion continues to move along at a steady, if mediocre, pace. Although there is currently a
surprising degree of market volatility, Beacon Economics continues to forecast growth in the 2.5
percent range for the year, with an even brighter outlook for 2017. This outlook is the result of
Beacon's review of various segments of demand in the U.S. economy.
Specifically, real spending data from the BEA indicates that 2015 was a strong year for
consumer spending on goods, particularly in the auto sector, where U.S. automakers enjoyed a
record year. Consumers are being helped by solid, ongoing job groMh (as discussed below),
weak inflation, and continuous low interest rates. Beacon contends that the low interest rates
should also help the housing market improve this year. Low fuel prices leave households more
to spend elsewhere, and the country will face limited exposure to weakness abroad. Even so,
concerns about the distribution of income are a hot topic in this election year and a growing
issue for the broader economy. Overall, U.S. economic groMh is expected to remain steady,
with 2.6 percent growth in real GDP year-over-year for FY 20'|,6-17.
Job growth increased by 2.1 percent last year, and is off to respectable good start in 2016. This
year the labor market reflects an unemployment rate at 4.9 percent. More people are working
full time and wages are on the rise. The U.S unemployment rate is expected to edge down
more slowly over the course of the next year as wage gains and the prospect of full-time
employment draw more people into the labor force. The graph below (from the U.S. Bureau of
Labor Statistics) shows changes in the national unemployment rate for the past 10 years.
2
DISCUSSION
FY 2016-17 Budget May 11, 2016
4
State Economy
For the fourth year in a row, Califomia outpaced the nation in job growth as well as output. The
state experienced broad-based gains across its key industries ranging from agriculture to high
tech.
Job caitrJ Acrcss california's lndustries
Indr$try 2015
(000,
change
(ooo$
charge
(%)
Constnlction
Transport,warehous€,Util.
lnfonration
Leilue and Hospitality
rducation/Health
Admin srpport
Profsci and Tech
Real Estate
R€tail Trade
Managenlent
Govertrluent
finance and lnsrrance
farrr
other Services
Wholesale Trade
Mamrl-adnring
NR/MininS
Total Private
Total Nont:arm
726.6
553.5
482.5
ri28.2
2,{55.8
r,05E.8
1,207.4
271.9
r,663.4
230.r
2,460.0
526.2
423.3
5{5.3
?20.8
t,292.2
29.0
r3J91.7
16p51.8
52.2
30.1
19.6
69.4
90.0
33.E
14.1
6.1
34.5
4.5
48.3
9.6
6.9
8.7
10.8
1E.0
-2.6
419.4
467.7
Beacon Economics expects the quarterly unemployment rate to continue to fall gradually
throughout the rest of the year and into next year, dropping to 5.2 percent by mid-2017. The
UCLA Anderson Forecast also calls for a steady decrease in the state's unemployment rate,
with California's unemployment rate to be "insignificantly different" from the U.S. rate at 4.9
percent by the end of the 2018. Per that same forecast, real personal income growth is
estimated to be 3.4 percent in 2016 and 3.2 percent in 2017 .
After reaching a peak of 12.4 petcenl in 2010,
California's unemployment rate has dropped to 5.4
percent as of March 2016. The state's job groMh has
consistently exceeded the U.S. groMh rate over the
past three years and enjoyed the fourth-highest pace
of groMh among all states last year. Tech-related
sectors lead the state in job growth, but gains have
been broad-based and include lower-wage sectors
such as retail and leisure/hospitality, middle-wage
sectors such as construction, and higher wage sectors
such as professional, scientific and technical services.
California job groMh will continue to exceed the
nation's pace of growth in 2016 and 2017, sustaining
increases in consumer spending and business activity
and improving govemment flnances. More
Californians should find full-time employment, and
existing workers will see their hours and earnings
increase this year. Like the U.S. economy overall, the
California economy is expected to see strong hiring
that will fuel steady groMh in consumer spending.
3
01106 01m7 01n)8 01/os 0r/10 0r/11 01r't2 01113 01/'14 01rr5 01116
fuLtttt
7.7
5.8
4.2
1.9
1.8
2.9
2.5
2.1
2.0
2.0
1.9
1.6
1.6
1.5
1.4
-E.3
1-2
3.0
FY 2016-17 Budget May 11, 2016
The state continues to face familiar challenges in 2016 and beyond. As the economy prospers,
home prices shoot up, and housing affordability plunges. Builders respond, but the incentives
and constraints they face affect the mix of homes, leading to more higher-priced homes and an
undersupply of the lower-priced homes that the state needs. This story is not new, but rather is
a recurring theme of California's housing market. Beacon also points out that California's fiscal
situation is yet another theme in the state's economic cycles. For years, the state's revenue
stream has been heavily dependent on the personal income tax, particularly taxes collected on
those in the top tax bracket. Many in that bracket have high, but volatile, incomes that are tied
to the performance of the stock market. As such, the state's revenues are especially cyclical,
rising sharply when the economy and financial markets are on the rise, but falling precipitously
when the economy heads south.
Local Economy
Beacon Economics provides analysis of the economy of the San Francisco Metropolitan
Division (MD) in their quarterly "Regional Outlook" report. The MD covers the counties of San
Francisco and San Mateo.
While growth in FY2015-16 slowed 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. San Francisco and San Jose are tied as the fastest growing
metropolitan areas in the state over the past year. Steady gains in payrolls in the San Francisco
MD over the past year have helped drive the region's unemployment rate down to 3.1 percent, a
decline of 1.0 percentage points. ln other words, not only is the unemployment rate falling, but it
is falling for the right reasons, with household employment growing by 4.1 percent over the past
yeat.
Overall, employment growth in San Francisco was led by the Professional, Scientific, and
Technical Services sector, which increased payrolls by 15.1 percent, to .iust over 183,000
positions. With over 24,000 jobs added in the past year the sector was responsible for over half
of the total nonfarm jobs added in the region. This follows significant flows of venture capital
money that have come into the area. San Francisco received over $8.5 billion dollars in venture
capital investment during the first half ol 2015, a 53.4 percent increase over the first half of
2014. More importantly, despite concerns about another tech bubble in Silicon Valley, flrms
receiving venture capital are older and more stable than those in previous cycles.
4
FY 2016-17 is shaping up to be one of steady gains in overall economic activity, with the state's
key industries continuing to see job growth, and the household incomes improving with rising
wages. Despite concems over the business climate, the state economy is one of the most
dynamic in the muntry, as evidenced by the large amounl of venture capital it has attracted on a
consistent basis over the last several years.
FY 2016-17 Budget May 11, 2016
lndustry Job Creation
r,.o",togr.r f .
..-,.,"*..1,",
"o*-,!,-"-*"i,-.,0,..-,'"",,,!,,-***!,,'
*"a-.r**,1,-
,-r-,**,*.1_
*-r--- | -
Other sectors lhat have contributed to San Francisco's surge in job creation over the past year
are Construction, lnformation, and Other Services. Like the Professional, Scientific, and
Technical Services sector, the tnformation 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. Construction is another sector that is experiencing strong growth, with multi-family
permifting being particularly strong.
