HomeMy WebLinkAboutAgenda Packet - CC - 2019.05.08City Council
City of Burlingame
Meeting Agenda - Final
BURLINGAME CITY HALL
501 PRIMROSE ROAD
BURLINGAME, CA 94010
Council Chambers6:30 PMWednesday, May 8, 2019
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 fill out a "request to speak" card located on the table by the door and
hand it to staff, although the provision of a name, address or other identifying information is
optional. Speakers are limited to three minutes each; the Mayor may adjust the time limit in
light of the number of anticipated speakers.
All votes are unanimous 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 period. The Ralph M .
Brown Act (the State local agency open meeting law) prohibits the City Council from acting on any matter
that is not on the agenda.
5. STAFF REPORTS AND COMMUNICATIONS (Public Comment)
Study Session: Fiscal Year 2019-20 Budgeta.
Staff ReportAttachments:
City Council Review of Draft FY 2019-20 Capital Improvement Programb.
Staff Report
Presentation
March 13, 2019 Staff Report
Attachments:
6. ADJOURNMENT
Page 1 City of Burlingame Printed on 5/3/2019
May 8, 2019City Council Meeting Agenda - Final
Notice: Any attendees wishing accommodations for disabilities please contact the City Clerk at
(650)558-7203 at least 24 hours before the meeting. A copy of the Agenda Packet is available for
public review at the City Clerk's office, City Hall, 501 Primrose Road, from 8:00 a.m. to 5:00 p.m.
before the meeting and at the meeting. Visit the City's website at www.burlingame.org. Agendas and
minutes are available at this site.
NEXT CITY COUNCIL MEETING
Next regular City Council Meeting - Monday, May 20, 2019
VIEW REGULAR COUNCIL MEETING ONLINE AT www.burlingame.org/video
Any writings or documents provided to a majority of the City Council regarding any item on this agenda
will be made available for public inspection at the Water Office counter at City Hall at 501 Primrose
Road during normal business hours.
Page 2 City of Burlingame Printed on 5/3/2019
STAFF REPORT
AGENDA NO: 5a
MEETING DATE: May 8, 2019
To: Honorable Mayor and City Council
Date: May 8, 2019
From: Carol Augustine, Finance Director – (650) 558-7222
Subject: Study Session: Fiscal Year 2019-20 Budget
RECOMMENDATION
The purpose of this report is to give an overview on the development of the 2019-20 fiscal year
budget, and receive Council comment and direction. No Council action is required.
BACKGROUND
Development of the fiscal year 2019-20 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. As always, this important effort should reflect the priorities and
needs of the Burlingame community. As in each annual budget process, guided by Council
discussion, City staff has endeavored to identify resident priorities and make sure those priorities
are reflected in each of the department’s budget proposals.
Although a summary of current economic conditions was provided with the mid-year report in
March, an updated summary is intended to give context to the upcoming fiscal year revenue
forecast. Any major changes from the mid-year forecast and results of prior fiscal years are
identified and explained.
The economy in the Bay Area has experienced marked improvement since the Great Recession
that started in 2008. While significant growth has occurred, the City continues to be ever
cognizant of the uncertainty that results from the ebbs and flows of the economy, including
continued ambiguity surrounding federal policy and the possible impact on the State of California
and its local agencies. Staff remains focused on establishing fiscal policies that will sustain
Burlingame’s long-term financial strength through all economic environments, while continuing
the transparent, accountable stewardship the community expects and deserves. The City has
sought to identify any unfunded liabilities and aggressively set aside funds to decrease the burden
of such legal obligations on future year budgets. In 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. Annual budget appropriations provide funding of
day-to-day operations, prior year liabilities, and currently unfunded facilities and infrastructure
projects. However, the budget will necessarily reflect limited fiscal/staff capacity to take on new
priorities, unexpected opportunities, or needs identified by the public for which there is no funding.
FY 2019-20 Budget May 8, 2019
2
DISCUSSION
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 2019-20 fiscal year.
National Economy
Data from the Bureau of Economic Analysis (BEA) showed the nation’s economy continuing to
hold promise after a year of moderate growth in 2018. U.S. real GDP increased 2.9 percent in
2018, a modest uptick from 2017 and 2016, and the highest rate since 2015. The U.S economy
continued to grow in the first quarter of 2019 – at an annualized rate of 3.2 percent. Growth was
mainly supported by personal consumption expenditure, private inventory investment, state and
local government spending, and nonresidential fixed investment. Exports had a good year as
well, despite ongoing trade disputes with key partners. This measure of the nation’s economic
growth indicates a slightly faster pace than experienced in previous years, reflecting relative
strength in the global economy. According to Beacon Economics, a leading independent
economic research and consulting firm, the economy will continue to grow in 2019, but at a slower
rate than last year. Although public sentiment about the U.S. economy has turned grim in recent
months, according to Beacon Economics’ forecast, nothing on the near-term horizon has the
capacity to cause a downturn, much less a recession. The forecast calls for U.S. economic growth
to slow to the low 2 percent range only because the rush created by the fiscal stimulus tax plan
of 2017 is wearing off, which was anticipated. “Weaker-than-normal numbers in certain economic
data” per the forecast, is seen to be “in line with the normal ebb and flow of economic growth
rather than any bellwether of an impending downturn”.
FY 2019-20 Budget May 8, 2019
3
The U.S. unemployment rate was 3.8 percent in March 2019, which is largely accepted as full
employment, as a result of a tight labor market and more full-time hiring. This low rate has
remained stable throughout the past year, as shown in the chart below. Yet job growth remains
steady, exhibiting strong fundamentals in the labor market. Most economists anticipate that
national unemployment will remain low in the upcoming fiscal year.
US retail trade jumped 1.6 percent from a month earlier in March 2019, following a 0.2 percent
drop in February. This marked the biggest increase in retail trade since September 2017, boosted
by sales of motor vehicles and a range of other goods. And U.S. consumer confidence indices
remain quite high, suggesting that consumers are poised to keep spending, spurred by a tight
labor market, record stock values, and lower mortgage rates.
SEASONALLY ADJUSTED US UNEMPLOYMENT RATE
U.S. RETAIL SALES
FY 2019-20 Budget May 8, 2019
4
Housing has always been an important indicator of the U.S. economy. It has been a leading
indicator of economic growth for the majority of business cycles over the past 70 years. But the
housing market has been flat for some time. According to data from the U.S. Bureau of Economic
Analysis, economic activity in the residential real estate sector has changed very little for two
years, either up or down. Although the available inventory of homes is quite low nationally,
interest rates have stabilized and will likely remain in their current range for a while. The concerns
for the housing market for the future evolve around the rapid pace of population movement within
the United States from the Northeast and Midwest to urban areas in the South and West – areas
that have numerous constraints to a swell in housing construction. This being the case, there has
been a greater utilization of existing housing stock rather than a significant increase in building
permits, resulting in tighter inventory and higher prices. But, again per Beacon Economics, the
fundamentals of today’s housing market – including affordability, vacancy rates, credit quality,
household incomes, and debt levels – are solid. In conclusion, “the current slowness in the U.S.
housing market is not a downturn in any broader sense, nor will it turn into one. On the contrary,
all the market worry is much ado about nothing and as 2019 advances, market activity will start
to pick up again.” Obviously, while reassuring from a national economic perspective, this outlook
is not necessarily valid on a regional level.
State Economy
California saw continued economic growth in 2018 and early 2019. The gross state product grew
by 3.5 percent through the first three quarters of last year, with significant contributions from
technology, real estate, and manufacturing. Health care, construction, transportation, and
warehousing made smaller contributions. The state and many of its metro areas continue to be
at or near record lows in terms of unemployment rates. The statewide rate was 4.2 percent in
January, coasting just a bit above the all-time low of 4.1 percent for several months running.
Increases in California’s labor force have kept the unemployment rate above the 4 percent
threshold: California added 246,400 jobs in January, equivalent to a 1.4 percent increase from
one year earlier.
FY 2019-20 Budget May 8, 2019
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Consistent with an unemployment rate that has been low on a sustained basis, paychecks have
been on the rise. Average hourly earnings in California rose 4.8 percent year-to-year in January
2019, following a 5.5 percent gain in December. Job gains in external income-generating
industries such as technology, transportation, manufacturing, and tourism also contributed to the
state’s foreign trade picture. Though challenged over the past year by uncertainty surrounding
U.S. trade policies, as well as a strong dollar, the state’s merchandise exports rose by 3.8 percent
in 2018.
Despite sustained growth in the California economy, the housing market struggled in 2018; that
weakness carried into early 2019. Existing home sales fell by 12.6 percent from January 2018 to
January 2019, while the median home price increased just 2.1 percent to $539,000, according to
the California Association of Realtors. The 30-year fixed mortgage rate hit nearly 5 percent in
mid-November, the highest in years, but has since retreated to just above 4 percent. This bodes
well for the peak season of 2019.
Still, with California’s economy at full employment, construction labor is expensive and limited in
availability. At the same time, other construction inputs like lumber are likewise scarce and costly
to acquire. But looking beyond the near-term performance of the housing market, California’s
new Governor and the State Legislature have focused directly on the state’s chronic housing
shortage, struggling to forge a comprehensive solution to the state’s deep-rooted housing
problem. On this subject, Beacon Economics states, “At stake is California’s economic future,
which is increasingly jeopardized by the high cost of housing. But while Sacramento is searching
for solutions to this stubborn problem, it must also face the reality that land use decisions, such
as those related to new housing, have historically been under the purview of local officials and
local zoning regulations.” They go on to suggest the situation be pursued “with both a sense of
urgency and a heavy dose of patience.”
Beacon Economics expects median home prices to rise moderately in the coming year. In
addition, its current forecast calls for residential permits to exceed 130,000 new units next fiscal
FY 2019-20 Budget May 8, 2019
6
year, and gradually increase thereafter. However, these new units are not expected to be enough
to stem the tide of under-supply in the state.
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, but the region is simply referred to as San Francisco in their analysis.
From January 2018 to January 2019, total nonfarm employment in the San Francisco MD
increased 3.8 percent to reach 1.2 million jobs, outpacing every major metro area in California,
including its neighbors in the East Bay (1.3 percent) and the South Bay (2.4 percent). The 42,600
expansion in payroll jobs helped keep the region’s unemployment rate among the lowest in the
nation, although the rate has trended up from its May 2018 trough of 2.15 percent in response to
large increases in the local labor force.
The area’s Construction sector experienced the most growth at 9.1 percent; the Professional,
Scientific and Technical Services sector experienced the largest absolute gain (+7.1 percent) over
the same period. The region’s Information Sector continued to post outstanding gains as it grew
by 8.8 percent. Beacon Economics is forecasting the unemployment rate in the San Francisco
MD to remain in a narrow range around its current reading through 2019. Total nonfarm
employment in the region is expected to expand in percentage terms by 2.8 percent over the year.
From the third to the fourth quarter of 2018, the median price of an existing single-family home in
San Francisco increased to $1.42 million from $1.41 million. At the same time, home prices in
UNEMPLOYMENT RATE IN SAN MATEO COUNTY
FY 2019-20 Budget May 8, 2019
7
neighboring Bay Area regions actually decreased slightly, despite an ongoing statewide housing
shortage. On a year-over-year basis, from the fourth quarter of 2017 to the fourth quarter of 2018,
San Francisco home prices increased by 5.6 percent, outpacing growth in the East Bay (4.5
percent) and South Bay (0.5 percent) over the same period. Home sales of existing single-family
residences in San Francisco declined 9.6 percent from the fourth quarter of 2017 to the fourth
quarter of 2018. This was presumably the result of a peak in the 30-year mortgage rates in
November 2018. Mortgage rates have since decreased, and home sales are expected to stabilize
or improve in the next few months as the market ramps up during peak season. Beacon
Economics expects the median price for an existing single-family home in San Francisco to
increase in 2019, but at a slower pace compared to the last few years.
From the fourth quarter of 2017 to the fourth quarter of 2018, average apartment rent increased
2.6% in San Francisco, hitting $3,128/month. Although this lags rent price growth in the East Bay
(4.1%) and the South Bay (4.8%), the higher year-over-year growth rates in neighboring regions
shouldn’t detract from the gravity of the rental situation in San Francisco. Specifically, a household
in the region would have to earn greater than or equal to $125,120 net annual, pre-tax income to
not be rent burdened, on average. Rent burden is defined as spending 30 percent or more of
monthly, pre-tax income on rent.
