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HomeMy WebLinkAboutMin - CC - 2016.03.16 Burlingame City Council March 16, 2016 Approved Minutes 1 BURLINGAME CITY COUNCIL Approved Minutes Mid-Year Budget Meeting on March 16, 2016 1. CALL TO ORDER A duly noticed mid-year budget meeting of the Burlingame City Council was held on the above date in the City Hall Council Chambers. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Burlingame resident Sandy Comaroto. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz MEMBERS ABSENT: None 4. PUBLIC COMMENTS, NON AGENDA No comments. 5. INTRODUCTIORY REMARKS – Lisa Goldman, City Manager City Manager Goldman gave an overview of the presentations from Finance Director Augustine and Director of Public Works Murtuza. She stated that their presentations would focus on mid-year budget adjustments, the five-year forecast and next year’s proposed Capital Improvement Program. City Manager Goldman stated that overall the City is doing well financially. She explained that instead of spending the additional revenue over what was projected staff is suggesting investing the money in capital and reserves. 6. STAFF REPORTS AND COMMUNICATIONS a. ADOPTION OF A RESOLUTION AMENDING THE FY 2015-16 OPERATING AND CAPITAL BUDGETS TO REFLECT THE RECOMMENDED MID-YEAR ADJUSTMENTS AND ADOPTION OF A RESOLUTION FURTHER FUNDING THE RENEWAL AND REPLACEMENT RESERVE IN THE CITY’S CAPITAL PROJECTS FUND Finance Director Augustine reviewed her staff report. She stated that the purpose of the mid-year report is to inform the Council and the public as to the City’s status midway through the fiscal year, update the budget based on projected results and provide a more precise financial picture entering into the next fiscal year budget. Burlingame City Council March 16, 2016 Approved Minutes 2 Finance Director Augustine began by explaining necessary mid-year budget adjustment. She used the projected revenues chart (found on page 9 of the staff report) explaining that not all the revenue categories are growing at the same rates and that different factors are impacting the various revenue categories. Changes in each of the revenue categories are explained in Attachment A of the staff report. She stated that most of the revenue categories are expected to come in higher than anticipated, except for miscellaneous revenue which includes the one-time payment for the Burlingame Point Project. Finance Director Augustine stated that overall general fund revenues are expected to be up 7.1%. Next, she reviewed in detail the three main revenue sources (property tax, sales tax and TOT) that make up over 85% of the City’s general fund resources. She explained that the housing market continues to be strong in the Bay Area despite a lack of inventory. Assessed property values continue to rise, increasing in the City of Burlingame by 6.8% in each of the past two fiscal years. Therefore, in this category an amendment needs to be made for the additional $816,000 in revenue beyond what was projected. Finance Director Augustine explained that the largest piece of the additional revenue was the County’s refund from the Educational Revenue Augmentation Fund (“ERAF”). She explained that the County continues to warn that as funding for education grows and other State commitments are satisfied through the ERAF funds, excess ERAF distributions could decline significantly, and even be eliminated. However, while the City’s distribution was approximately $100,000 lower than in the prior year, funds were conservatively budgeted, and a $500,000 mid-year increase is proposed. Finance Director Augustine explained that sales tax revenues are exceeding pre-recessionary levels. This year sales tax revenues are expected to be $1.6 million or 14.3% higher than projected. She explained that TOT, Burlingame’s largest general revenue source (38%), is expected to be $2.1 million or 9.1% higher than projected. Finance Director Augustine explained that as part of the mid-year analysis of the general fund, all departments were asked to examine their year to date budget to actual reports and report any areas where staff may need additional funds. As well, department heads were asked to identify any areas of savings. She explained that there are not a lot of expenditure adjustments this year. Moreover, most of the adjustments were offset by savings from other departmental expense items. She explained that the three large expenditure adjustments were: (1) an increase in the City’s contribution to the CALPERS safety pension plan; (2) $250,000 for CIP projects relating to the Hoover School area; and (3) $2.5 million transfer to the Renewal and Replacement Reserve to reflect the decrease in General Fund Catastrophic Reserve. Next, she explained the chart which is at the bottom of page 12 of the staff report. This chart compares the prior year fund balances with the projected mid-year fund balances after the changes identified in the mid- year report are made. She stated that originally revenues were projected to exceed expenditures by less than $1 million. However, once the proposed changes are done, staff expects revenues to exceed expenditures by $2.5 million. This leaves the City a projected fund balance of $31,746,535. Therefore, after funding the Economic Stability Reserve, staff also recommends funding the Renewal and Replacement Reserve with an additional $5 million. This would leave an unassigned fund balance of $ 13.5 million. She explained that staff is recommending that some of the unassigned funds be earmarked for sidewalks and ADA improvements throughout the city. Finance Director Augustine briefly covered changes in other funds such as Water and Sewer. She stated that while the drought has impacted the Water and Sewer funds, staff is not requesting any adjustments at this time. Burlingame City Council March 16, 2016 Approved Minutes 3 Councilmember Colson asked if the Renewal and Replacement Reserve fund is a one-way street. Finance Director Augustine explained that the Renewal and Replacement Reserve was setup because of the numerous unfunded facility projects in the City. City Manager Goldman stated it is the Council’s prerogative to determine the best use of the money that is in that fund. Vice Mayor Ortiz asked about the huge bump in the business and industry column for sales tax. Financial Director Augustine stated that it is an anomaly that will not re-occur. Councilmember Beach asked about the decrease in the Catastrophic Reserve Fund. She explained that while she understood that ABAG was exploring different insurance vehicles, should the City keep the money in the fund until an insurance vehicle is selected. Financial Director Augustine stated that GFOA recommended decreasing the City’s Catastrophic Reserve Fund based on the actual costs of emergencies in the Bay Area. City Manager Goldman stated that if a terrible catastrophe did occur, that could not be covered by the fund, the unassigned fund balance could be used. Financial Director Augustine discussed the five-year forecast. She reviewed the Economist Intelligence Unit’s graph which forecasts the percentage change in real GDP growth from year to year for the Country. She explained that last year the graph was very different, showing a growth of 3% for 2015. But this year economists agreed 2015 ended at 2.4% and that economic growth below 3% is the new normal. She reviewed property tax assumptions for the next five years. She stated that there is a 5.97% growth in the assessed value of property in Burlingame since the prior year. However, she explained that the turnover in the market is low, and inventories are down 23% from a year ago. As well, she explained that while major real estate developments will have an impact over time, the assumption is they will not be ready in the next five years. Furthermore, Finance Director Augustine explained that the five-year forecast assumes a continued decrease in the ERAF refunds. Finance Director Augustine explained the make-up of sales tax revenues. She stated that autos and transportation represent the largest piece of sales tax revenue at 32.8% of the total. She explained that staff is projecting a growth in sales tax of 5.8% this year and 2.9% next year. She also discussed TOT which is the City’s largest and most economically sensitive resources. She explained that the five-year forecast assumes a 3% growth in the next fiscal year. The forecast presumes that the number of hotel rooms stays stable and that there is a continued high cost per room. But, staff will continue to monitor receipts and revise forecast as necessary. Financial Director Augustine did an overview of the general fund expenditure forecast assumptions. She stated that there would be a continued general fund investment in capital projects equivalent to 2 points of TOT revenues. She reviewed personnel costs stating that the forecast shows a growth in salaries and wages at a level of 1-3% and that rates charged by CalPERS have risen in the past few years due to the impact on investment losses in fiscal year 2008-09. As well, she discussed the pre-funding of retiree medical benefits (“OPEB”). Overall, Financial Director Augustine showed that the general fund expenditure forecast is increasing at a more rapid rate than the City’s revenues. Councilmember Brownrigg thanked Financial Director Augustine for her work and asked how often the five- year forecast is revised. She explained that they do it at the mid-year review but if there are any changes necessary it would be revised. Councilmember Brownrigg stated he found the forecast to be a little disconcerting. He stated that while the City has always been conservative in their estimates of projected Burlingame City Council March 16, 2016 Approved Minutes 4 revenue, with the next five years in flux with varying economic factors, he would like a better picture of the state of the City’s economy. As well, he stated he was concerned about the increase in the rate of expenditure versus revenue. City Manager Goldman stated that just like the City is cautious with the projection of revenues they are also cautious by overestimating expenditures. Councilmember Beach asked about the increase in 2018-19 when the debt service is completed and whether the staff has any thought on putting some of that money towards the OPEB debt. City Manager Goldman explained that when the OPEB trust fund was set up there was a payoff schedule. Accordingly, she explained that it