Jobs gains over the past year have been broad based with only a handful of sectors in the San
Francisco MD cutting their payrolls. Employment in the Art and Entertainment sector, the
Management sector and the Finance and lnsurance sector were the only major private sectors
to see payrolls decline in the past year. With the strength in the labor market, the
unemployment rate in the region is forecast to hold steady, in the 3 - 3.5 percent range, through
the end of 2020.
5
o
Although overall consumer spending has slowed in recent months, residents of the San
Francisco MD continue to shop at local establishments and make large purchases. Taxable
sales in San Mateo County increased 2.1 percent in the fourth quarter of 2015 from the same
quarter one year prior. ln comparison, taxable sales grew by 3.5 percent in the state overall in
lhat same period. According to data from the HdL Companies, consumer spending grew across
the vast majority of categories over the past year in San Francisco MD. Leading the way was
the Restaurants and Hotels category. This is not surprising given the surge in tourism in the
region over the past year. During the first seven months of 2015, average daily rates for hotel
rooms in San Francisco increased 8.1 percent compared to the first seven months of 2014, and
held steady through the end of the calendar year. These rising room rates were met with rising
hotel occupancy rates, leading to a 9 percent increase in revenue per available room in the
area. Moreover, more local residents are spending money on entertainment activities and
dining at local restaurants.
Not far behind Restaurants and Hotels, is the Autos and Transportation category. With rising
employment levels and wage growth in the region, local residents are comfortable making large
FY 2016-17 Budget May 11, 2016
purchases. Similarly, taxable receipts in the General Consumer Goods and the Building and
Construction categories also saw steady gains over the year. The major category to experience
a decline in taxable receipts over the past year was Fuel and Service Stations. However, the
rapid drop in gas prices at the end of 2014 lhal continued throughout the year was the driving
force behind this decline, not a reduction in consumption.
Helping to fuel taxable sales in San Francisco has been increasing incomes and wages among
local residents. Despite this, 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. Beacon Economics is
forecasting taxable sales in San Francisco to surpass the $8.9 billion mark by the end of 2016.
After that, a longer-term growth trend of approximately three percent per year is expected from
2016 through 2020.
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 201 5 of about 10 percent in San Francisco, 1 1 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. Although construction starts are at the highest level in about 30 years,
new units 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.
6
s8.000
t6.000
t4.000
32.000
Calrlomia
t0
--
o!
ll
Q!
rt@
t2
-
&rdingana
o3
t3
Set-rs Pnn CepIre
r
Counly
tl il
FY 2016-17 Budget May 11, 2016
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, the 2016-17 budget has 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 volatile, inexorably linked to the
health of the general economy and events that cannot be anticipated in the short term.
Renewed emphasis on budgeting for the longer-term will provide more certainty for future
budgets. However, the City cannot 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. Staff will strive to identify these liabilities and defenals
and recommend their systematic funding within the operating budget (of the appropriate fund)
whenever possible.
General Fund
Burlingame's fiscal year 2015-16 budget anticipated that the local economy would continue to
gain momentum at a moderate pace. Departments were not required to provide further
expenditure reductions for the mid-year analysis, which was presented to the City Council in
March. However, departments were asked to identify, to the extent possible, additional funding
sources or revenues to offset any additional budgetary needs.
The City's 2015-16 fiscal year General Fund budget now reflects mid-year budget changes, with
revenues projected to be nearly $3.6 million (5.8 percent) higher than projected in the FY2015-
16 adopted budget (including a one{ime revenue of nearly $1 million in sales tax revenues from
the end of the State's "triple flip" revenue swap). For fiscal year 2016-17, General Fund
revenues are expected to grow an additional 0.5 percent overall (2.1 percent if the one{ime
revenue in the current fiscal year is excluded.) Although revenue projections for the 2016-17
fiscal year are discussed in more detail in this report, it should be noted that these revenue
projections vary less than one percent in total from the five-year forecast presented with the
mid-year report. Nearly all of the mid-year General Fund revenue adjustments were the result
of increased tax receipts, reflecting real progress in terms of the local economy. Departmental
expenditure budgets remain tight, however, in recognition of the many unfunded projects that
need to be addressed in some manner in the near future.
ln establishing departmental budgets for the upcoming fiscal year, emphasis was placed on the
desire to maintain current service levels, deliver on the City Council's established shorter{erm
goals, preclude any increase in unfunded liabilities, and prepare to address the City's current
unfunded needs. As a result, the initial expenditure budgets for the 2016-17 fiscal year continue
to reflect significant fiscal restraint on the part of all departments.
7
FY 2016-17 Budget May 11, 2016
General Fund - Revenues
CITY OF BURLINGAME, CA
SUMMARY OF GENERAL FUND REVENUES
FY13-14
Actual
FY14-15
Actual
FY15-16
Adiusted
Bud8et
FYtS-17
Proposed
$ change
Lom Prio,
Year
% Changc
from Prior
Year
Property Tax
Saler and lJse Tax
Transient Occlpancy Tar
Other Taxes
Franchise Tax
Eusiness Tax
StAtE HOPTR
Real Property Transfer Tax
Ucenrer & Pe.mitt
Fines, Forteitures and Penalties
Usc of Money & P,operty
Oraiges for Services
Other Revenue
State Subventions
lnterest lncome
Total, General Fund Revenue sss,627,628 s61,909,081 s5S 7
S1s,496,548
10,195,123
21,357,066
516,577,381
11,100,900
23,698,396
sr7,716,400
13,244.000
2s,200,000
S18,o26,ooo
11.959,000
25,000,000
309,600
(1,27s,000)
800,000
r.7%
-9.6%
3.2%
-o.2%
1.7%
0.0%
1.1%
1.1%
L2.7%
-6.6%
5.5%
-34.4%
6l.a%
20.4%
5343,100 o.s%
1,575,527
981,821
u,968
447,85s
tt7,7t2
7a8,772
203,451
3,942,937
165,628
170,146
225,080
1,602,000
973,000
66,000
472,000
87,000
835,000
220,500
4,544,200
45,500
157,000
323,000
1,598,000
990,000
56,000
477,000
88,000
942,000
206,000
4,795,200
30,500
254,000
(4,000)
17,000
0
5,000
1,000
106,000
(14,s00)
2s1,000
(16,000)
97,000
66,000
65,830
Revenues from property taxes are expected to remain strong in the 2016-17 fiscal year. As
of the writing of this report, the tax roll established by the County Assessor's Office shows a
growth of 6.6 percent in assessed value for the City of Burlingame over the prior year. (This
includes an inflation factor of slightly over one percent for all properties; the remaining groMh
is attributable to higher assessed values of properties that have changed ownership over the
course ofthe year.) Although there is nota one-on-one correlation of the change in assessed
values to the change in property tax eventually allocated to the City, it is a good indication of
how property tax receipts will trend in the upcoming year.