Because the San Francisco Metropolitan area continues to be one of the United States’ top tourist
destinations, Burlingame continues to see strength in hotel tax revenues and consumer spending.
With an 87.8 percent occupancy rate in the first eight months of this fiscal year, hotels in the area
are among the most occupied in the country. (The nationwide average for hotel occupancy rates
in 2018 was 66.2 percent.) Burlingame’s revenues from TOT (transient occupancy tax) were up
5.9 percent from the same period last year. All indications are that travel and tourism is alive and
well in the Bay Area. There are no current indications of any slowdown in this industry.
As in other cities in the region, spending on autos, general consumer goods, and restaurants has
been healthy for the past five years. Unfortunately, issues surrounding the implementation of the
State’s new computerized reporting system created shortfalls in the previous fiscal year, with
FY 2019-20 Budget May 8, 2019
8
corrections in the current fiscal year. This, and other one-time aberrations in sales transactions
resulted in Burlingame sales tax receipts in the 4th quarter of 2018 that were 13.0 percent higher
than the same quarter of the previous year (compared to an increase of 2.3 percent in the Bay
Area as a whole, and 2.8 percent for the statewide). Generally, the City experienced a solid
quarter for auto sales and rentals, building-construction supplies, and some categories of
business-related purchases. Auto sales in general levelled off from prior year activities, but this
category of transactions was skewed by a mass delivery on backorders by a single manufacturer
in the second half of calendar year 2018.
Again, although increasing incomes and wages among local residents have helped fuel taxable
sales, the high cost of housing in the region could impede growth in consumer spending in coming
years. As more and more residents spend a larger portion of their income on housing, less money
is left to purchase goods and services. In short, the state and local economic outlook is expected
to coincide with the national outlook of slow economic growth. The City Council has prioritized
housing issues, and continues working toward establishing policies that provide home ownership
opportunities and rental opportunities for below median income levels. In addition to policy
updates, such as provided in the new General Plan, the City Council has established commercial
linkage fees and residential impact fees to provide funding for future residential real estate
development and housing programs that support the socioeconomic diversity and stability of
Burlingame’s neighborhoods.
The transaction tax that resulted from the successful passage of Measure I in the November 2017
election became effective April 1, 2018. The tax will be used to fund additional safety services
and enhanced streets and sidewalk maintenance activities, as well as provide partial support to
the construction of a new Community Center, which is long overdue for replacement. Other
liabilities await funding, however. The deferral of maintenance to infrastructure and facilities has
resulted in an increase of projects on the City’s list of “unfunded needs.” In addition, the growing
cost of previously-incurred pension liabilities must be addressed: the establishment of a § 115
FY 2019-20 Budget May 8, 2019
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Trust for this purpose in 2017 was intended to prevent these costs from burdening operating
budgets in the next 5-10 years. The trust must be funded while the local economy is exhibiting
strength. Staff will strive to identify all deferrals and liabilities, and recommend their systematic
funding within the operating budget (of the appropriate fund) whenever possible.
General Fund
Burlingame’s fiscal year 2018-19 budget anticipated that the local economy would continue to
grow at a moderate pace, and the long-term forecast reflected relative stability for at least the
next several years. As in recent years of economic growth, departments were not required to
provide 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. As a result, General Fund
revenues were adjusted upward (approximately 4.7 percent) to reflect the most up-to-date
projections based on current economic realities, including one-time monies. Departmental
expenditures were increased only 0.5 percent. However, the City Council also approved an
increase of $3.1 million in transfers out from the General Fund, largely to fund priority capital
projects that either were not included in the adopted budget, or for some reason required
additional funding. The new projected unrestricted General Fund balance at the current fiscal
year end is $11.6 million. This result is approximately $3.2 million higher than projected in the FY
2018-19 budget, due largely to the actual $3.1 million net change in fund balance reported for the
2017-18 fiscal year.
The City’s 2018-19 fiscal year General Fund budget now reflects all of these mid-year budget
changes, with revenues anticipated to be over $3.5 million higher than projected in the FY 2018-
19 adopted budget. For fiscal year 2019-20, General Fund revenues are expected to grow to
nearly $78.6 million – a very slight (0.1 percent) overall increase. Although revenue projections
for the 2019-20 fiscal year are somewhat lower in total than the projections in the five-year
forecast presented with the mid-year report, the less than 1 percent difference is largely the result
of new projections for departmental charges for services. All General Fund revenues are
discussed in more detail in this report. Each revenue line item was refined to reflect existing and
anticipated changes in terms of the local economy. Departmental expenditure budgets remain
tight as well, deviating less than 1.6 percent from the recent five-year forecast.
In establishing departmental budgets for the upcoming fiscal year, emphasis was placed on the
desire to maintain current service levels, particularly in public safety, preclude any increase in
unfunded liabilities, and prepare to address the City’s current and future unfunded needs. As a
result, the initial expenditure budgets for the 2019-20 fiscal year continue to reflect significant
fiscal restraint on the part of all departmental operations, with a focus on long-term sustainability.
General Fund - Revenues
The following table shows the current forecast of fiscal year 2018-19 General Fund revenue
projections in the context of recent-year actual amounts and current-year estimated amounts.
The 2018-19 Adjusted Budget column includes the revenue amendments approved with the mid-
year report on March 13th. Although the fiscal year 2019-20 projections present a fairly flat
FY 2019-20 Budget May 8, 2019
10
revenue picture for the fund as a whole, many of the City’s revenue sources reflect improvement
over the current mid-year projections. Recall that sales tax revenues were overstated in the
current fiscal year because of aberrations in taxable sales and difficulties in implementing the
state’s new sales tax reporting system. In addition, property taxes were enhanced by
approximately $265,000 due to a change in allocation of the County’s excess Educational
Revenue Augmentation Fund (ERAF) monies. Combined with the receipt of new Measure I
monies, revenues appear to have swelled 9.4 percent in the current fiscal year. A careful review
of each revenue source shows that the apparent easing of General Fund revenues projected for
next year is due to corrections for current year abnormalities, and not an indication of impending
economic retraction.
Revenues from property taxes are expected to remain strong in the 2019-20 fiscal year. As of
the writing of this report, the tax roll established by the County Assessor’s Office shows a growth
of 5.91 percent in assessed value for the City of Burlingame over the prior year. (This includes
an inflation factor of two percent for all properties; the remaining growth is attributable to higher
assessed values of properties that have changed ownership over the course of the year.)
Although there is not a one-to-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.
However, the forecast for property tax revenues shows an increase of only 4.6 percent from the
current year’s property tax estimate due to a lower estimate of excess ERAF revenue. As noted
in the mid-year report for the current fiscal year, excess ERAF revenues are held by the County
of San Mateo and distributed when all other obligations of the funds have been met. Early each
January, the County allocates excess ERAF funds back to the jurisdictions that fund the ERAF.
Changes in the method of allocation (over a two-year, as opposed to a three-year, rolling period)
CITY OF BURLINGAME, CA
SUMMARY OF GENERAL FUND REVENUES
FY16-17
Actuals
FY17-18
Actuals
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
Property Tax 18,932,795$ 20,334,818$ 22,047,000$ 23,070,000$ 1,023,000$ 4.6%
Sales and Use Tax 12,089,288 12,819,794 15,470,000 14,760,000 (710,000)-4.6%
Transient Occupancy Tax 26,262,931 27,935,991 28,500,000 28,700,000 200,000 0.7%
Other Taxes
Franchise Tax 1,633,303 1,675,891 1,688,000 1,724,000 36,000 2.1%
Business Licenses 976,307 1,053,991 1,040,000 1,020,000 (20,000)-1.9%
State HOPTR 62,669 61,177 60,000 60,000 0 0.0%
Real Property Transfer Tax 352,108 425,143 520,000 420,000 (100,000)-19.2%
Licenses & Permits 88,069 84,030 81,000 79,500 (1,500)-1.9%
Fines, Forfeitures and Penalties 898,184 977,121 976,500 978,000 1,500 0.2%
Use of Money & Property 182,216 177,887 165,000 130,000 (35,000)-21.2%
Charges for Services 6,023,353 5,514,394 5,930,800 5,490,000 (440,800)-7.4%
Other Revenue 74,712 29,321 30,000 30,000 0 0.0%
Federal and State Subventions 281,916 300,709 186,600 140,000 (46,600)-25.0%
Interest Income 184,900 332,714 1,792,000 1,970,000 178,000 9.9%
Total, General Fund Revenue 68,042,749$ 71,722,980$ 78,486,900$ 78,571,500$ 84,600$ 0.1%
FY 2019-20 Budget May 8, 2019
11
resulted in a bump-up in these funds of nearly $265,000 in fiscal year 2018-19. This is a one-
time impact, as the City is merely receiving its share of ERAF refund more rapidly than in the
past. An ERAF refund of $2.1 million is anticipated for next fiscal year, as compared to over
$2.2 million received for fiscal year 2018-19. ERAF refunds are categorized as property tax
revenues, as each jurisdiction provides funding to the ERAF from property tax revenues. Other
property tax line item revenues, both secured and unsecured, are expected to remain strong.
TOT (Transient Occupancy Tax) 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 (2018-19) fiscal year was increased $550,000 (2.0 percent) to reflect
growth in receipts year-to-date. Hotels in the area continue to experience very high occupancy
rates (averaging 87.0 percent fiscal year to date through February 2019). The fiscal year 2019-
20 budget forecast anticipates a subdued rise of less than 1.0 percent in this revenue source,
despite the anticipated opening of the on-site 351-room Grand Hyatt hotel at SFO, expected to
open in July. Occupancy rates are expected to level off somewhat, and the average daily room
rate (ADR) of Burlingame hotel rooms is expected to rise moderately.
Sales tax receipts also reflected a fairly healthy economy this past year, despite the anticipated
slowdown in auto sales. Although this revenue source should reflect true economic activity,
several one-time events served to push anticipated sales tax revenues for the 2018-19 fiscal year
up to $15.4 million (excluding Measure I). As stated in the mid-year report, $743,000 of the
increase was largely the result of (1) resolution of delayed payments due to the CDTFA’s new
sales tax reporting software in the first two quarters of 2018; (2) resolution of manufacturing issues
allowing deliveries on backorders in the Auto and Transportation group; and (3) one-time use tax
receipts in building-related sectors associated with commercial development. Due to the one-
time factors involved, the City’s sales tax consultant projected a 5% decrease in these revenues
for fiscal year 2019-20. Without these adjustments to 2018-19 fiscal year revenues, the forecast
for the 2019-20 fiscal year reflects a 1.1 percent increase in taxable transactions.
Transaction data from the fourth quarter of calendar year 2018 is now available and supports the
fiscal year 2019-20 forecast. Sales taxes are expected to be much lower in the Auto and
Transportation sector, as well as the Building & Construction sector, than in the current fiscal year.
The anticipated decline is not particular to Burlingame, but largely the result of the FY 2018-19
one-time increases/adjustments at mid-year. The Auto and Transportation sector is still strong,
comprising 33 percent of the City’s local sales tax receipts. Sales tax receipts from the Fuel and
Service Stations sector are anticipated to increase only slightly in the upcoming fiscal year, as
higher gas prices offset last year’s one-time adjustments. Most other sectors are anticipated to
provide fairly level revenues compared to the current fiscal year.
FY 2019-20 Budget May 8, 2019
12
The proposed sales tax revenue budget for fiscal year 2019-20 is comprised of a projected $12.6
million in the Bradley Burns (local 1%), $160,000 in Public Safety Fund Sales Tax (Prop 172 sales
tax), and an estimated $2.0 million from the City’s ¼ cent Measure I transactions tax. Although
all three sources are reported as General Fund sales and use tax revenues, the Measure I
transaction tax is not applied to the same transactions as the other sales tax revenues. Measure
I monies are separately budgeted, and are recorded in a separate sub-fund to allow for maximum
transparency and accountability, and ease of presentation and audit for the Measure I Citizens’
Oversight Committee.
Finally, state and local agencies will begin to see a sales and use tax revenue boost following the
passage of AB 147, which will expand the collection of these taxes from out-of-state sales via the
implementation of the landmark U.S Supreme Court decision in South Dakota v. Wayfair in 2018.
The Wayfair decision addressed a longstanding problem associated with the rapid growth of
online sales, resulting in the under-collection of billions in local sales and use tax revenues across
the country. In Wayfair, the Court upheld a South Dakota statute that imposed a collection
requirement on out-of-state retailers who have specified levels of economic activity in the state,
even if they do not have a physical presence in the state. AB 147 provides important direction in
the law for implementation of Wayfair in California.