wasn’t necessary to pay more into OPEB. Vice Mayor Ortiz stated that while it is good we overstate our expenditures and understate our revenues he would like a clearer picture especially when the City is considering a bond measure. Mayor Keighran opened the discussion up for public comment, no one spoke. Councilmember Brownrigg made a motion to adopt Resolution No. 17-2016; seconded by Vice Mayor Ortiz. The motion passed unanimously by voice vote, 5-0. Councilmember Beach made a motion to adopt Resolution 18-2016; seconded by Councilmember Colson. The motion passed unanimously by voice vote, 5-0. b. REVIEW OF DRAFT FY 2016-17 GENERAL FUND, GAS TAX, MEASURE A, AND MEASURE M FUNDS CAPITAL IMPROVEMENT PROGRAM (CIP) DPW Murtuza presented his staff report concerning the proposed draft General Fund, Gas Tax, Measure A, and Measure M Funds Capital Improvement Program. He stated that over the past several months staff conducted a needs assessment of various infrastructure owned by the City. As a result, staff is recommending $4.485 million for CIP projects next year. Approximately $4.3 million is projected as the 2 points of the TOT. Therefore staff is asking Council to authorize an additional $185,000 from the General Fund’s unassigned fund balance to cover the difference. DPW Murtuza reviewed the sidewalk program stating that the City maintains 116 miles of sidewalks valued at $20 million. He explained that there is an estimated backlog of $7 million to $11 million in needed repairs. DPW Murtuza recommended $500,000 in repairs for the next fiscal year. As well, he stated that there is a $4 million estimated backlog in ADA curb ramps. He explained that about 1,280 ramps were needed citywide and that staff is recommending $100,000 be used to install 25-30 ramps in high use areas this next year. DPW Murtuza reviewed the Parks and Recreation projects staff is proposing for next year. He discussed Murray Field requesting $500,000 to develop, engineer and design synthetic turf fields. At Ray Park staff is asking for $350,000 to replace the aging playground equipment. At Southern Pacific Circle Plaza, staff is proposing $200,000 to plan and design safety improvements and extend the aesthetic streetscape of Burlingame Avenue. He explained that many of the other Parks and Recreation projects are restoration of fields and repairs. In total, Parks and Recreation projects will cost $1.575 million. DPW Murtuza discussed necessary building facility projects. He explained that the City maintains 20 buildings with over 200,000 sq. ft. He stated that staff is recommending $1.35 million in maintenance to Burlingame City Council March 16, 2016 Approved Minutes 5 these buildings to extend their life. Some of the projects that would be covered are: (1) police station fuel tank removal and replacement; (2) energy efficiency upgrades; (3) parking lots resurfaced at City Hall, Recreation Center, Corp Yard and Police Station; (4) general facilities upgrade per the Master Plan; (5) ADA improvements; (6) Stormwater Pollution Prevention Plan; (7) Community Development Department remodeling; and (8) Washington Park Grandstand remodeling. Next DPW Murtuza discussed the proposed traffic safety improvements. The first project involved potentially putting in a traffic signal at the intersection of Oak Grove Avenue and Carolan Avenue. He explained that traffic going eastbound on Oak Grove has the right of way, while the 3 other points have stop signs. Accordingly, staff is looking into putting a traffic signal in at this intersection. However, the traffic signal will have to coordinate with the traffic signal at California Drive and interconnect with the railroad preemption system. As well, staff is recommending city hall area traffic and pedestrian safety improvements, funding for the El Camino Real stakeholder process, and funding for future traffic studies. DPW Murtuza explained that under the Gas Tax Measure A and M Funds, staff is looking at $2.7 million in various street improvements. He explained that the City maintains 84 miles of streets valued at $80 million. He stated that there is an estimated backlog of repairs costing $19 million. He stated that $2.5 million would be used as part of the annual street resurfacing program and $200,000 would be used for citywide street curb and gutter replacement program. As well, DPW Murtuza stated that Council should consider setting aside funds for sidewalk and ADA improvements, Hoover school area sidewalk improvements, building facilities improvement and Broadway Grade Separation. Mayor Keighran asked when Council would receive the feasibility study results on the Hoover School improvements. DPW Murtuza stated that he believed he would have results in 4-6 months to show the Council. Mayor Keighran asked the City Manager if the school district is incorporating questions about Hoover School improvements in their bond polling. City Manager Goldman stated she was not aware of Hoover being included. Mayor Keighran asked if City Manager Goldman would talk to the school about including these questions. She replied in the affirmative. Mayor Keighran asked about the Broadway Grade Separation and if and what the local match requirement would be. DPW Murtuza stated that based