The reason the forecast for property tax revenues shows only a mild increase from the current
year's property tax estimate is because of changes in distributions from the County's ERAF
(Educational Revenue Augmentation Fund). Higher funding for education will be needed, as
the Governor's proposed budget significantly increases funding distributed to schools under
the Local Control Funding Formula, legislation enacted with the fiscal year 20'13-14 state
The folfowing table shows the current forecast of fiscal yeat 2016-17 General Fund revenue
proiections in the context of recent year actual amounts and current year estimated amounts.
The 2015-16 Adjusted Budget column includes the revenue amendments approved with the
mid-year report on March 16th. Note that while the fiscal year 2016-17 projections for many
revenue sources show continued improvement over the cunent mid-year poections,
adjustments for one-time revenues in fiscal year 201 5-16 result in a mere /z percenl increase in
General Fund revenues for the upcoming fiscal year.
L,579,976
966,67s
64,810
436,853
83,840
437,704
207,957
4,480,7 46
L,047,3U
455,725
260,740
I
FY 2016-17 Budget May 11, 2016
budget. The higher funding will translate to higher draws from county ERAFS statewide. ln
addition, ERAF funds are being used to satisfy other State commitments that will ultimately
eliminate any excess ERAF that has (in the past) been returned to the cities and other local
governmental agencies that contribute to the fund. Although excess ERAF refunds will
contribute nearly $1.5 million to the City's property tax receipts in the current fiscal year, a
conservative projection of $800,000 is projected for fiscal yeat 2016-17. Other property tax
line item revenues, both secured and unsecured, are expected to remain strong.
City of Burlingame
General Fund Revenue Composition
I Property Tax
r Sales and Use Tax
' Transient
Occupancy Tax
r Other Revenue
TOT (fransient Occupancy 7ax,f revenues constitute Burlingame's largest General Fund
revenue and are usually a good indicator of current economic activity. At mid-year, the forecast
for TOT for the current (2015-16) fiscal year was increased $2.1 million (9.1 percent) to reflect
growth in receipts yearto-date. Hotels in the area continue to experience very high occupancy
rates (averaging 84.7 percent), including higher-than-normal occupancy for the month of
February due to the Super Bowl. The fiscal yeat 2016-17 budget forecast anticipates a further
rise (3.2 percent) in this revenue source. Although occupancy rates should level off in the near
future, and the number of Burlingame hotel rooms is not increasing, the average daily room rate
(ADR) will continue to rise moderately given the competition for lodging in the area of SFO. The
five-year forecast shows a continued rise in these revenues until the 2018-19 fiscal year, when
a new hotel at SFO is expected to open.
Sares tax receipts also reflected a healthy economy this past year. A 14.3 percent mid-year
adjustment for the 2015-16 fiscal year reflected a 10.3 percent increase in taxable transactions
over the same prior year's period, as well as a one-time bump up of nearly $1 million due to the
end of the revenue swapping procedures ("triple flip") employed by the State since 2004.
Although fourth quarter 2015 sales appear to be more subdued when compared to the prior
fiscal year, the mid-year poection should be obtainable.
o
sales and Us€ Tax,
ta.2%
Other Revenue,
t4.9%Property Tax,
27A%
Transient
Occupancy Tax,
395%
FY 2016-17 Budget May 11, 2016
However, the proposed sales tax revenue budget for fiscal year 2016-17 shows a marked
decline (approximately $500,000) from the estimate poected in March's five-year forecast. An
analysis of year-to-date receipts concluded that approximately $200,000 of the BOE's tax
allocation to Burlingame was due to one{ime use tax receipts that would not re-occur with any
frequency in the future. After also adjusting for the additional triple flip revenues the City will
receive in the current fiscal year, sales taxes are now projected to be just shy of $12 million next
fiscal year.
As can be seen from the pie chart above, approximately 85 percent of General Fund revenues
(per the initial fiscal year 20'16-17 budget) are derived from TOT, property tax and sales tax
receipts. Because TOT and sales tax revenues are closely linked to the local economy, these
revenues tend to be much more volatile than property taxes and most other revenue sources.
For long-range fiscal planning purposes, these revenues should bolster the General Fund
reserve when the economy is strong, and be used to support General Fund services in times of
economic downturn. The volatility of these revenues is a major consideration in the City's risk-
based reserve policy.
Other taxes consist largely of franchise fees and the City's business license tax, comprising
2.4 and 1.5 percent, respectively, of the City's General Fund revenue sources. The solid waste
franchise fee makes up nearly half of all franchise fee revenues for the City. Because garbage
collection rates are stable, this revenue will remain flat. Euslness license taxes, generally
$100 per business establishment, should also remain fairly stable. ln addition, propetv
transfer faxes, charged when properties change ownership, have increased in recent years
with the rise in property values and the overall health of the real eslate market. These revenues
are anticipated to remain relatively high at approximately $477,000.
Lrcenses and permits consist largely of alarm permit fees and taxicab licenses. These
revenues, which account for less than lz of one percent of total General Fund revenues, are not
expected to deviate significantly from current collections. With more stable staffing in the area
of parking citations, enforcement efforts have returned to normal levels, and revenues in the
category of fines, forte ures and penalties are expected to improve from the current year.
Compliance with parking restrictions throughout the city is necessary to support the safe and fair
tumover of the limited parking facilities available to residents, businesses and customers. Note,
too, that the previous Special Revenue Fund "Traffic Safet/ has been closed out to the General
Fund. lt is no longer necessary to report these revenues separately, and expenditures of the
fund (for traffic safety programs) are borne by the General Fund as well. Revenues from traffic
violations are projected to be about $90,000 in fiscal year 2016-17.
10
FY 2016-17 Budget May 11, 2016
CITY OF BURTINGAME, CA
CHARGES FOR SERVICES BY DEPARTMENT
FY13-14
Actual
FY14-15
Actual
FY15-16
Adjusted
Budget
FY16-17
Proposed
$ Change % Change
from Prior from Prior
Year Year
Police
Pa]ls
Recreation & Parks
Planning
Public Works
Library
(Xher
Total, Departmental Fees
86,648
132,2@
2,206,209
545,97a
383,054
580,243
7 545
60,247
158,47 5
2,s99,8s4
617,287
425,538
613,879
5,426
55,500
164,s00
2,68a,2@
631,500
383,000
617,000
4soo
62,?00
77 2,500
2,778,000
626,500
463,000
688,000
4,500
7 ,200
8,000
89,800
(s,000)
80,000
71,000
0
t3.00k
4.9%
3.3%
-0.8%
20.9%
77.5%
o.o%
33,942,937 54A80,746 54,s44,2OO 54,79s,2OO s2s1,000 5.s%
Revenues lrom charges for sentices levelled out in fiscal year 2015-16 after experiencing a
growth of nearly 10 percent in the prior year. ln the upcoming fiscal year, service volumes are
not proposed to deviate significantly in any one area. The Master Fee Schedule will be updated
per Council direction to keep up with the current cost of providing services; the revised schedule
is effective at the beginning of the 2016-17 fiscal year. ln addition, credit card fees that
previously offset these revenues are now budgeted separately as an expense. The revenue
projection for this category has decreased somewhat ($200,000) from March's five-year forecast
based on the departmental projections for this revenue source as shown above.