Digital commerce has been growing at over ten percent annually in recent years – more than four
times the pace of overall economic growth. California’s large size means that it is more likely that
on-line businesses already have a physical presence in the state and therefore have already been
collecting and remitting California sales and use tax. Nevertheless, uncollected sales and use
tax revenues are estimated to boost these revenues by 1.8-3.5 percent in the state. The taxes
would be distributed through state and countywide pools in proportion to the rest of taxable sales
within the county. The provisions of AB 147 requiring collection and remittance of sales and use
tax by out-of-state retailers became effective April 1, 2019. However, the marketplace facilitator
(firms that contract with sellers to sell goods and services on their on-line platforms) requirements
are effective October 1, 2019. Moreover, there are substantial hold-harmless provisions for
marketplace facilitators for compliance errors until January 1, 2023. No adjustment has been
FY 2019-20 Budget May 8, 2019
13
made to the fiscal year 2019-20 sales and use tax revenue projection as the result of the AB 147
implementation of the Wayfair decision.
As can be seen from the pie chart below, 84.7 percent of General Fund revenues (per the initial
fiscal year 2019-20 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
less than 2.2 and 1.3 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. Solid
waste rates were increased six percent as of January 1, 2019 due to increased costs for the
collection, disposal, and recycling processes since 2012 (the last time rates were raised);
additional 6 percent increases are scheduled for January 1, 2020 and 2021. Service volumes are
conservatively projected to remain level despite significant development activity, as service levels
can change. Although Gas and Electric utilization/consumption and rates have also increased in
recent years, changes to these line items are kept to a minimum in the fiscal year 2019-20
franchise fees projection for these utilities.
Property Tax,
29.36%
Sales and Use Tax,
18.79%
Transient
Occupancy Tax,
36.53%
Other Revenue,
15.33%
Property Tax
Sales and Use Tax
Transient
Occupancy Tax
Other Revenue
City of Burlingame
General Fund Revenue Composition
Proposed Fiscal Year 2019-20 Budget
FY 2019-20 Budget May 8, 2019
14
Business license taxes, generally $100 per business establishment, should also remain stable.
In addition, property transfer taxes, charged when properties change ownership, increased last
year. Although turnover in the real estate market has slowed, the cost of properties has risen.
These tax receipts are anticipated to remain at a recent five-year average of $420,000 in fiscal
year 2019-20, though even a small number of large property sales in the city could bolster this
line item revenue.
Licenses and permits consist largely of alarm permit fees and taxicab licenses. These
revenues, which account for less than one-half of one percent of total General Fund revenues,
are not expected to deviate significantly from current collections. Revenues from activities in the
category of fines, forfeitures and penalties are expected to level off now that “smart meters”
have been installed in the City’s downtown, reducing the number of citations issued. Although
compliance with parking restrictions throughout the city is necessary to support the safe and fair
turnover of the limited parking facilities available to residents, businesses, and customers, this is
an excellent result attributable to the convenience of the new meters.
CITY OF BURLINGAME, CA
FRANCHISE TAXES
FY16-17
Actual
FY17-18
Actual
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
Gas 114,755$ 129,951$ 130,000$ 156,000$ 26,000$ 20.0%
Electric 240,826 268,927 280,000 278,000 (2,000)-0.7%
Garbage 715,184 743,450 775,000 812,000 37,000 4.8%
AT&T Cable TV 449,851 433,554 410,000 390,000 (20,000)-4.9%
Wave Astound 24,138 23,979 23,000 24,000 1,000 4.3%
AT&T Video Service 88,550 76,031 70,000 64,000 (6,000)-8.6%
Total, Franchise Taxes 1,633,303$ 1,675,891$ 1,688,000$ 1,724,000$ 36,000$ 2.1%
CITY OF BURLINGAME, CA
CHARGES FOR SERVICES BY DEPARTMENT
By Department
FY16-17
Actual
FY17-18
Actual
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
Police 91,258$ 78,016$ 80,000$ 87,000$ 7,000$ 8.8%
Parks 153,036 116,197 177,000 120,000 (57,000)-32.2%
Recreation 2,827,667 3,008,863 3,192,000 3,000,000 (192,000)-6.0%
Aquatics 233,198 299,017 4,000 0 (4,000)-100.0%
Planning 875,259 555,671 951,500 837,000 (114,500)-12.0%
Public Works 1,192,274 658,704 775,000 679,000 (96,000)-12.4%
Library 640,983 784,985 742,000 758,000 16,000 2.2%
Other 9,679 12,940 9,300 9,000 (300)-3.2%
Total, Departmental Fees $6,023,353 $5,514,394 $5,930,800 $5,490,000 (440,800)$ -7.4%
FY 2019-20 Budget May 8, 2019
15
Revenues from charges for services decreased significantly in fiscal year 2017-18 due largely
to fees generated in the Public Works Department in the previous fiscal year from development
projects of higher structural complexity, requiring special permits that reflected significant staff
time. These Public Works activities returned to more normal levels in the past two years.
Planning service volumes increased this year, as reflected in the upward adjustment of these
charges for services of nearly $300,000. The largest impact to this category of revenues for the
General Fund’s FY 2019-20 budget is the result of the anticipated closure of the Recreation
Center in December 2019 to make way for the New Community Center Construction project.
Classes and events (as well as staff offices) will need to be relocated, and the effect on
registrations is largely unknown at this time. Further revisions will be made at mid-year, when
spring registration is well underway.
The Master Fee Schedule is being updated to keep up with the current cost of providing services,
and the revised schedule will be effective at the beginning of the 2019-20 fiscal year. The revenue
projection for this category as a whole has decreased nearly 10 percent from March’s five-year
forecast, based on the departmental projections for each revenue source as shown above.
Finally, interest income on the City’s investment portfolio is predicted to rise with increasing yields
on the City’s portfolio as well as an increase in the size of the portfolio. In the past year, the
average yield to maturity on the City’s portfolio has risen from 1.77 percent to 2.45 percent (as of
March 31st), a 38.4 percent increase. The size of the portfolio itself increased nearly $26 million,
or 16.7 percent. Because interest attributed to the City’s Capital Investment Reserve and other
governmental capital project funds is credited to the General Fund, these interest earnings should
continue to grow until the funds are appropriated to the City’s infrastructure needs.
CITY OF BURLINGAME, CA
INTEREST INCOME
Fund
FY17-18
Actual*
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
General Fund $1,231,106 $1,792,000 $1,970,000
Burlingame Avenue Assessment 6,888 7,000 8,000
Gas Tax Fund 14,206 23,000 25,000
Burlingame Avenue Assessment 16,303 30,000 33,000
Water Fund 270,995 398,000 438,000
Sewer Fund 288,190 423,000 465,000
Solid Waste Fund 78,402 75,000 64,000
Parking Enterprise Fund 141,363 208,000 229,000
Building Enterprise Fund 157,512 224,000 246,000
Landfill Fund 22,094 22,000 24,000
Worker's Compensation ISF 112,157 115,000 126,000
Facilities Services Fund ISF 7,025 6,000 7,000
Equipment Services Fund ISF 108,554 113,000 124,000
Information Services Fund ISF 13,538 12,000 13,000
General Liability ISF 75,169 72,000 79,000
Other Local Grants/Donations 0 4,000 4,000
Public TV Access Fund 8,649 8,000 9,000
Development Fees 103,094 78,000 86,000
Storm Drain Fund 224,329 283,000 311,000
Debt Service Fund 125,832 95,000 104,000
Total, Interest Income $3,005,406 $3,988,000 $4,365,000
*Excludes June 30, 2018 Mark-to-Market Adjustment
FY 2019-20 Budget May 8, 2019
16
As shown in the chart above, all funds are projected to benefit from higher interest earnings in
fiscal year 2019-20. Note that an assumption about the year-end “mark-to-market” adjustment is
not included in the City’s budget, and the FY 2017-18 actual interest earnings are shown without
that year-end adjustment.
Burlingame invests in only the safest of securities (the highest priority of the City’s investment
policy is preservation of capital), and last year the yields on many maturities of U.S treasuries
increased to highs not seen since 2008. However, in sharp contrast to the theme of slow, steady
rate increases that defined the Federal Reserve’s policy throughout 2017 and 2018, the Federal
Open Market Committee (FOMC) recently changed its stance, effectively putting future rate hikes
“on hold” for the time being. In fact, an interest rate cut by the end of the calendar year is a real
possibility.
The inversion of the U.S. Treasury yield curve, with the yield on the 3-month Treasury bill higher
than the yield on the 10-year Treasury note, makes it difficult to forecast future earnings for these
investments, which make up 22 percent of the City’s portfolio. However, the City will continue its
strategy (for its main portfolio) of broad diversification across the high-quality sectors permitted in
the portfolio, including federal agencies, corporate notes, negotiable CDs, and supranationals.
General Fund - Expenditures
The following table shows the proposed fiscal year 2019-20 General Fund expenditures by
department/area as compared to the current year adjusted budget. Again, expenditure budgets
are compared with the prior fiscal year as well as with the current year (2018-19) adjusted budget.
The FY 2018-19 Adjusted Budget column includes all budget revisions approved by the City
Council since the beginning of the fiscal year, including mid-year budget revisions
FY 2019-20 Budget May 8, 2019
17
To allow a comparable operating picture as the adopted budget for fiscal year 2018-19, the
fiscal year 2019-20 proposed budget provides a consistent application in accounting principles
and budgetary assumptions, as well as a systematic allocation of the costs of funding the City’s
long-term liabilities. For example, retiree medical benefits, shown on a “pay-as-you-go” basis
as a non-departmental expense prior to FY 2014-15, are now shown in the departmental
budgets. 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 part of the regular
operating budgets. Note, however, that pension costs are shown within the departmental
budgets only to the extent that the CalPERS required employer contributions are made.
Additional contributions approved by the Council for the § 115 Pension Trust are not shown as
expenses in the City’s operating budget; such contributions are shown as reserved cash for the
payment of pension obligations in future years.
Overall, departmental expenditures are shown as increasing 2.7 percent in the proposed budget
over the current fiscal year 2018-19 adjusted budget. Much of the increase (63.1 percent) is
the result of increases in personnel costs, despite keeping growth in the City’s workforce to a
minimum. Since personnel costs represent a large investment in the City’s current and future
resources, requests for increases in Full Time Equivalent (FTE) positions are carefully
monitored to ensure they provide the best on-going value for the City.
As can be seen in the table above, the largest share of the General Fund budget (27.7 percent)
is allocated to Police services such as 911 emergency response, neighborhood patrols, crime
CITY OF BURLINGAME, CA
SUMMARY OF GENERAL FUND EXPENDITURES
FY17-18
Actuals
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
By Department
CITY COUNCIL 333,794$ 385,071$ 428,961$ 43,890$ 11.4%
CITY MANAGER 676,570$ 849,583$ 896,772$ 47,189$ 5.6%
CITY ATTORNEY 704,342$ 948,990$ 1,124,164$ 175,174$ 18.5%
CITY CLERK 395,650$ 413,391$ 570,929$ 157,538$ 38.1%
FINANCE 2,260,381$ 2,386,665$ 2,582,927$ 196,262$ 8.2%
HUMAN RESOURCES 762,222$ 921,539$ 939,016$ 17,477$ 1.9%
FIRE & DISASTER PREPAREDNESS 10,694,035$ 11,106,979$ 11,782,359$ 675,380$ 6.1%
POLICE & DISPATCH 15,094,396$ 16,767,985$ 16,672,846$ (95,139)$ -0.6%
PARKING ENFORCEMENT 625,387$ 682,090$ 714,802$ 32,712$ 4.8%
PUBLIC WORKS 5,645,705$ 6,307,429$ 6,352,940$ 45,511$ 0.7%
COMMUNITY DEVELOPMENT 1,799,124$ 2,041,729$ 2,019,157$ (22,572)$ -1.1%
AQUATICS CENTER 439,627$ 244,800$ 309,000$ 64,200$ 26.2%
LIBRARY 5,065,272$ 5,554,025$ 5,740,951$ 186,926$ 3.4%
RECREATION 4,357,822$ 4,771,800$ 4,705,230$ (66,570)$ -1.4%
PARKS 4,782,932$ 5,088,176$ 5,243,082$ 154,906$ 3.0%
MEASURE I -$ 195,810$ 168,800$ (27,010)$ -13.8%
Total Expenditures 53,637,258$ 58,666,062$ 60,251,936$ 1,585,874$ 2.7%
FY 2019-20 Budget May 8, 2019
18
prevention, and investigation programs. Maintaining public safety as the City’s number one
priority while enhancing additional quality of life services remains the City’s vision and goal.