on other projects where staff asked for federal funding, he believed it would be $15-$20 million required from the City for a local match. Councilmember Colson asked if a resident wanted to repair their own sidewalk could they. DPW Murtuza explained that they could and all they would need to do is apply for an encroachment permit at City Hall. Councilmember Colson asked about the fuel tank removal at the Police Station. She stated that based on personal experience she was concerned that the cost might rise. DPW Murtuza explained that the funding staff was requesting was to assess the issues and costs associated with removing the tank. Councilmember Colson and Vice Mayor Ortiz stated their appreciation that Public Works would be looking at improving the intersection at Oak Grove Avenue and Carolan Avenue. Burlingame City Council March 16, 2016 Approved Minutes 6 Vice Mayor Ortiz asked about the Murray synthetic field. He asked if the City would look into having a private partnership to assist in the cost. Parks and Recreation Director Glomstad stated that when staff had previously discussed a partnership with a few organizations they had been interested in grass fields. Accordingly, she would ask them about synthetic fields. Councilmember Beach asked about the Southern Pacific Circle Plaza improvements. Parks and Recreation Director stated that the improvements will continue the work that was done on Burlingame Avenue, make the intersection safer, ADA compliant, and create a seating/meeting area. Councilmember Brownrigg discussed his concern that the engineering work for Murray Field costs $500,000. DPW Murtuza explained that the fields are not in good shape and that there is a lot of work that needs to be done underground since it was built on a landfill. As well, he stated that the drainage system for synthetic turf is specialized. Councilmember Brownrigg asked if the $500,000 includes prep-work or is it just for studies. DPW Murtuza stated it is prep-work, design and studies. Councilmember Brownrigg stated that Council shouldn’t spend $500,000 on the initial work without deciding if they wanted to commit to synthetic fields. Councilmember Brownrigg stated that the school district and City should agree to split the costs of the improvements to the Washington Park Grandstand. As well, Councilmember Brownrigg asked if Measure A funds could be used for curb cuts, ADA compliance and sidewalk improvements. DPW Murtuza stated that no, Measure A could only be used for roadway purposes. Councilmember Brownrigg stated that he would support more money for ADA. Mayor Keighran opened the item up to the public, no one spoke. Mayor Keighran stated that she felt synthetic turf at Murray Field was a good idea as the City fields are over utilized and in bad shape. Councilmember Colson stated she would support synthetic turf at Murray Field. She explained that she had been involved in scheduling for the past ten years at that field. She stated it is overused, and that the field is not in good shape. Accordingly, she explained that with synthetic turf the fields would be open for longer hours and could be utilized year round, alleviating some of the scheduling issues. Vice Mayor Ortiz stated that after spending a lot of time at Murray Field that it is becoming a safety concern. Accordingly, he felt that the turf was a good alternative. Councilmember Beach stated that she felt it was a great investment for the community. Councilmember Brownrigg asked what the turf will cost. DPW Murtuza stated the preliminary estimate is $1.4 million. Accordingly, Brownrigg stated that in his opinion it is a $2 million investment today and shouldn’t be thought of as $500,000. City Manager Goldman stated this is a potential project to be included in a tax measure. Mayor Keighran stated that in terms of the Broadway Grade Separation she would hope that the $5 million the City spent on the Broadway Interchange would be included in the matching funds. Mayor Keighran also stated that she liked the idea of a 50/50 for the cost of the Washington Grandstand improvements. Burlingame City Council March 16, 2016 Approved Minutes 7 Councilmember Beach asked the Council if they felt the Southern Pacific Circle Plaza improvements were a priority. Vice Mayor Ortiz stated that in his opinion this is an important part of the City and that he supports finishing the Burlingame Avenue streetscape. Councilmember Brownrigg stated he felt the $200,000 towards the development of the Southern Pacific Circle Plaza should be devoted to ADA compliance. Councilmember Colson stated that for her making that intersection safe was a priority as a number of students use that intersection to get to school. Mayor Keighran stated she looked at the project as a safety issue that needs to be completed. Councilmember Brownrigg stated that part of the unassigned funds should be put into ADA compliance. City Manager Goldman stated that staff would need to look at what Public Works can accomplish. Accordingly, she explained that staff would come back in May with some thoughts about what could be done and what it would cost. 7. ADJOURNMENT Mayor Keighran adjourned the meeting at 8:32 pm. Respectfully submitted, /s/ Meaghan Hassel-Shearer City Clerk