Finally, interest income on the City's investment portfolio will be relatively stable. The 20.4
percent increase reflected in the 2016-1 7 budget is largely reflective of a change in the reporting
of this revenue source. ln prior years, the cost of the City's investment advisors (approximately
$63,000) has offset this investment income. Although yields on the investment portfolio will
continue to be reported both gross and net of these fees, it is more appropriate to show the
entire earnings on the City's investment portfolio, and the cost of advisory services as an
expense in the Finance Department's budget.
General Fund - Exoenditures
The following table shows the current projections of fiscal year 2016-17 General Fund
expenditures by departmenVarea as compared to the current year adjusted budget:
May 11, 2016
Again, expenditure budgets are compared with the prior fiscal year as well as with the current
year (2015-16) adjusted budget. The FY'l5-16 Adjusted Budget column includes all budget
revisions approved by the City Council since the beginning of the fiscal year, including mid-year
budget revisions.
The proposed budget for fiscal year 2016-17 lends itself fairly well to comparison: variances
from the prior year are less significant than those in prior years due to a consistency in
accounting principles and budgetary assumptions, and a systematic allocation of the costs of
funding the City's long-term liabilities. Overall, proposed budget expenditures are shown as
increasing 5. 1 percent over the fiscal year 2015-16 adjusted budget. Major deviations within
the departments are largely the result of three budgetary changes:
1)Strateoic lncrease in FTE (3.70 Citv-wide)
The fiscal yeat 2016-17 Budget proposes to add FTE (full time equivalent) positions as
needed to carry out the City's priorities. The proposed increase in FTEs would support
General Fund activities:
Two Police Officers are proposed to boost the effectiveness of the Burlingame Police
Department. The number of officers has declined through the major economic
downturns in 2001 and again in 2008. The City currently employs 37 sworn staff
(compared to 41 in 2008 and 50 in 2000). Over the years, the City-wide growth in
schools, residential, retail and office space has led to increased calls for service each
year, reaching approximately 45,000 in FY 2014-15 (a 50 percent increase from FY
2007-08). As calls for service are expected to continue with future development, the
two additional officers would help manage the increased workload.
California Proposition 47, an initiative approved in November 2014, re-classified "non-
serious, nonviolent property and drug crimes" as misdemeanors instead of felonies.
As a result, Burlingame, along with most other local cities, has seen an increase in
property crimes (e.9. auto burglaries, residential burglaries, shoplifting, and certain
drug offenses) and higher recidivism rates associated with these crimes. ln order to
CITY OF BURLINGAME, CA
SUMMARY OF GENERAL FUND EXPENDITURES
FYl5-17
FY14-15
Actuals
FY15-16
Adjusted
Budtet
FY16-17
Proposed
$ Change
from Prior
Year
% Chante
from Prior
YearBy General Fund Program
General govemment
Public Safety
Public Works
Community Development
Leisure & Cultural Services
TOTAI", Operating Expenditures
S4,121,890
22,773,493
4,769,874
t,2M,202
1 495,62L
s44,40s,080 549,8O4,642
70,967
7,435,552
227,902
47,997
698,709
52,521,t27 5.1%
5s,112,7s2
24,936,O08
4,9r4,735
1,582,394
13,258,753
5,783,7L9
26,377,560
5,142,637
1,670,391
L3,957,462
L.4%
5.8%
4.6%
5.6%
s.3%
52,325 ,7
12
FY 2016-17 Budge,
May 11, 2016
prevenUreduce these types of crimes, the Police Department would like to utilize the
additional officers on a "Quality of Life" team, specifically tasked with combating these
criminal activities with various crime suppression details, while also addressing other
types of issues important to Burlingame, such as graffiti abatement, park issues,
visitoritourist safety, homeless outreach, juvenile issues, and other code enforcement
issues. ln addition, the officers would be used to help backflll vacancies that arise due
to training, sick leave, and injuries. Mandatory training for officers continues to rise
and injuries and sick leave are always a part of such a physically demanding job.
Although the addilional officers would not completely alleviate the need for overtime
coverage in these areas, staff believes it would help cut some of these overtime costs
and reduce the negative physical and mental impact created from overtime shifts.
An increase of one FTE is proposed for an Assistant Planner in the Community
Development Department. The Planning Division experienced the elimination of an
Assistant Planner position in 2009. Since that time, the volume of development
applications has recovered and exceeded volumes experienced prior to the downturn.
ln addition, the City has embarked on a comprehensive update of its General Plan and
Zoning Ordinance, which involves a significant amount of staff oversight and
coordination. As the volume of work has increased, the Planning Division has utilized
parttime and contract staff to cover the additional workload. However, to most
effectively meet the demands of the workload, develop the professional skills of the
staff, and provide consistent and effective customer service, two part{ime positions
are proposed to be converted to one full{ime Assistant Planner position. Because the
proposal includes the elimination of two non-benefitted (part{ime hourly) positions (an
lntern and an Office Assistant), the personnel cost increase is kept to a minimum -
about $48,000. The Assistant Planner would be responsible for working the public
counter, answering telephone inquiries, and processing more minor planning
applications. Additionally, this position would assist with public noticing, packet
preparation and delivery, and other related tasks.
ln the Parks and Recreation Department, the budget includes a proposed increase of
0.45 FTE. The reclassification of a .70 FTE Recreation Supervisor to a 1.0 FTE
Management Analyst is proposed; the position will be utilized 75 percent in Recreation,
and 25 percent in the Administrative Services/lT lnternal Services Fund (lSF). The
change from Recreation Supervisor to Management Analyst will more accurately
describe the work to be assigned not only for Parks and Recreation, but also the
additional services provided to other City departments. lnitially, this position will assist
with the overhaul of the City's webpage, but will also provide ongoing website
management going forward. An increase in a Recreation Coordinator position (from
0.6 to 0.75) will assist with increased workloads in the department.
13
FY 2016-17 Budget
Due to organizational needs and cross-departmental projects, the Library budget
includes an increase in the current.T5 FTE Graphic Artist position to one full FTE.
2) Fullv Budoet Costs of Premium Pav
The City compensates employees in specific eligible categories with payroll premiums
FY 2016-17 Budget May 11, 2016
For the FY 2015-16 budget, the holiday pay premium was not included in the
calculation of the wages budget for the Police Department. ln addition, administrative
leave payments were not wholly budgeted. Some employees' premium payments
increased as the employees became qualified to receive them. Through an analysis of
the Police Department's personnel budget for the cunent fiscal year, it was determined
that these under-budgeted payments can be 'covered" by the various positions that
were vacant throughout the fiscal year. However, budgetary savings will be almost
completely reduced for the fiscal year.
As it is the City's policy to budget for the full cost of each position for the entire year
(unless otherwise conditioned), the fiscal yeat 2016-17 budget reflects the full
anticipated cost of all premium payments. Although the Police Department budget is
most highly impacted by this adjustment (a $300,000 increase from the 2015-16 fiscal
year budget), sufficient funds for this type of contractual premium compensation have
been included within all departmental personnel budgets.