Fire and Disaster Preparedness services comprise an additional 19.6 percent of the General
Fund expenditure budget. The adopted budget for Central County Fire District operations for
fiscal year 2019-20 reflect a 5.7 percent increase in Burlingame’s share of funding. The budget
provides for a 12.5 percent increase in required pension contributions, a 1.5 FTE increase in
non-sworn personnel, and an additional $200,000 transfer to the Capital Projects fund for future
fire station improvements.
Personnel Changes
The fiscal year 2019-20 budget proposes a handful of changes in personnel/positions that are
deemed necessary to effectively carry out the City’s priorities and support both General Fund
and Capital Improvement Program activities. Several of these changes entail modest increases
or decreases in hours for specific positions; all are proposed to more closely align actual duties
performed by staff with the job classification. The proposed classification plan changes have
all been presented to the City’s bargaining units. The personnel changes presented as part of
the proposed budget include two reclassifications of incumbent employees and changes in the
full time equivalent (FTE) status of two Library positions (an increase and a decrease).
Parks & Recreation
The Grounds Equipment Repair Worker in the Parks & Recreation department is
responsible for the maintenance and repair of all park equipment and vehicles. The
duties of the incumbent have broadened to include an increasingly greater amount of
vehicle maintenance, so fewer Parks vehicles are sent to the Auto Shop for repair and
maintenance. As the existing duties of the incumbent are more closely aligned with
those of the Automotive Mechanic, a reclassification of the position is proposed.
Public Works
The Environmental Regulatory Compliance Coordinator was a new classification in
2014. Since this time, numerous mandates associated with Federal, State, and regional
regulatory agencies have significantly changed the requirements of the position. The
most significant changes have been revisions to the Municipal Regional Permit (MRP).
The new permit placed several new mandates on municipalities, such as new
requirements for planning, development, and implementation of green infrastructure;
trash reduction of 100%; and an extensive regime of time-sensitive storm water
inspections. As the new duties require a significantly higher level of responsibility and
a high level of management skills and are more appropriately classified as a mid-
management position, a reclassification of the position, to Environmental Compliance
Manager, is proposed.
Library
Included in the Library’s total FTE are four permanent part-time positions. As the Library
programs change and grow, so do the needs for these part-time positions. The Library
Strategic Plan outlines the need to evaluate the collection against current best-practice
FY 2019-20 Budget May 8, 2019
19
cataloguing standards, to increase the collection of materials in languages other than
English, and for greater data-driven capabilities and utilization of the database. These
additional duties require additional hours, so the Library is proposing to increase the 30
hour/week cataloger position to a full-time position. Also proposed is a 5 hour/week
decrease in the hours of the volunteer coordinator, because a reduction in the scope of
this position requires fewer hours per week.
The changes in Library personnel hours amount to a net increase of personnel positions in the
General Fund by 0.12 FTE as shown in the chart below. All of the changes combined resulted
in a very minimal cost increase of $22,200 city-wide, $16,000 to the General Fund. No other
changes are proposed to the City’s workforce for the upcoming fiscal year.
To the extent position changes are agreeable to the City Council, a staff report with the revised
staff position listing and updated job descriptions will be brought forward to the Council to be
approved by resolution prior to the beginning of the new fiscal year.
Shown below are total appropriations, personnel and non-personnel, by department or
functional area:
Department
2018-19
Budget
2019-20
Proposed
Since Prior
Year
GENERAL FUND
City Attorney 3.40 3.40 0.00
City Clerk 1.50 1.50 0.00
City Manager 2.13 2.13 0.00
Community Development - Planning 6.75 6.75 0.00
Finance 10.25 10.25 0.00
Human Resources 3.00 3.00 0.00
Library 22.88 23.00 0.12
Parks 21.50 21.50 0.00
Police 47.00 47.00 0.00
Police - Communications 7.00 7.00 0.00
Police - Parking Enforcement 4.00 4.00 0.00
Public Works - Engineering 12.75 12.75 0.00
Public Works - Streets & Storm Drain 8.03 8.03 0.00
Recreation 11.25 11.25 0.00
Total General Fund 161.44 161.56 0.12
CITY OF BURLINGAME, CA
PROPOSED BUDGET FISCAL YEAR 2019-20
AUTHORIZED FULL-TIME EQUIVALENT POSITIONS
FY 2019-20 Budget May 8, 2019
20
The 2019-20 fiscal year budget proposed for the General Fund can also be compared to the
current year budget by category of expenditure.
Personnel Costs – When reviewing the proposed 2019-20 fiscal year General Fund
expenditure budget by type, note that personnel costs are projected to increase 3.2 percent
(approximately $1.0 million) when compared to the current year. The increase is due largely to
cumulative changes in benefit costs. Increases in CalPERS pension costs – based on the
required employer contribution rates for both Safety and Miscellaneous Employee Plans –
resulted in an increase of 14.8 percent from the prior year, as shown below. (Note that
contributions to the § 115 Trust for pension obligations are not included in the budget as an
expenditure at the time of contribution.) The cost of the employer’s HRA (Health
Reimbursement Account) contributions – valuable as a recruitment tool and providing a
substitute for retiree health care benefits – added an additional $311,100 to the General Fund
Budget. The retiree HRA benefit, a non-pensionable form of compensation that produces no
CITY OF BURLINGAME, CA
SUMMARY OF GENERAL FUND EXPENDITURES
FY17-18
Actuals
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
By General Fund Program
General Government 5,132,958$ 5,928,239$ 6,545,069$ 616,830$ 10.4%
Public Safety
Central County Fire (Burlingame 10,694,035 11,106,979 11,782,359 675,380$ 6.1%
Police & Dispatch 15,719,783 17,622,885 17,554,148 (68,737)$ -0.4%
Public Works 5,645,705 6,307,429 6,352,940 45,511$ 0.7%
Community Development 1,799,124 2,041,729 2,019,157 (22,572)$ -1.1%
Leisure & Culture
Aquatic Center 439,627 244,800 309,000 64,200$ 26.2%
Library 5,065,272 5,554,025 5,740,951 186,926$ 3.4%
Parks & Recreation 9,140,754 9,859,976 9,948,312 88,336$ 0.9%
Total Expenditures 53,637,258$ 58,666,062$ 60,251,936$ 1,585,874$ 2.7%
CITY OF BURLINGAME, CA
SUMMARY OF GENERAL FUND EXPENDITURES
FY17-18
Actuals
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
By Expense Categories
Salaries & Wages 17,325,633$ 19,517,935$ 19,667,799$ 149,864$ 0.8%
Benefits 10,327,221 11,410,074 12,260,661 850,587 7.5%
Operating Costs 21,687,413 23,308,572 23,934,724 626,152 2.7%
Internal Services 4,176,888 4,187,333 4,170,252 (17,081) -0.4%
Capital Outlay 120,103 242,148 218,500 (23,648) -9.8%
Total Expenditures 53,637,258$ 58,666,062$ 60,251,936$ 1,585,874$ 2.7%
FY 2019-20 Budget May 8, 2019
21
additional future liabilities to the employer, was enhanced in recent labor negotiations. These
benefit cost increases were offset somewhat by a decrease in the estimated cost of health care
premiums. Early in the fiscal year, the CalPERS Board approved 2019 health plan premium
rates with a combined weighted average increase of 1.16%, the lowest increase in over 20
years.
The budget for salaries and wages includes regular salary increases, calculated according to
contractually-agreed upon increases for most employees, including hourly employees.
Offsetting these increases is the cost of new employees, who are generally placed in a lower
salary step than existing employees. Additional staffing proposals were kept to a minimum as
previously outlined – the increase of 0.12 FTE and two proposed reclassifications described
previously are included in the General Fund budget. Overtime, another component of Salaries
and Wages, is also expected to be approximately $245,000 less than in the current fiscal year.
This reduction in overtime costs is projected chiefly in the Police Department, where a number
of new officers are coming up to speed and will be more capable of handling a variety of shifts.
Non-Personnel Costs – This category of costs is increasing 2.1 percent in the 2019-20 fiscal
year proposed budget when compared to the current year budget. Though not a large
percentage increase for the fiscal year, the change represents not only regular cost increases,
but an attempt to address the City Council’s initiatives for the year. 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.
It should be noted that not all expenses are incurred every fiscal year. For example, the adopted
budget for the current fiscal year does not include an appropriation for election expenses,
CITY OF BURLINGAME, CA
GENERAL FUND WAGES & BENEFIT DETAIL
Personnel Cost
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
$ Change from
Prior Year
% Change
from Prior
Year
Salaries & Wages 19,517,935$ 19,667,799$ 149,864$ 0.8%
Benefits:
Retirement 5,312,435 6,098,952 786,517 14.8%
Health Premiums 2,968,157 2,701,692 (266,465) -9.0%
Medicare 286,371 294,030 7,659 2.7%
OPEB Current 1,034,179 1,039,320 5,141 0.5%
Workers' Compensation 928,828 928,828 - 0.0%
Dental, Vision, Life & LTD 294,400 298,737 4,337 1.5%
HRA Contribution 48,998 360,098 311,100 634.9%
Other Benefits 536,706 539,004 2,298 0.4%
Total Benefits 11,410,074 12,260,661 850,587 7.5%
Total Personnel Cost 30,928,009$ 31,928,460$ 1,000,451$ 3.2%
FY 2019-20 Budget May 8, 2019
22
whereas the proposed budget for the 2019-20 fiscal year includes $150,000 for the anticipated
cost of the November 2019 elections. In addition, certain expenditures may be anticipated in
the delivery of services that provide a high level of cost recovery, increasing revenues at the
same rate as the increased expense. The Recreation budget usually includes an increase in
the contractual services budget for the costs associated with additional or enhanced class
offerings, for which the additional revenues will offset the costs. The closing of the Recreation
Center for the construction of the new Community Center, and its impact on the revenues and
expenditures of certain programs, will be better known in the 2019-20 fiscal year’s mid-year
analysis.
General Fund Operations Summary
A summary of the General Fund operations per the FY 2019-20 proposed budget is shown
below:
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 2018-19 of
approximately $3.5 million after funding the CIP Capital Investment Reserve in the amount of $3
million. Of this budgetary surplus, $2.8 million represents the amount contributed to the Pension
Trust Fund for the fiscal year, which will serve to add to the restricted fund balance. In addition,
$1.9 million is applied to the Economic Stability Reserve per the City’s General Fund Reserve
Policy. This means that the City’s Unassigned General Fund Balance will decrease $1.2 million,
if all revenues and expenditures mirror the adjusted budget for fiscal year 2018-19.
Note, however, 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
FY17-18
Actuals
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
Total Revenue $ 71,722,980 $ 78,486,900 $ 78,571,500
Expenditures
Departmental Expenditures (53,637,258)(58,666,062)(60,251,936)
Transfers to Debt Services (3,277,833)(3,109,939)(3,125,695)
Other Transfer In (Out)(6,408,111)(10,163,883)(8,527,749)
Total Expenditures (63,323,202)(71,939,884)(71,905,380)
Net Operating Surplus 8,399,778 6,547,016 6,666,120
Transfer to Capital Investment Reserve (5,300,000)(3,000,000)(3,000,000)
Change in General Fund Balance 3,099,778$ 3,547,016$ 3,666,120$
CITY OF BURLINGAME, CA
GENERAL FUND OPERATING SUMMARY
FY 2019-20 Budget May 8, 2019
23
controls are established within each category of departmental expenditures, budgetary savings
tend to average two to four percent of the annual expenditure budget ($1.2 – $2.3 million for
fiscal year 2018-19). Therefore, an actual decrease in the unassigned balance of the City’s
General Fund is unlikely in the current fiscal year.
The initial General Fund budget for fiscal year 2019-20 anticipates a surplus of nearly $3.7
million. Of this amount, nearly $2.2 million is for the fiscal year’s (General Fund) contribution to
the Pension Trust Fund, again adding to the restricted fund balance. Again, only when the trust
fund is drawn upon (in future years) to pay required CalPERS employer contributions will the
expenditures be recorded, and the amount restricted for this purpose in the fund balance be
reduced.
The budget provides funding of $3 million for an increase in the Capital Investment Reserve in
the City’s Capital Projects Fund, to provide partial funding of the City’s most immediate facilities’
needs. Unlike the current Capital Projects Fund Balance, the Capital Investment Reserve 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 sufficient other funding
is identified. The City has an extensive list of currently unfunded capital needs, both in facilities
and infrastructure, which makes continued funding of this reserve imperative.
General Fund Debt Service Obligations
As can be seen in the schedule of General Fund Debt Service Obligations below, the net General
Fund Debt Service (not reimbursed by other funds) will remain fairly level with the prior year,
increasing only 1.4 percent in the upcoming fiscal year. Note that this schedule depicts only
current debt service obligations. As in the current year budget, the proposed budget includes an
additional $2 million in General Fund debt service costs ($1 million specifically funded from
Measure I monies) for the anticipated issuance of additional lease revenue bonds. The
approximate $30 million in bond proceeds will help fund a new Community Center at the site of
the City’s current Recreation Center. Issuance of the bonds, initially scheduled for the 2018-19
fiscal year, were delayed to provide for an extensive reconfiguration of outdoor facilities adjacent
to the site of the new building in Washington Park.
CITY OF BURLINGAME, CA
GENERAL FUND DEBT SERVICE OBLIGATIONS
Description Maturity
FY18-19
Adopted
FY19-20
Proposed
$ Change
from Prior
Year
% Change
from Prior
Year
2006 Pension Obligation Bonds FY2036 $956,648 $976,500 $19,852 2.1%
2010 Corp Yard Lease Refunding Bonds FY2021 1,164,275 1,167,775 3,500 0.3%
2012 Lease Revenue Bond*FY2042 550,888 551,488 600 0.1%
Debt Administration Costs 13,000 13,000 0 0.0%
Subtotal, Principal and Interest 2,684,811 2,708,763 23,952 0.9%
Contributions from Other Funds (1,574,872)(1,583,218)(8,346)0.5%
Net General Fund Debt Service $1,109,939 $1,125,545 $15,606 1.4%
*100% reimbursed by the Special Assessment District and Parking Enterprise
FY 2019-20 Budget May 8, 2019
24
General Fund Balance
The General Fund shows a projected total fund balance of nearly $43.6 million at the end of the
2019-20 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:
The schedule below shows how the $3.7 million change in fund balance will impact the reporting
of General Fund reserve levels:
As of June 30, 2019, a fund balance of approximately $39.9 million represents 55.5 percent of
the General Fund’s total expenditures of $71.9 million for the year. Although this would normally
be considered a very strong level of reserves, the City Council adopted a risk-based General
CITY OF BURLINGAME, CA
CHANGES TO GENERAL FUND BALANCE
FY 2017-18
Actual
FY 2018-19
Adjusted
Budget
FY 2019-20
Proposed
Budget
Beginning Fund Balance (audited)33,272,402$ 36,372,181$ 39,919,197$
Projected Revenues & Expenditures
Projected revenues 71,722,980 78,486,900 78,571,500
Projected departmental expenditures (53,637,258)(58,666,062)(60,251,936)
Subtotal, Revenues Net of Expenditures 18,085,722 19,820,838 18,319,564
General Fund Long-Term Debt (3,277,833)(3,109,939)(3,125,695)
Other Transfers In (Out) of General Fund (6,408,111)(10,163,883)(8,527,749)
Transfer to CIP Renewal & Replacement Reserve (5,300,000)(3,000,000)(3,000,000)
Ending Fund Balance (Projected)36,372,181$ 39,919,197$ 43,585,317$
CITY OF BURLINGAME, CA
GENERAL FUND BALANCE ASSIGNMENTS
FY17-18
Actual
Results
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
Economic Stability Reserve 16,913,000$ 18,837,000$ 18,857,000$
Catastrophic Reserve 2,000,000 2,000,000 2,000,000
Contingency Reserve 500,000 500,000 500,000
Subtotal, Assigned Fund Balance 19,413,000 21,337,000 21,357,000
Add: Restricted for Pension Trust Fund (PARS)4,139,920 6,977,920 9,134,920
Add: Unassigned Fund Balance 12,819,261 11,604,277 13,093,397
Total, Ending Fund Balance 36,372,181$ 39,919,197$ 43,585,317$
FY 2019-20 Budget May 8, 2019
25
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.
In addition, the City’s fund balances now include amounts that are restricted – set aside for use
only to pay unfunded pension obligations due to CalPERS. These obligations are large. Valued
at approximately $63.7 million as of the beginning of the current fiscal year, the amount due from
these liabilities will increase in the near future due to the application of more realistic discount
rates (as well as other assumption changes) in the coming years. Due to the magnitude of the
unfunded pension liabilities, the City established a § 115 trust fund with Public Agency
Retirement Services (PARS) in October 2017. The intent of the trust fund is to grow these
contributions at a higher yield than can be generated in the City’s own portfolio so that monies
are available when the required employer contribution rates to CalPERS, which will increase
rapidly in the next 5-10 years, exceed certain threshold rates. The balance in the trust at the
beginning of the fiscal year was $4.8 million; as of March 31, 2019, the balance is $8.4 million.
The following schedule shows the same General Fund Balance changes, but includes not only
revenues and expenditures, but funding of the reserves according to Council policy, and the
contributions accumulating in the § 115 Trust Fund. A total change in fund balance of $3.7
million is shown; unassigned and unrestricted fund balance increases by $1.5 million.
The FY 2019-20 General Fund’s projected surplus will be first used to increase the Economic
Stability Reserve to the level prescribed by the City’s General Fund Reserve Policy: (The policy
calls for an Economic Stability Reserve of 24 percent of budgeted revenues, a Catastrophic
Reserve of $2.0 million, and a $500,000 Contingency Reserve.) Because the increased
revenues are projected to increase very modestly in FY 2019-20, a very slight increase in
reserves ($20,000) is prescribed. Again, after reflecting the contribution to the City’s § 115 Trust
fund for pensions, the remaining fund balance will be reported as “unassigned fund balance”.
CITY OF BURLINGAME, CA
GENERAL FUND BALANCE ASSIGNMENTS
Assigned Fund Balances
Economic
Stability
Reserve
Catastrophic
Reserve
Contingency
Reserve
Total Fund
Balance
Beginning Balance at 7/1/2019 11,604,277$ 6,977,920$ 18,837,000$ 2,000,000$ 500,000$ 39,919,197$
Changes in 2018/19:
Projected Revenues 78,571,500 78,571,500
Projected Expenditures (60,251,936) (60,251,936)
Transfer Out to Debt Services (3,125,695) (3,125,695)
Transfer Out to Capital Investment Reserve (3,000,000) (3,000,000)
Other Transfers In/Out, net (8,527,749) (8,527,749)
Transfer to Restricted & Assigned Fund Bal.(2,177,000) 2,157,000 20,000 - - -
Subtotal, Changes in 2019/20 1,489,120 2,157,000 20,000 - - 3,666,120
Ending Balance at 6/30/2020 13,093,397$ 9,134,920$ 18,857,000$ 2,000,000$ 500,000$ 43,585,317$
Unassigned
Fund Balance
Restricted
for Pension
Trust Fund
(PARS)
FY 2019-20 Budget May 8, 2019
26
Measure I Fund – Though Measure I revenues and expenditures are part of General Fund
operations, these monies are accounted for in a separate sub-fund to provide greater
transparency in reporting the uses of this new funding source. This accounting treatment will also
facilitate external audit activities and allow a straight-forward review by the Measure I Oversight
Committee. Approved by voters in November 2017, this general purpose ¼% transaction tax
went into effect on April 1, 2018. The Measure I Expenditure Plan was adopted by the City Council
in February 2018. The budget priorities from the public engagement surrounding Measure I
included public safety; street and sidewalk maintenance; and safe, adequate park and recreation
programs and facilities.
The Measure I tax was expected to provide approximately $1.75 million in additional revenue in
the first complete fiscal year ended June 30, 2019, but that projection, bolstered by the same one-
time events that impacted other sales tax revenues, was increased by $350,000 at midyear. The
initial-year expenditures included funding for one police officer, $1 million in debt service for an
anticipated Lease Revenue bond issuance for the new Community Center construction project,
and approximately $575,000 for specific street and sidewalk improvements identified in the 2018-
19 Capital Improvement Plan. Because the first quarter of these tax receipts (totaling $474,000
for fiscal year 2017-18) was not budgeted, and fiscal year 2018-19 revenues are projected to be
higher than initially budgeted, the Measure I Fund will have a fund balance of over $800,000
heading into the new fiscal year. As a result, the 2019-20 fiscal year budget allows for additional
street and sidewalk improvement funding. Per the chart below, $1.2 million is available for these
projects. In addition, one Public Safety Officer continues to be funded by Measure I, and $1
million is set aside for debt service for the upcoming Community Center bond issuance.
CITY OF BURLINGAME, CA
MEASURE I
2019-20
Proposed
Projected Revenues 2,000,000$
Projected Expenditures:
Public Safety - 1.0 FTE Police Officer (166,500)
Administrative Services (2,300)
Total Expenditures (168,800)
Projected Transfer (Out):
Transfer to Street Capital Project Fund (1,200,000)
Transfer to Debt Service Fund (1,000,000)
Total Transfer (Out)(2,200,000)
Revenues (Under) Expenditures & Transfers (368,800)$
FY 2019-20 Budget May 8, 2019
27
Unfunded Needs
The City has long recognized the need to balance ongoing operations and services with a
significant list of unfunded needs. These unfunded needs are largely reflected in the City’s aging
facilities, many of which are utilized by the public. Nearly five years ago, the City Council ranked
a new downtown parking garage as the highest priority for small businesses and shoppers alike,
followed by a new Community Center and essential City Hall upgrades to enhance public access
to policy decision-making. Since that time, the passage of Measure I has helped advance the
replacement of the City’s World War II-era Recreation Center in Washington Park with a new,
more functional Community Center. A new lease revenue bond issue is now contemplated in FY
2019-20 to make the new Community Center a reality. In addition, more infrastructure
(specifically, street and sidewalk) repairs and replacement will be made possible with Measure I
funds.
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 future. As a result of the Council’s
Goal-Setting Session in January and subsequent public discussion, the City Council agreed to
prioritize the following five infrastructure projects during fiscal year 2019-20: Broadway grade
separation, City Hall safety improvements, development of a specific plan for Rollins Road, sea
level rise shoreline protection improvements, and the undergrounding of power lines on El Camino
Real. The selection of five large infrastructure priorities by no means suggests completion in the
fiscal year, but rather indicates a desire to initiate, prioritize, and provide a staff focus in the
upcoming fiscal year – particularly with regard to identifying funding sources. The funding for
these identified priorities may include a combination of City General Funds, state and federal
grants, assessment district, a ballot measure, partnering with private developers, and other
sources. Meanwhile, the City continues regular investments in building maintenance and
infrastructure maintenance through the five-year CIP.
To the extent possible, funds are being set aside in the City’s Capital Investment Reserve within
the Capital Projects Fund. The reserve balance as of the end of the current fiscal year is
anticipated to be $28.8 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.
In addition, unfunded pension liabilities are requiring immediate attention, as the interest on these
obligations begins to outpace efforts to pay down these expenses for prior-year service. The City
Council has taken steps to address these growing unfunded pension liabilities with CalPERS.
Recent actuarial studies presented to the Council in January show that the City’s CalPERS
contribution rates are expected to surge from the current Misc./Safety rates of 26%/50.4% to
39.2%/86.3% (as a percent of payroll) in the next 10-12 years. The 2019-20 fiscal year will be
the third year for funding the § 115 Trust Fund. The trust fund was established to augment the
City’s budget when required CalPERS employer rates exceed a pre-determined threshold.
Although staff continues to analyze additional options for funding pension obligations, these
unfunded needs will be kept in mind when assessing the City’s long-term fiscal health.
FY 2019-20 Budget May 8, 2019
28
Other Funds
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 2019-20 fiscal
year:
Capital Projects Fund
The 2018-19 fiscal year Capital Improvement Program budget was increased during the year to
provide additional appropriations of $2.7 million to begin site preparation work for construction of
the future Community Center. The funding was needed to begin work on the installation of a new
playground, a sports court, and a small picnic area, replacing and reconfiguring existing outdoor
facilities at Washington Park. Although this work is necessary to allow for the construction of the
new Community Center, it will be a standalone project for budgeting purposes.
Construction of the new Community Center will begin midway through the 2019-20 fiscal year.