2\lncreased Cost of Pens ion and Health Benefits
As noted in the preparation of the five-year forecast earlier this year, employer
contributions for CaIPERS pensions for both Safety and Miscellaneous Plan
employees have risen in the past few years due to the impact on investment losses in
fiscal year 2008-09. 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. These changes include not only
changes in longevity and other demographic projections, but also the expected impact
of a less volatile, but lower earning mix of investments in the CaIPERS investment
portfolio. This, along with a more aggressive funding of past liabilities, will serve to
push rates higher.
The proposed budget provides nearly $5.2 million for City-wide pension benefits, a
$720,000 increase from the current year's budget. The rise in the City's employer
contribution rates to Miscellaneous and Safety Plans accounts for approximately
$400,000 of the increase. The remaining rise in pension costs is due to an increase in
"PERSable" income from negotiated wage increases, additional FTEs, and the
inclusion of full premium pays as discussed above in the proposed budget. Note that
City employees covered by CaIPERS pension plans contribute a mlnimum of 1.5
percent of wages toward the employers' share of this cost, in addition to the minimum
eight percent employees' contribution rate (rates vary by CaIPERS plan and bargaining
unit. )
Health care rates are expected to grow at a rate of 8 percent annually in the near
future, adding neady $230,000 to the FY 2016-17 proposed budget for City-wide
personnel costs.
such as shift premium pay, certificate pay, bi-lingual pay, and holiday pay (for safety
employees). The payment amounts are calculated based on the Memorandums of
Understanding (MOUs) for each of the bargaining groups. These premium pays are
reported to CaIPERS as compensation earned.
14
May 11, 2016
Again, most major variations with the prior-year budget are due to these three overall
personnel cost changes in the development of the fiscal year 2016-17 budget. Shown below
are appropriations by department or functional area:
Budget increases for General Government activities are minimal. lt should be noted that
while the proposed budget does not include an appropriation in the City Clerk's office for
election expenses (budgeted for the current fiscal year at $50,000), such an appropriation
may be needed if there is an initiative added to the November 2016 ballot.
Although the Central County Fire Department's FY 2016-17 General Fund budget as
approved in April reflects an increase of approximately 1.1 percent over the FY 2015-16
projection, Burlingame's share of the budget decreased by $288,000 (2.7 percent). This is the
result of the completion of CCFD's provision of fire services to the City of Millbrae. (Until
December 2015, the City of Millbrae and the City of San Bruno shared some fire services and
associated expenses. CCFD now provides those services to the City of Millbrae and is
compensated accordingly.) As Millbrae is now sharing in the cost of personnel, fire inspection
services and operating costs, per capita costs have decreased approximately 4.5 percent.
Police and Dispatch expenditures appear to be increasing at a higher-than-average rate, due
in part to the inclusion of an additional two FTE police officer positions, and the more
conservative budgets provided for specialty pay. Safety retirement costs are also increasing,
due to higher pensionable wages as well as increases in required employer contributions. As
noted in the mid-year report, CaIPERS now invoices employers in the pooled Safety plans
separately for contributions to the plan's unfunded liability (UAL), in addition to the employer's
contribution rate as a percentage of payroll. The CaIPERS employer's contribution rate for
the City's safety employees has increased ftom 2O.23 percent to 21.23 petcenL While this
rate increase amounts to an additional cost of only $44,000, the required lump sum payment
increased over $180,000, which is an additional 10.6 percent over the total current year cost
CITY OF BURI.INGAME, CA
SUMMARY OF GENERAL FUND EXPENDITURES
Desrription
FY2013-14
Adual
FY2014-15
Actual
FY15-16
Adjusted
Budget
FltL6-17
Proposed
S Change
frcm Prior
Year
% Change
from Prior
Year
General Govemm€nt
Public safety & Traffic
CentralCounty Fire + oisaster Prep
Police & Dispatch
Parking Enforcement
Public wor*s
Community Oevelopment - Planning
Leisure & Cuhur.l Services
Aquatics Center
Libra ry
Pa rks & Recreation
Total Expenditures
5s,870,1s1 54,121,890 Ss,tl2,7s2 Ss,183,719 570p67 L.4%
9,553,912
70,22t,593
0
3,339,585
7,04L,240
1o,470,376
72,303,LL7
0
4,769,474
t,z$,202
11,145,345
13,175,961
614,702
4,914,735
L,582,394
(249,090)
!,674,234
6,408
227,902
47,997
-2.2%
\2.7%
\.o%
4.6%
s.6v"
355,974
3,920,s11
5,836,196
400,831
4,392,460
6,702,331
424,OOO
4,462,237
7,972,5L6
476,000
5,M2,772
52,000
r80,475
466,234750
940,139,162 544,405,081 S49 S 2,527,127 S.tlo
1F
FY 2016-17 Budget
10,896,255
14,854,195
627,r10
5,t42,637
7,6?O,391
12.3%
3.1%
5.8%
FY 2016-17 Budget May 11, 2016
of safety retirement. Note that the City's classic Safety members are currently contributing
two percent of payroll towards the employer contribution (in addition to their 9.0 percent
member contribution). This additional contribution will increase to three percent on January 1,
2017. Non-personnel expenditures for the department remained fairly flat.
The FY 2016-17 Burlingame Library budget has increased slightly with the proposed opening
of a Passport lntake Office. ln an effort to offset a decrease in service fee revenues and in
recognition of a growing community need, the Library will provide this new service in
partnership with the US State Department beginning in July 20 16. The office will be open
three days/week for a total of nine hours/week. The associated personnel budget includes the
addition of a part{ime (hourly) position, equivalent to a Library Assistant position, as the new
Passport lntake Agent. The addition will remain budget neutral, as this salary will be paid out
of the passport service fees: an execution fee for Passport Acceptance of $25 is set by the
State Department and is non-negotiable, and a passport photo fee of $15 will be charged to
those patrons who wish to purchase a passport photo at the time of passport acceptance.
Both fees are included in the proposed Master Fee Schedule for the 2016-17 fiscal year. The
Library's proposed non-personnel budget includes the equipment and supplies to provide
these services.
The proposed General Fund budget for the Parks and Recreation Department includes the
additional .2 FTE increase described previously. (The remaining .25 increase in FTE will be
charged to the lnformation Technology Services Fund.) Additionally, the Parks Division
personnel budget includes two reclassifications. The cunent Parks Supervisor/City Arborist
will be reclassified to the Parks SuperintendenUCity Arborist position. This reclassification will
more accurately describe the actual job duties being performed for the City. Areas of
responsibility continue to be staffing the Beautification Commission, coordinaling vendors and
contractors, surveying City parks and facilities and identifying infrastructure concerns,
developing and administering CIP projects, managing Division vehicles and personnel,
attending Council meetings regarding tree-related matters, and administering the City Tree
Ordinance. ln addition, to better reflect the duties and responsibilities of the position, the
current Assistanl Parks Supervisor should be reclassified to a Parks Supervisor position.