The project includes a 35,700 square foot pavilions style building, with parking under and adjacent
to the new center, and an indoor and outdoor stage. Although the cost of the Community Center
project is expected to exceed $50 million, the project budget is not yet included in the Capital
Projects Plan for the year. With $1 million toward annual debt service included in the Measure I
expenditure plan, and an additional $1 million annual General Fund transfer also intended to fund
CITY OF BURLINGAME, CA
BUDGET SUMMARY BY FUND
FY18-19
Adjusted
Budget
FY19-20
Proposed
Budget
General Fund 58,666,062$ 60,251,936$
Capital Projects 25,537,000 25,845,000
Financing Authority 4,747,600 4,777,302
Building Enterprise 2,137,350 2,274,729
Landfill Fund 258,004 251,813
Parking Enterprise 792,492 760,753
Sewer Enterprise 10,926,726 10,983,975
Solid Waste Enterprise 797,284 793,095
Water Enterprise 14,865,720 14,899,877
Special Revenue Funds 263,800 215,500
Other Funds 1,380,166 58,331
Total 120,372,204$ 121,112,311$
FY 2019-20 Budget May 8, 2019
29
the debt service, the City anticipates a lease revenue bond issuance of approximately $30 million
early in the fiscal year. An additional combination of Measure I revenues plus ongoing General
Fund revenues and/or monies from the Capital Investment Reserve will be needed to complete
funding of the project. The project budget will be finalized and included in the Capital
Improvement Program with the FY 2019-20 mid-year report.
A complete presentation of 2019-20 fiscal year Capital Projects Program activities has been
prepared by Public Works for this (May 8, 2019) Budget Study Session.
Note that both the current year and FY 2019-20 transfers to the Capital Investment Reserve are
not 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
Improvement Program. Although deferred infrastructure maintenance must be avoided for a
truly sustainable budget, it is difficult to determine the appropriate annual investment into
comprehensive maintenance programs and the Capital Investment 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. A $3 million transfer to the Capital Investment Reserve has served as
a placeholder in past budgets, and again in the preliminary budget for FY 2019-20, representing
an affordable investment in these unfunded infrastructure projects. The balance in the reserve,
assuming no projects are funded from this source during the fiscal year, will be $31.8 million as
of June 30, 2020.
Solid Waste Fund and Landfill Funds
As noted in the mid-year report, Solid Waste rates were approved for three calendar years
(effective January 1, 2019, 2020 and 2021). However, the Solid Waste Fund will continue to
experience deficits, requiring draw downs on the fund’s rate stabilization reserve. For calendar
year 2018, revenues from collections from Burlingame customers ($11.2 million) fell short of the
costs of the City’s collection contractor (Recology) of $5.8 million; disposal & processing fees of
$3.7 million; franchise fees of $750,000; funding of the City’s landfill post-closure costs
($470,000); and $610,000 for costs borne by the City, including street sweeping and steam
cleaning and maintenance of public receptacles. The estimated shortfall for calendar year 2019,
CITY OF BURLINGAME
CAPITAL IMPROVEMENT PROGRAM General Fund
Other
Funds/Sources FY19-20 Total
Facilities CIP $2,000,000 $0 $2,000,000
Parking & Garages CIP 0 2,650,000 2,650,000
Parks & Trees CIP 3,305,000 0 3,305,000
Sewer CIP 0 5,080,000 5,080,000
Storm Drain CIP 0 4,100,000 4,100,000
Streets CIP 2,660,000 3,050,000 5,710,000
Water CIP 0 3,000,000 3,000,000
All CIP Funding Sources, FY2019-20 $7,965,000 $17,880,000 $25,845,000
FY 2019-20 Budget May 8, 2019
30
even with the rate increases in effect, is $194,000. Although the fund is credited with interest
earnings and revenues from forfeited C&D deposits, the additional expense will draw down further
the fund’s rate stabilization reserve. Revenues from the utility are anticipated to fully cover the
expenses of the fund only in the third year of rate increases. The enhanced revenues will insure
that the fund is in good fiscal position when the current franchise agreement with Recology
terminates at the end of 2020. The new agreement was reviewed by the Council in January; it
allows for an extension of the services provided by Recology through the year 2035.
Early in the new fiscal year, the South Bayside Waste Management Authority (SBWMA), of which
the City is a member, plans to refund its outstanding Series 2009A Bonds, saving $10 million in
present value savings. At that same time, a new issuance of bonds will provide an additional $10
million of new capital. The $20 million will be used to fund capital upgrades to the SBWMA’s
facilities in San Carlos. The upgrades are needed to address changes in the commodities market
and associated processing of recyclable materials, and to fund an Organics-to-Energy (O2E)
Project. The O2E project will help all the jurisdictions in the SBWMA achieve compliance with
state mandates to reduce landfill waste. It will also significantly reduce the greenhouse gas
emissions associated with organics processing. Both projects will be cost beneficial over the
useful life of the upgrades. The 2019 Bonds will be structured such that annual debt service
payments will remain comparable with the authority’s current payments, and the maturity will be
extended six years. As such, the bonds will result in minimal annual solid waste rate payer impact.
Solid waste rates also include a five percent surcharge for landfill post-closure costs. The
surcharge provides revenues (over $500,000 in fiscal year 2019-20) to the Landfill Fund to cover
maintenance and monitoring functions at the landfill site, and will serve to reduce the $1.8 million
fund deficit that results from the liability recorded for future post-closure costs.
Water & Sewer Funds
Winter rains brought an end to a severe five-year drought in northern California in 2017. With
improving reservoir levels and water consumption easing back into higher, pre-drought patterns,
revenues in the Water and Sewer Utilities are much less difficult to accurately anticipate than just
a few years ago. The drought created higher costs and lower revenues (due to conservation
efforts) for both these funds, necessitating water rate increases over a three-year period, beginning
January 2017. The rate increases allowed for the higher cost of wholesale water purchased from
the San Francisco Public Utilities Commission (SFPUC) and the continued funding of prudent
capital improvements in the Water utility. The final 7.5 percent rate increase was effective January
1, 2019.
FY 2019-20 Budget May 8, 2019
31
In fiscal year 2019-20, water consumption is projected to match current-year experience. Due to
the rate increases, projected revenues are anticipated to be $20.6 million. Funding of capital
projects/infrastructure within the Water utility will be maintained at $3 million (as in the current fiscal
year). Note that capital spending is not included as expenses of the fund. At year end,
infrastructure improvements are capitalized and reported as long-term assets, rather than
remaining in “unrestricted net position.”
Projected revenues for the Sewer Fund are projected to increase less than 3 percent in fiscal year
2019-20, as no rate increases were indicated for the fund as part of the 2016-17 rate study.
Funding of capital projects/infrastructure within the Sewer utility – both collection system
CITY OF BURLINGAME, CA
CHANGES TO WATER FUND NET POSITION
FY18-19
Adjusted
Budget
FY19-20
Projected
Beginning of Year Balance (Budget/Audit)7,451,491$ 8,581,949$
Projected Revenues & Expenses
Projected revenues 18,598,000 20,610,850
Projected operating expenses (16,190,569)(16,303,277)
Subtotal, Revenues Net of Expenses 2,407,431 4,307,573
Interest Revenues (Expenses)(339,151)(258,600)
Transfers - General Fund - Contributions for Debt Service (509,242)(513,015)
Other Transfers In (Out) of Water Fund (428,580)(457,800)
Projected Water Unrestricted Net Position 8,581,949$ 11,660,107$
CITY OF BURLINGAME, CA
CHANGES TO SEWER FUND BALANCE
FY17-18
Adjusted
Budget
FY18-19
Projected
Beginning of Year Balance (Budget/Audit)8,693,215$ 10,554,164$
Projected Revenues & Expenses
Projected revenues 16,028,000 16,505,000
Projected operating expenses (12,473,618)(12,629,081)
Subtotal, Revenues Net of Expenses 3,554,382 3,875,919
Interest Revenues (Expenses)(607,574)(498,645)
Transfers - General Fund - Contributions for Debt Service (871,189)(509,242)
Other Transfers In (Out) of Sewer Fund (214,670)(212,037)
Projected Sewer Unrestricted Net Position 10,554,164$ 13,210,159$
FY 2019-20 Budget May 8, 2019
32
improvements and wastewater treatment plant upkeep – will be fairly level with the current year at
just under $5.1 million. As with the Water Fund, infrastructure improvements will be capitalized at
year end and reported on the fund’s balance sheet.
Once completed, the Capital Master Plan will inform a rate study for both of these major utilities.
Proper rate setting will ensure the long-term sustainability of the Water and Sewer funds.
Gas Tax (HUTA) and Road Repair and Accountability Act (RRAA) of 2017
The Gas Tax is a special revenue fund 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 have always been an important
revenue source for the City’s Streets Capital Improvement Program.
The Road Repair and Accountability Act of 2017 (SB1) now provides an additional, significant
funding source for transportation systems enhancement projects. The Act greatly increased the
local streets and roads funds allocated through the Highway Users Tax Account (HUTA) and also
provided funds from new taxes that flow through the State’s Road Maintenance and Rehabilitation
Account (RMRA). The estimate for the new HUTA allocations had to be revised downward at
mid-year, as the estimate was based on a proposed 4 cent increase in the HUTA § 2103 taxes,
which the Board of Equalization (SBOE) failed to enact for July 1, 2018. However, the tax
increase will be effective July 1, 2019; hence the increased Gas Tax revenue projection for fiscal
year 2019-20.
Internal Service Funds
Internal service funds (ISFs) are used to account for internal costs that are borne by all
departments/programs of the City. Allocation of these centrally-incurred costs is performed based
on estimated usage or other metrics.
CITY OF BURLINGAME, CA
GAS TAX ALLOCATIONS
Description
2017-18
Actual
2018-19
Adjusted
Budget
2019-20
Proposed
Budget
$ Change
from Prior
Year
% Change
from Prior
Year
2103 State Gasoline Tax 117,404$ 107,000$ 258,000$ 151,000$ 141.1%
2105 State Gasoline Tax 163,603 170,000 170,000 0 0.0%
2106 State Gasoline Tax 121,424 125,000 124,000 (1,000)-0.8%
2107 State Gasoline Tax 212,920 222,000 221,000 (1,000)-0.5%
2107.5 State Gasoline Tax 6,000 6,000 6,000 0 0.0%
RMRA (SB1)138,972 480,000 501,000 21,000 4.4%
TCRF (SB1) Loan Repayment 34,273 34,000 34,000 0 0.0%
794,595$ 1,144,000$ 1,314,000$ 170,000$ 14.9%
FY 2019-20 Budget May 8, 2019
33
Although the proposed budgets for each of the ISFs vary greatly over the current year spending
levels, charges to the City’s departments and programs remain relatively consistent with the prior
year. The allocation of internal services funds impacts each department and program differently
based on the benefits provided. For example, even though funding for the General Liability ISF
(through internal charges to departments) has not increased, the allocations to some departments
are diminished, while others bear a higher percentage of the charges based on past frequency
and severity of General Liability claims.
In addition, decreases in an internal service fund’s budget do not necessarily result in an overall
reduction in charges to departments or fund “recoveries”. This is evident in the FY 2019-20
preliminary budget: the largest budgetary change is proposed in the Fleet and Equipment ISF.
The Capital Outlay budget for the division in the current fiscal year included replacement of
several large vehicles, including a street sweeper and sewer cleaning truck. This year, the
replacement schedule is much lighter – six vehicles with an average estimated cost of less than
$40,000 each. But because replacement costs are built into the annual charges to departments,
the city-wide allocation changes very little. Over time, the higher cost of replacement vehicles
and equipment will result in higher depreciation costs, increasing the allocation of this ISF’s
expenditure budget to the various departments.
Similarly, the absence of charges associated with the equipment needed for the new records
retention and ERP systems (included in the current year Admin/IT budget) results in a decrease
in this ISF’s budget in fiscal year 2019-20, but very little change to the allocation of these costs to
the departments.
Although the General Liability 2019-20 fiscal year budget reflects no change from the current
budget, staff is aware that the cost of this program is rising. The City is a member of the Pooled
Liability Assurance Network Joint Powers Authority (PLAN JPA), a joint powers insurance
authority that consists of 28 member cities in the Bay Area. Although the JPA and the City in
particular have been able to keep claims and expenses to a minimum, the California public entity
insurance marketplace is changing dramatically. Public agencies throughout the state are seeing
a significant increase in plaintiff demands and high dollar liability claims. Areas of particular
concern include dangerous conditions, road design, intersections, sidewalks, and public safety
services. Due to exposure levels relating to high dollar value claims and payouts for wildfires and
CITY OF BURLINGAME, CA
INTERNAL SERVICE FUNDS
FY16-17
Actuals
FY17-18
Actuals
FY18-19
Adjusted
Budget
FY19-20
Proposed
$ Change
from Prior
Year
% Change
from Prior
Year
Admin & Info Technology ISF $1,081,618 $981,594 $1,439,387 $1,158,010 ($281,377)-19.5%
Facilities Services ISF 1,402,531 1,547,304 1,742,612 1,824,011 81,399 4.7%
Fleet & Equipment ISF 1,178,029 1,235,560 2,181,832 1,145,000 (1,036,832)-47.5%
OPEB Retiree Medical ISF 4,425,862 4,349,551 5,093,603 4,907,912 (185,691)-3.6%
General Liability ISF 1,045,148 653,559 1,510,000 1,510,000 0 0.0%
Worker's Comp ISF 513,266 808,222 823,612 897,000 73,388 8.9%
Total $9,646,454 $9,575,788 $12,791,046 $11,441,933 ($1,349,113)-10.5%
FY 2019-20 Budget May 8, 2019
34
other natural disasters, several insurers are leaving the marketplace and others are significantly
increasing their demanded premiums. Excess and reinsurance liability renewal premiums are
increasing at least 10-15 percent statewide, even before taking into account any significant pool
losses. The current budget in the General Liability ISF includes some margin for increasing the
fund’s balance and providing a greater level of confidence for claims reserves. However, to the
extent that excess insurance premiums increase, the fund’s budget (and allocations to the
departments) will also have to be raised in the future to maintain an acceptable fund balance for
this self-insured program.
General Fund Five-Year Financial Forecast
The five-year forecast was last updated with the fiscal year 2018-19 mid-year report in March.
General Fund revenues reflected in total in the initial fiscal year 2019-20 budget are
approximately 0.7 percent ($0.6 million) less than projected in the five-year forecast, due
largely to a reduction in Charges for Services (service fees charged by departments). General
Fund expenditures are approximately 1.6 percent (< $1.0 million) less than projected for FY
2019-20 in the forecast. Where the five-year forecast anticipated a $3.2 million surplus for
fiscal year 2019-20 (before funding the City’s § 115 Trust for pension obligations), this initial
budget shows a $3.7 million surplus prior to such funding. 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 long-term projections will be brought
to the Council’s attention.
Longer term financial planning is not limited to the General Fund. The City’s other operating
funds are also examined for unfunded liabilities and future vulnerabilities, and adjustments
are made as needed. To the extent these funds are not self-sustaining, they can indicate a
drag on the City’s General Fund operations. To avoid such a condition, long-term plans are
updated frequently, and any changes in the outlook of these funds are brought to the City
Council’s attention through the budget, mid-year analysis, and financial reporting processes
currently in place.
FISCAL IMPACT
The preliminary General Fund budget for the 2019-20 fiscal year calls for projected revenues of
approximately $78.6 million, with expenditures and net transfers out of $74.9 million. Much of the
remaining $3.7 million operating surplus will be used to further fund the City’s § 115 Trust Fund
for pension obligations ($2.2 million from the General Fund). An additional $20,000 will be applied
to the Economic Stability Reserve, as prescribed in the City’s General Fund Reserve Policy.
Obviously, this annual budget cannot fully address all of the unfunded needs identified in previous
budget discussions. As these unfunded needs generally reflect the long-term degradation of City
facilities and other infrastructure, it is unclear as to whether the budget can be considered
sustainable over the long-term. However, this preliminary budget does provide for an annual $3
million transfer out of the General Fund to the Capital Projects Fund in order to increase the
Capital Investment Reserve, helping to curtail the creation of additional capital needs. In addition,
funds are being set aside to fund the City’s pension obligations as they come due, and reserves
FY 2019-20 Budget May 8, 2019
35
have been fully funded to weather the next inevitable economic downturn. The General Fund
balance is estimated to be $43.6 million at the end of fiscal year 2019-20.
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
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 fiscal year 2019-20 Budget document.
1
STAFF REPORT
AGENDA NO: 5b
MEETING DATE: May 8, 2019
To: Honorable Mayor and City Council
Date: May 8, 2019
From: Syed Murtuza, Director of Public Works – (650) 558-7230
Subject: City Council Review of Draft FY 2019-20 Capital Improvement Program
RECOMMENDATION
Staff recommends that the City Council review the proposed draft FY 2019-20 Capital Improvement
Program (CIP) and provide feedback.
BACKGROUND
On March 13, 2019, 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 summaries of the infrastructure priorities for General Fund projects, Parking
Enterprise Fund Projects, and Gas Tax, SB 1 and Measure A, I, and M funded projects.
DISCUSSION
This is a follow-up review of the overall draft FY 2019-20 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.
Based on the condition assessment of City-owned infrastructure systems and capital improvements
planning, staff is proposing a total of $25,845,000 in the CIP program for FY 2019-20 appropriations
as follows:
CIP Program Categories Estimated Cost
General Fund projects (includes $700k of Measure I) $8,665,000
Parking Enterprise Fund Projects $2,650,000
Street Resurfacing Program (Gas Tax, Measures A, I and M) $2,350,000
Water System Enterprise Fund projects $3,000,000
Sewer System Enterprise Fund projects $5,080,000
Storm Drain System projects $4,100,000
Total: $25,845,000
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
2
FY 2019-20 GENERAL FUND PROJECTS
Below is a summary table of each of the CIP Program areas with project descriptions and costs.
MOBILITY & TRANSPORTATION IMPROVEMENTS ($3,360,000)
Project Description
FY 19-20 CIP
Requests
(in thousands)
Broadway Grade Separation (Engineering Design Phase – Local Match $1,500
Sidewalk & ADA Improvements (General Fund $500k/Measure I $700k) $1,200
Traffic Signal Upgrades $200
Pedestrian Improvements $100
Residential Street Lighting Improvements $100
Traffic Calming $100
Traffic and Transportation Studies (Annual) $80
El Camino Real Development (Consultant Assistance) $80
TOTAL: $3,360
Next year’s CIP program includes $1.5M in local matching funds to move the Broadway Grade
Separation Project into the PS&E (detailed final engineering design, specifications, and plans)
phase. The cost estimate for the PS&E phase was originally $15M; it has now been revised to
approximately $19.8M. The City plans to request $18.3M in grant funds through the Measure A
Program from the San Mateo County Transportation Authority. Additionally, $500,000 in new
General Fund and $700,000 from Measure I, for a total of $1,200,000, is being proposed for next
fiscal year for the sidewalk program and associated ADA (Americans with Disabilities Act)
improvements. These funds will be combined with $700,000 in existing project fund balance for a
total of $1,900,000 in sidewalk repairs and ADA improvements next fiscal year.
Traffic signal upgrades are proposed to implement countdown pedestrian indicators at various
signalized intersections throughout the city, and camera detection upgrades will be installed at
certain priority locations. Additionally, next year’s work program includes funding to implement
pedestrian, traffic calming, and street lighting improvements in response to improvements identified
through studies or investigations that arise throughout the year.
Funding is also proposed for consultant assistance related to the Caltrans El Camino Real
rehabilitation and ADA improvements as well as citywide traffic studies initiated through public
requests.
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
3
PARKS AND RECREATION IMPROVEMENTS ($3,305,000)
Project Description
FY 19-20 CIP
Requests
(in thousands)
Field Renovations at Ray Park $1,500
BHS Pool Renovations $700
Ray Park Parking Lot Safety Improvements $400
BSD Synthetic Turf Replacement Fund $200
Murray Field Synthetic Turf Replacement Fund $150
Playground Replacement Fund $100
Central Irrigation Controller $50
El Camino Real Tree Safety $50
Parks, Picnic Tables, Benches and Fountains $50
Mills Canyon Hazard Mitigation $50
Playground Resilient Resurfacing/Treatment $50
Annual Tree Replacement $5
TOTAL: $3,305
The Field Renovations at Ray Park Project consists of providing new irrigation and sod. The
improvements will address poor drainage and uneven turf. The Project also includes improvements
to the dugout and warm-up areas to comply with the ADA. Additional funding is also included for
the Burlingame High School Pool Renovations Project, which includes a new pool shell, concrete
deck, and improvements to the pump room. The Ray Park Parking Lot Safety Improvements
consist of reconfiguring the existing parking area and providing improved vehicular and pedestrian
circulation.
The remaining projects on the list primarily consist of infrastructure maintenance projects based on
the needs assessment and replacement schedule as identified in the department’s work program.
In addition, the list includes $200,000 and $150,000 funding for future replacement of synthetic turf
at Burlingame School District facilities (BSD) and Murray Field, respectively, on an annual basis.
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
4
BUILDING FACILITIES IMPROVEMENTS ($1,450,000)
Project Description
FY 19-20 CIP
Requests
(in thousands)
Fire Station Generators $850
Building Facilities Parking Lots Resurfacing $250
ADA Improvements Program $250
Minor Building Facilities Upgrade $100
City Attorney’s Office Remodel $50
TOTAL: $1,500
The above project list consists of upgrading the generators at Fire Stations 34, 35, and 36 to bring
them into regulatory compliance. The Council previously provided funding for development of the
engineering design of the generators. The project list also includes funds for improvements to the
parking areas at the Public Works Corporation Yard and the Police Station. Also, project funding
is requested for ADA improvements as part of the City’s proactive effort to comply with ADA
regulations as well as funds for minor facilities upgrades that arise. Additionally, funding is included
to reconfigure the City Attorney’s Office to provide confidential office space for a new Deputy City
Attorney.
POLICE DEPARTMENT CAPITAL NEEDS ($500,000)
Project Description
FY 19-20 CIP
Requests
(in thousands)
Remodeling of the Jail at BPD $500
TOTAL: $500
The Police Department is currently performing a feasibility study and design for the conversion of
a portion of the jail to sleeping quarters. This will allow the officers the ability to rest following long
shifts prior to driving home in light of the greater distances that many are now traveling. The new
quarters will also provide for lactation accommodations for staff. The funding request is for the
construction of the improvements. Additional funds may be needed upon completion of the study
and determination of final scope and construction cost estimates.
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
5
PARKING ENTERPRISE FUNDED PROJECTS
Project Description
FY 19-20 CIP
Requests
(in thousands)
City’s Contribution for Construction of a Parking Structure at Lot N $1,850
Smart Parking Meters for Downtown Parking Lots $550
Downtown Public Parking Lots Improvements $250
TOTAL: $2,650
The project list above consists of the $1.85M City contribution for the construction of a new public
parking garage at Lot N to expand parking supply as part of the Village at Burlingame Project.
Additionally, the project list includes replacement of old parking meters with smart meters in parking
lots and resurfacing treatments and ancillary improvements in parking lots as needed.
GAS TAX, SB 1, MEASURE A, MEASURE I AND MEASURE M FUNDED PROJECTS
Based on the condition assessment of 84 miles of existing street infrastructure and the
recommendations from the Street Pavement Maintenance Software Program, staff is proposing a
total of $2.350M of CIP funding from a combination of Gas Tax, SB 1, Measure A, Measure I, and
Measure M funds for next year’s street repairs and resurfacing program as listed below.
• Atwater Drive – Escalante Way to Rivera Drive
• Albemarle Way – Ray Drive to End
• Arguello Drive – Escalante Way to Toledo Drive
• Benito Avenue - Hillside Drive to Easton Drive
• Castenada Drive – Trousdale Drive to City Limit
• Coronado Way – Ray Drive to Davis Drive
• Dolores Way – Mariposa Drive to Capistrano Way
• Drake Avenue – Adeline Drive to End
• Lassen Way – Davis Drive to Ray Drive
• Los Montes Drive – Margarita Avenue to Hillside Drive
• Marco Polo Way – Ray Drive to Davis Drive
• Margarita Avenue – Skyline Drive to Alturas Drive
• Mills Canyon Court - End to End
• Quesada Way – Davis Drive to Ray Drive
The above list of streets is tentative and subject to change depending on the availability of funds
and construction costs. Of the total $2.350M proposed for next year, $500,000 is from Measure I,
and the rest is from a combination of Measure A, Gas Tax, SB 1, and Measure M funds.