Areas of responsibility continue to be coordinating, supervising and evaluating lead workers
and their crews, forecasting the needs and resources of the Division, outlining work
assignments and special projects, acting as a liaison to contractors, assisting with the
management of CIP's, managing the safety program, preparing reports and tracking work
orders, and coordinating with homeowners regarding street tree work. The cost of these two
reclassifications is minimal for the upcoming fiscal year ($19,000).
The Aquatics Division budget, which was decreased in the current fiscal year (a contingency
for significant repairs and/or equipment replacement is set aside in the Capital projects fund),
includes a proposed increase of $ 52,000. The increase is largely due to a proposed $44,600
for the replacement of the pool heater and fixtures. ln addition, costs of the BAC (Burlingame
Aquatic Center) contract services have increased by $18,000. However, the costs of the
water, first budgeted to the program in the current fiscal year, were over-estimated and can be
decreased somewhat.
16
FY 2016-17 Budget May 11, 2016
The 2016-17 fiscal year budget proposed for the General Fund can also be compared to the
current year budget by category of expenditure. Note in the schedule below that major
increases in both personnel and non-personnel costs were reflected in the 2014-15 fiscal year
budget due to the inclusion of retiree medical benefits. Both the normal (current year benefits
earned by active employees) and amortized (benefits earned in all prior years) costs of the
retiree medical program are now part of the regular operating budgets.
CITY OF BURTINGAME, CA
SUMMARYOF GENERAT FUND EXPENDITURES BYTYPE
Description
FY13-14
Aduals
FY14-15
Actuals
FY15-15
Adiusted
Budget
FY15-17
Proposed
5 Change
from Prior
Year
% Change
f.om Prior
Yea.
Pe6onnelCosts
Non-PeBonnel Costs
lntemalServices
CapitalOutlay
Total Expenditures
s 22,27r,897 5 22,273,437
t4,t75,426 t8,776,243
3,694,098 3,861,235
57,747 94,155
s40,139,162 s44,/t05,080 s
s 25,206,845
2L,777,U5
3,299,720
720,232
s 27,997,O9t
20,507,037
3,592,t47
229,5@
s 2,790,246
(670,808)
292,42L
109,268
t2?5.1%
Personnel Costs - When reviewing the proposed 2016-17 fiscal year General Fund
expenditure budget by type, note that personnel costs increase 11.1 percent (approximately
$2.8 million) when compared to the current year. Some of the increase is due to the inclusion
of additional FTES as previously outlined (approximately $540,000). lncreases in health
insurance premiums ($218,700) and CaIPERS pension costs ($634,800) also contribute to the
growth in personnel costs. Regular salary increases were calculated to contractually-agreed
upon increases for most miscellaneous employees, including hourly employees; negotiations
with most labor units were completed in the course of the recent fiscal year.
Non-Personnel Costs - This category of costs is actually decreasing slightly ($671,000)
when compared to the current year budget. A decrease in the contract with CCFD ($288,000)
accounts for the largest single cost reduction. Departments were careful to review contract
services to ensure that only projects that were necessary and could realistically be addressed
in the upcoming fiscal year were included in the budget proposal. As such, the City Clerk's
proposed budget currently includes no election expenses ($50,000), and the actuarial
valuation needed by Finance for OPEB obligations (completed as of June 30, 2015) will not be
needed in FY 20',6-17 ($30,000). Contract services expenditures in the City Attorney's Office,
which were increased to fund staffing shortages in the current fiscal year, have decreased
$80,000, as this funding is now included in personnel costs.
General Fund Ooerations Summarv
A summary of the General Fund operations per the 2016-17 proposed budget is shown below
17
7L.7%
-3.2%
4.9%
90.9%
FY 2016-17 Budget May 11, 2016
CITY OF BURLIN6AME, CA
GENERAT FUND OPERATING SUMMARY
FYl4-15
Actuals
FY15-16
Adiusted
Budget
FY16-17
Proposed
Budget
Total Revenue s 61,909,081 s6s,487,600 s6s,83o,7oo
Expenditures
Departmental Expenditures
Transfers (ln) Out
Total Expenditures
(4440s,084)
(7 ,927,87 4l
149,8C/',6421
17,692,973],
1s2,32s,7 69\
17,574,927
(s2,332,9s8)
9,576,123
(3,o0o,ooo)
6,s76,L23
(s7,497,6Ls]. (s9,900,696)
Net Operating Revenue 7,989,985 5,930,004
CIP Renewal & Replacement Reserve (10,s00,000) (3,000,000)
Change in General Fund Balance S s (2,s10,015) s 2,930,004
As anticipated with the mid-year budgetary changes approved by the City Council in March, the
General Fund shows a budgetary surplus (net operating revenues) for fiscal year 2015-"16 of
nearly $8 million prior to funding the CIP Renewal & Replacement Reserve. The adopted
budget provided for a $3 million transfer to the reserve due to the surplus experienced in fiscal
year 2014-15; this amount was increased to $10.5 million with a decrease in the General
Fund's Catastrophic Reserve ($2.5 million) and mid-year results that reflected higher revenues
than anticipated in the original budget for fiscal year 2015-16. Note, too, that 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 two to
four percent of the annual expenditure budget.
The initial General Fund budget for fiscal year 2016-17 anticipates a surplus of over $2.9
million. As previously noted, the budget provides funding of $3 million for an increase in the
Renewal and Replacement Reserve in the City's Capital P@ects Fund, to provide partial
funding of the City's most immediate facilities' needs. Unlike the current Capital Poects Fund
Balance, the Renewal and Replacement funding will not be appropriated to a specific project.
Rather, it will accumulate for capital projects as prioritized by the City Council, to be initiated
when timing is optimal and suficient other funding is identified.
General Fund Balance
The General Fund shows a projected total fund balance of more than $29.7 million at the end
of the 2016-17 fiscal year. As previously stated, budgetary savings in the current fiscal year
should provide a higher beginning fund balance than shown in the chart below:
18
FY 2016-17 Budget
CITY OF BURLINGAME, CA
CHANG€5 TO GENERAL FUND BALANCE
FY15-16
Ad.iusted
Budget
FY16-17
Proposed
Eudset
s 29,237,630 5 26,727,675
65,487,600
149,8O4,642)
65,830,700
(s2,32s,769].
15,582,958 13,504,931
16AO4,7371
(10,500,000)
1r,288,2421
15,756,745)
(3,000,000)
(1,818,182)
The schedule below shows how this change in fund balance will impact the reporting of
General Fund reserve levels:
CITY OF BURLINGAME, CA
GENERAT FUND BALANCE ASSIGNMENTS
FY14-15
Actual
Results
FY15-16
Adiusted
8ud8et
FYt6-77
Proposed
Budget
Economic Stability Reserve
Catastrophk Reserve
Contintency Reserve
Subtotal, Assigned Fund Balance
Add: Unassigned Fund Balance
Total, Ending Fund Balance
513,300,000
4,500,000
500,000
s 1s,700,000
2,000,000
500,000
s 15,800,000
2,000,000
500,000
18,300,000
10,937,630
18,200,000
8,527,67s
18,300,000
77,357,679
As of June 30, 2016, a fund balance of approximately $26.7 million represents 46.5 percent of
the General Fund's total expenditures of $57.5 million for the year. Although this would
normally be considered a very strong level of reserves, the City Council adopted a risk-based
General Fund Reserve Policy that targets reserve levels as a percentage of General Fund
budgeted revenues (before transfers). Because the policy is based on an assessment of the
City's revenue volatility and infrastructure risks, as well as the possibility of extreme events, the
City Council's reserve management strategies reflect best practices in public finance.
The FY 2016-17 General Fund's projected surplus will be used largely to increase the
Economic Stability Reserve and the Catastrophic Reserve to levels prescribed by the City's
General Fund Reserve Policy: The policy calls for an Economic Stability Reserve of 24
percent of budgeted revenues, a Calastrophic Reserve of $2.0 million, and a $500,000
Contingency Reserve. lncreased revenues projected in FY 2016-17 result in an increase in
19
May 11, 2016
Beginnint of Y€ar Balance (BudgevAuditl
Projected Reverues & Expenditures
Projected revenues
Projected departmental expenditures
Subtotal Revenues Net of Erpenditures
General Fund Long-Term Debt
Transfer to CIP Renewal& Replacement Reserve
OtherTransfers ln (Out) of General Fund
Projected GeneralFund Balance, netoftransfers 5 25,727,6f5 S 29,657,'Lg
s29,237,630 526,727,67s $29,6s7,519
reserves of $100,000. Any remaining fund balance will be reported as "unassigned fund
balance".
Other Funds
CITY OF BURLINGAME, CA
BUDGET SUMMARY BY FUND
FY15-16
Adjusted
Budget
General Fund
Capital Proiects
Financing Authority
Building Enterprise
Landfill Fund
Parking Enterprise
Sewer Enterprise
solid Waste Enterprise
Water Enterprise
Special Revenue Funds
Other Funds
Total s 99,878,500 s 10&30s,9s0
s 49,804,642
14,308,000
7 ,8L9,470
1,654,005
244,07L
509,875
to,435,476
554,66L
13,807,984
203,000
537,595
52,325,769
19,135,000
8,008,965
1,705,O78
245,O25
565,075
10,590,269
567 ,417
14,549,552
60,000
553,806
The 2015-16 fiscal year Capital Projects Program budget was increased at mid-year to provide
additional appropriations ($250,000) needed for initial traffic and safety improvements in the
vicinity of the new Hoover Elementary School, as well as a feasibility study for sidewalks
construction in the area. The 2016.,17 fiscal year budget is based on the CIP (Capital
lmprovement Program) as presented earlier this year, with the addition of $200,000 to address
high-priority ADA (Americans with Disability Act) improvement projects. A complete
presentation ot 2016-17 fiscal year Capital Projects Program activities has been prepared by
Public Works for this (May 11, 2016) Budget Study Session.
Note that both the current year and FY 2016-17 transfers to the Renewal and Replacement
Reserve will not be included as Capital Projects Fund appropriations. This will occur once the
funding for a specific capital project is determined, and a budget for the project is established
within the Capital lmprovement Program. Although deferred infrastructure maintenance must
be avoided for a truly sustainable budget, it is difficult to determine the appropriale annual
investment into comprehensive maintenance programs and the Renewal and Replacement
20
FY 201&17 Budget May 11, 2016
Although the General Fund is the main operating fund of the City, the City utilizes various
enterprise, capital, internal service and special revenue funds to account for both governmental
and business-like activities. The activities accounted for in these other funds are significant and
wide-ranging. Staff analyzes all funds at least monthly to ensure that they are self-sustaining
and carry adequate fund balances for periods of uncertainty. The chart below shows initial
expenditure budgets for the City's larger funds for the 2016-1 7 fiscal year:
FY16-17
Proposed
Budget
FY 2016-17 Budget May 11, 2016
Reserve that will provide for assets that retain a targeted condition level. But it is clear that
past investment in infrastructure has not been adequate. The $3 million transfer to the
Renewal and Replacement Reserve serves as a placeholder, representing an affordable
investment in these here{o-fore unfunded infrastructure projects. 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.
The City's Water and Sewer Enterprise Funds remain healthy. Since the Governor's
emergency drought measures announced in April of last year, staff has continued to monitor
conservation goals that have been announced by the State Regional Water Resources Control
Board needed to meet the State's drought mandates and educate the public about these
requirements. City residents have continued to conserve water well beyond the State's
mandate, serving to somewhat offset the impact of the most recent 7.8 percent rate increase in
January 2015, which was required to meet ongoing operations and maintenance, capital and
debt service needs. While no rate increase was enacted this past January, the City is currently
undergoing a rate study to determine the impact of continued conservation efforts, the San
Francisco Public Utilities Commission (SFPUC) wholesale water rates, the applicability of the
City's tiered rates structures to Proposition 218, and ongoing capital needs.
At mid-year, staff did not alter the $15.8 million revenue budget for the water fund, keeping it in
line with prior year actual revenues. The 2016-17 fiscal year budget currently reflects the same
revenues for water sales, as the impact of rate changes and water conservation by customers
is currently unknown. As water consumption patterns are linked to sewer revenue, the City has
proposed a flat revenue estimate for the Sewer Enterprise as well. Both revenue assumptions
wilf be revisited in fiscal yeat 2016-17 after a careful review of the actual impacts of
conservation and the results of the rate study.
Gas Iax (HUTA) - This fund is used to account for the revenue received from the State of
California derived from gasoline taxes. These funds may only be used for street purposes as
specified in the State Streets and Highways Code, and so they are an important revenue source
for the City's Streets Capital lmprovement Program. The projection of Highway Users Tax
(HUTA) revenues is complex, with differing allocalions derived from various sections of the
Code, and differences in the allocation of gasoline tax revenues from diesel and fuel use tax
revenues. 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. Due to the nature of these allocations, this revenue source is erratic from
year to year. ln the ups and downs of the HUTA formulas, the FY 2015-16 allocation reflected a
reduction for a prior year over-colleclion of excise tax revenue as well as a downward trend in
taxable sales of gasoline. Based on the very low price of gasoline currently, forecasters
suggest that FY 2016-17 will provide yet another reduction in this revenue source; an estimate
21
ln mitigating these revenue risks to both enterprises, the City has continued to manage costs.
The Water Enterprise Fund budget has increased by approximately 5 percent, and the Sewer
Enterprise Fund by 1 percent. As of the date of this staff report, the SFPUC has proposed a
9.3 percent increase in the cost of wholesale water; this will be factored into the City's rate
study, to be presented to the Council for consideration in late summer 2016.
FY 2016-17 Budget May 11, 2016
of 92 percent of the city's 201 5-16 allocation is proposed ($618,000). lf new estimates are
provided by the State, staff will update this projection prior to the June budget presentation.
lnternal Service Funds
charges to departments provide revenue to the city's lnternal service Funds (lSFs), which
reflect an allocation of the City-wide costs of various activities. For example, in the budget for
the Administrative/ lnformation Technology Services lSF, there is an increase of 2.5 percent
in the contract for lT services with Redwood City. Also, the cost of a five-year extension for the
Shoretel/Packet Fusion City-wide phone system is included in the proposed budget. Staff also
plans to investigate a new records management system that will Serve all departments; a
$3O,OOO appropriation is proposed to initiate this project in FY 2016-17. And, a.25 FTE
increase was added to the proposed budget to assist with development of the new website.
The Facility Service Fund budget increased due to an increase in operating costs, such as
janitorial expenses. Also, funding is proposed ($50,000) for the services of a contract project
manager, due to the increase in the number of facilities projects to be pursued. ln the
EquipmenUFleet Services Fund, adjustments were made in the current fiscal year to cover the
replacement of certain vehicles that were postponed in prior years. Total allocations (charges to
departments) for this fund increased 7. 1 percent.
This is the third year that the Risk Management lnternal Service Fund (lsF), which had
previously been used to account for both the City's Workers' Compensation and General
Liability prograrns, was split to beter account for each of these insurancetype activities. Each
of the funds continues, through interdepartmental charges, to allocate the cost of these
insurance programs to the appropriate activities, based on frequency and severity of claims.
Although actual demands on insurance funds can fluctuate significantly from year to year, the
use of actuarial valuations allows for a fairly level funding of the liabilities associated with each
program.
Generat Liability claim developments finally began to level off after several years of increased
liability valuations; as a result, charges to departments for the General Liability Internal Service
Fund have decreased considerably in recent years. As confirmed in the current fiscal year's
mid-year review, recent improvements in the administration of the City's Workers'
Compensation Program have greatly stabilized this fund as well. As a result, charges to
departments for insurance activities proposed tor FY 2016-17 have increased only slightly when
compared to those in the current fiscal year. Both funds will be closely monitored going foruard.
The OPEA (Other Post-Employment Benefits) lnternal Servrce Fund was established in the
201 3-14 fiscal year to account for the funding of accumulated retiree medical benefits. The City
makes periodic contributions to the California Employers' Retiree Benefits Trust Fund (CERBT),
an irrevocable trust fund established specifically for this purpose, based on a percentage of
payroll. Revenues to the City's OPEB fund are comprised of these "percentage of payroll"
charges to departments, which are projected to be approximately $4.6 million in fiscal year
2016-17. Expenses of the fund include payments of actual retiree medical premiums and costs
of the program's third party administrator (approximately $3.0 miltion), with any remainder funds
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May 11, 2016
being sent to the CERBT. Funds deposited in the CERBT account established for Burlingame's
OPEB obligations will be invested with like funds in order to accelerate the pay-off of the City's
liability. Once pay-as-you€o demands exceed the internal charges to departments (estimated
in fiscal year 2023-24), the trust fund will be drawn upon to cover the retirees' medical premium
payments.
A summary of the external trust (CERBT) account is shown below:
City of BurlingameAccount 3ummary as of ilarch 31, 2016
lnitial contribution (10/1 0201 3)
Additional contributions
Disbursements
CERBT expenses
lnvestment earnings
Total assets
Average annualized internal rate of return (rorroz0rrl/3r/20r6)
$4,000,000
$5,227,443
($0)
($20,525)
$638,672
$9,845,590
3 36%
Note that current year payments from the City's OPEB fund for retiree medical premiums will
also serve to reduce the City's OPEB liability, further improving the funded status of these
obligations. Staff will compare the performance of the CERBT to other (qualified trust)
investment vehicles available and the CERBT investment strategy currently selected by the City
for its trust account before providing any mid-year recommendation for changes in the trust fund
provider or fundingiinvestment policies.
ln recent years, the City has grappled with prioritizing a significant lisl of unfunded needs,
largely in the area of City facilities. The City Council ranked a new downtown parking garage as
the highest priority, followed by a new Community Center and City Hall improvements. As
funding options have been pursued, other capital needs have been identified that will require
funding as well as stretch the organization's capacity in the fulure, such as the Broadway Grade
Separation pOect.
ln order to facilitate the funding of some of these p@ects, the City has explored whether it can
partner with private developers to build one or more parking garages and a City Hall at little or
no cost to the City. ln addition, staff has worked with its financial consultant to help determine
how to fund projects such as the Community Center that may require some type of voter-
approved funding mechanism. To date, no decisions have been made about any of the
potential public-private partnerships or tax mechanisms. The City continues regular
FY 2016-17 Budget
Unfunded Needs
May 11,2016
investments in building maintenance and infrastructure maintenance through the five-year ClP,
but this approach has not proved to be sufficient in averting further unfunded needs.
To the extent possible, funds are being set aside in the City's Renewal and Replacement
Reserve with the Capital Projects Fund- The reserve balance as of the end of the current fiscal
year is anticipated to be $13.5 million. However, the reserve is being funded by annual
surpluses and one-time 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 assessing the City's long{erm fiscal health.
General Fund Five-Year Financial Forecast
The five-year forecast was last updated with the fiscal year 2015-16 mid-year report in
March. General Fund revenues reflected in the initial fiscal year 2016-17 budget vary from
the five-year forecast by less than one percent in total. General Fund expenditures are
approximately 2 percent less than poected tor FY 2016-17 in the forecast. Where the five-
year forecast anticipated a $2.8 million surplus for fiscal year 2016-17, this initial budget
shows a $2.9 million surplus. For all intents and purposes, the assumptions of the five-year
forecast remain in place. Staff will continue to monitor economic conditions and analyze
events that could impact the City's future revenue or expenditure composition. Changes that
significantly alter the City's longterm projections will be brought to the Council's atlenlion.
The preliminary General Fund budget for the 2016-17 fiscal year calls for projected revenues of
$65.8 million, with expenditures and net transfers out of $59.9 million. Though balanced, this
preliminary budget cannot fully address the unfunded needs identified in previous budget
discussions. As these unfunded needs generally reflect the long{erm degradation of City
facilities and other infrastructure, it is unclear as to whether the budget can be considered
sustainable over the long{erm. The preliminary budget does provide for an additional $3 million
transfer out of the General Fund to the Capital lmprovement Projects Fund in order to increase
the Renewal and Replacement Fund, to help curb the creation of additional capital needs. The
General Fund balance is estimated to be $29.7 million at the end of fiscal year 2016-17 .
The budgets for all other funds have been equally reviewed and analyzed in the context of long-
term fiscal planning. At this time, these funds appear to be self-sustaining, with operations that
FY 201617 Budget
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-sustain ing, they can indicate a
drag on the City's General Fund operations. To avoid such a condition, long{erm plans are
updated frequently, and any changes in the outlook of these funds are brought to the City
Council's attention through the budget, mid-year analysis, and financial reporting processes
currently in place.
FISCAL IMPACT
FY 2016-17 Budget May 11, 2016
do not pose a threat to the City's long-term fiscal health. More detail on each of these funds will
be provided in the final 2016-17 Budget document.
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