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
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FY 2019-20 WATER ENTERPRISE FUND PROJECTS
The City owns and maintains over 100 miles of the drinking water distribution system, with five
storage reservoirs and six pump stations. Based on a condition assessment of the City’s water
distribution system and prioritization of the Capital Improvements Plan, staff recommends a total of
$3,000,000 of improvements to the City’s drinking water system as follows:
Project Description
FY 19-20 CIP
Requests
(in thousands)
South El Camino Real Water Main Replacement Project $2,180
Emergency Water Main Replacement $300
Sensory Control and Data Acquisition (SCADA) System Upgrades $120
Water System Valve Replacements $100
Water Meter Replacements $100
Trousdale Pump Station Repairs $100
Regional Water Supply Studies/Modeling $50
Miscellaneous Painting of Above Ground Water Mains $50
TOTAL: $3,000
The above list of projects primarily consists of replacing aging water pipelines, water meters,
valves, and other necessary infrastructure. The projects identified in the above list are the next
high priority improvements identified in the Water System CIP. The project on El Camino Real has
been accelerated in anticipation of the proposed work by Caltrans.
FY 2019-20 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 (WWTP). Based on a condition assessment of both
components of the waste water collection system and the treatment plant, as well as prioritization
of the capital improvements, staff is recommending a total of $5,080,000 in improvements to the
City’s sanitary sewer system as follows:
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
7
Project Description
FY 19-20 CIP
Requests
(in thousands)
Sanitary Sewer Main Rehabilitation $1,500
Rollins Road Gravity and Force Main Rehabilitation $1,200
WWTP Infrastructure Upgrades $710
Sewer System Modeling and Master Plan Updates $600
Burlingame Avenue East of California Utility Improvements $500
Mills Canyon Sewer Access Road Repair $200
Easton Addition Subdivision Sewer Rehabilitation $150
SCADA System Upgrades $120
Force Main Sewer Study $50
Miscellaneous Sewer Root Foaming and Miscellaneous Sewer Repair $50
TOTAL: $5,080
The above list of projects primarily consists of replacing aging sanitary sewer mains and waste
water treatment plant infrastructure improvements. The Sanitary Sewer Main Rehabilitation Project
proposes to replace aging sewer lines on Vancouver Avenue, Broadway, Rollins Road, and El
Camino Real and easements on La Mesa Drive and Los Montes Drive.
FY 2019-20 STORM DRAINAGE FEE FUND PROJECTS
In 2009, Burlingame property owners approved a ballot measure to upgrade the aging and
deteriorated storm drainage system to provide 30-year design storm capacity to major creeks and
address localized flooding problems citywide. Thanks to the community’s support, approximately
$26M of improvements have been completed to date. The completed projects include the identified
Easton Creek Improvements, Marsten Pump Station, Marsten Outfall Channel, Laguna Storm
Drainage Culvert, Burlingame Creek Bypass Stub at Safeway, Burlingame Avenue Improvements,
Terrace Creek Capacity, Vancouver Bridge Repair, Summit Drive Culvert, Lorton Storm Drain
Cleaning, El Portal and Trousdale Channel Rehabilitation, Sanchez Lagoon Flap Gates Project,
and miscellaneous neighborhood projects to address localized flooding problems at 155 locations
citywide under the Neighborhood Storm Drain Improvements Program. An estimated $900,000 will
be contributed by the City of Millbrae for their portion of Pump Station Improvements at Rollins and
Cowan. For FY 2019-20, staff is recommending $4,100,000 for Storm Drainage Projects as follows:
City Council Review of Draft FY 2019-20 Capital Improvement Program May 8, 2019
8
Project Description
FY 19-20 CIP
Requests
(in thousands)
1740 Rollins and 842 Cowan Stormwater Pump Station Upgrades
(including $900k from Millbrae) $1,900
Neighborhood Storm Drain Project #12 $1,500
Easton Storm Drain Improvements $500
El Portal Creek, Trousdale Channel, Gilbreth Creek Improvements $150
Program Management 2019-20 $50
TOTAL: $4,100
The above list of projects consists of addressing localized flooding, repairs to storm drain
infrastructure, and constructing storm water treatment facilities.
FISCAL IMPACT
The estimated total funding identified to undertake the projects presented in the staff report is
approximately $25,845,000 in FY 2019-20. The funding sources include General Fund, Gas Tax,
SB 1, Measures A, I, & M, Water Enterprise Fund, Sewer Enterprise Fund, Storm Drain Fee, and
the City of Millbrae’s contribution of $900,000 as outlined above.
Exhibits:
• PowerPoint Presentation
• March 13, 2019 Staff Report
Draft Capital Improvement ProgramFiscal Year 2019-2020
City Council Budget Study Session |May 8, 2019
Overview of FY 2019-20 CIP
General Fund Projects Parking Enterprise Fund
Projects
Storm Drainage Projects
Street Resurfacing Program
Sewer System Projects
Water System Projects
+ Council Feedback
Programs FY 2019-20
Requests
(in thousands)
Mobility & Transportation Improvements *$3,360
Parks and Recreation Improvements $3,305
Building Facilities Improvements $1,500
Police Department Improvements $500
TOTAL $8,665
General Fund Proposed Fiscal Year 2019-2020 CIP
* Includes $700k of Measure I Funds
General Fund Mobility & Transportation Improvements
Project Description FY 2019-20 Requests
(in thousands)
Broadway Grade Separation
(Final Design Phase, Local Match Towards $19.8M Total) *$1,500
Sidewalk and ADA Improvements
(General Fund $500k, Measure I $700k)$1,200
Traffic Signal Upgrades $200
Pedestrian Improvements $100
Residential Street Lighting Improvements $100
Traffic Calming Improvements $100
Annual Traffic and Transportation Studies $80
El Camino Real Development
(Consultant Assistance)$80
TOTAL $3,360
* City to request $18.3M from the San Mateo County Transportation Authority
General Fund Parks & Recreation Projects
Project Description FY 2019-20
Requests
(in thousands)
Field Renovations at Ray Park $1,500
BHS Pool Renovations $700
Ray Park Parking Lot Safety Improvements $400
BSD Synthetic Turf Replacement $200
Murray Field Synthetic Turf Replacement $150
Playground Replacement Fund $100
Central Irrigation Controller $50
El Camino Real Tree Safety $50
Mills Canyon Hazard Mitigation $50
Parks, Picnic Tables, Benches and Fountains $50
Playground Resilient Resurfacing/Treatment $50
Annual Tree Replacement $5
TOTAL $3,305
General Fund Building Facilities Projects
Project Description FY 2019-20 Requests
(in thousands)
Fire Stations 34, 35 and 36 Generators $850
Building Facilities Parking Lots Resurfacing $250
ADA Improvements Program $250
Minor Building Facilities Upgrades $100
City Attorney’s Office Remodel $50
TOTAL $1,500
General Fund Police Department Projects
Project Description FY 2019-20 Requests
(in thousands)
Remodeling of Jail at BPD $500
TOTAL $500
Parking Enterprise Fund Projects
Project Description FY 2019-20
Requests
(in thousands)
City’s Contribution for Construction of a Parking Structure at Lot N $1,850
Smart Parking Meters for Downtown Parking Lots $550
Downtown Public Parking Lots Improvements $250
TOTAL $2,650
Gas Tax, SB-1 and Measures A, I and MStreet Resurfacing Program
Streets
Atwater Drive -Escalante to Rivera
Albemarle Way -Ray to End
Arguello Drive –Escalante to Toledo
Benito Avenue -Hillside to Easton
Castenada Drive -Trousdale to City Limit
Coronado Way -Ray to Davis
Dolores Way -Mariposa to Capistrano
Drake Avenue -Adeline to End
Lassen Way -Davis to Ray
Los Montes Drive -Margarita to Hillside
Marco Polo Way -Ray to Davis
Margarita Avenue -Skyline to Alturas
Mills Canyon Court -End to End
Quesada Way –Davis to Ray
TOTAL: $2,350,000
Street Resurfacing ProgramLocation Map for FY 2019-20
Capital Improvement ProgramWATER SYSTEM
Capital Improvement ProgramWATER SYSTEM
•Studies were preformed to assess the condition of the
City’s 105-mile water system
•CIP master plan prioritized over $120M of improvements
•Council approved accelerated past rate increases to
fund projects through the issuance of bonds
•$43.5M of work has been completed since 2001
–Replaced 18.5 miles of water main
–1,918 water services installed
–1,300 linear feet of fire services rehabilitated
•$81M backlog of work still remains
Water System CIPProjects Completed in FY 2018-19
Shoreland Subdivision Water Main Replacement Project
$2M
91 new water services
4,155 ft. of new water
main
Replaced old cast iron
mains with new PVC
water mains, and the
pipe size was increased
to improve fire flows
Hillside & Skyview Reservoir Exterior Coating Project
$200K
Coated the exterior of
two concrete reservoirs
to extend the life of the
reservoir and improve
water quality by
protecting the concrete
with a Heavy Pedestrian
Coating System
12 Airport Boulevard Water Main Replacement Project
$300K
470 ft. of new 12”
water main
New 12” water main
was constructed jointly
with the County of San
Mateo to provide water
to the new animal
shelter
California Drive Roundabout
$200K
350 ft. of new 12”
water main
New hydrant and
services to improve
the water system
under the roundabout
Water System CIPProposed Projects for FY 2019-20
Projects Estimated Costs
(in thousands)
South El Camino Real Water Main Replacement Project $2,180
Emergency Water Main Replacement $300
Sensory Control and Data Acquisition (SCADA) System Upgrades $120
Water System Valve Replacements $100
Water Meter Replacements $100
Trousdale Pump Station Repairs $100
Regional Water Supply Studies/Modeling $50
Miscellaneous Coating of Above Ground Water Mains $50
TOTAL $3,000
Water System CIPMap of Proposed Projects for FY 2019-20
Bayside Valve Replacement Project
SCADA System Upgrade
South El Camino Real Water Main
Replacement Project
Capital Improvement ProgramSEWER SYSTEM
Capital Improvement ProgramSEWER SYSTEM
•Studies were performed to assess the condition of the
City’s 100-mile sanitary sewer system
•CIP Master Plan prioritized over $160M of upgrades
•Council approved past rate increases to fund
accelerated projects through issuances of bonds
•$78.5M of work completed
–39.2 miles of pipeline replaced
–2,859 private laterals replaced with cleanouts
•$83M backlog of work still remains
Sewer System CIPProjects Completed in FY 2018-19
Easton Addition & Neighborhood Sewer Rehabilitation -Phase 3
$1.75M
6,230 linear feet of new sewer
pipeline
31 new sewer manholes
Citywide Sanitary Sewer Point Repair Project
$400K
41 high priority structural
deficiencies and I&I point
identified. The project removed
the structural deficiencies and
replaced sections with new PVC
pipe. Of the 41 locations, seven
were manhole rehabilitation.
Carolan-Rollins Easement Sanitary Sewer Main Relocation
$460K
Installed approximately 730
linear feet of new 12-inch
diameter PVC sewer main in
the new sanitary sewer
easement.
4 new manholes
Sewer System CIPProposed Projects for FY 2019-20
Projects Estimated Costs
(in thousands)
Sanitary Sewer Main Rehabilitation $1,500
Rollins Road Gravity and Force Main Rehabilitation $1,200
WWTP Upgrades $710
Sewer System Modeling and Master Plan Updates $600
Burlingame Avenue East of California Utility Improvements $500
Mills Canyon Sewer Access Road Repair $200
Easton Addition Subdivision Sewer Rehabilitation $150
SCADA System Upgrades $120
Force Main Sewer Study $50
Misc. Sewer Root Foaming and Misc. Sewer Repair $50
TOTAL $5,080
Sewer System CIPMap of Proposed Projects for FY 2019-20
Sanitary Sewer Main Rehabilitation
Rollins PS Force Main Improvements
Collection System Master Plan Update
WWTP Improvements
Capital Improvement ProgramSTORM DRAIN SYSTEM
Capital Improvement ProgramSTORM DRAIN SYSTEM
•City has 50 miles of storm drains, drainage channels, and
four major pump stations
•In 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
•$26M of projects completed since the passage of the
measure as promised to property owners and the
community
•$28M backlog of work still remains
Storm Drain System CIPProjects Completed in FY 2018-19
El Portal / Trousdale Channel Rehabilitation
$1.2M
23,503 SF of concrete channel
repairs
Removed build-up of sediment
accumulated in the channel
over the years to improve
drainage flow
Sanchez Lagoon Flap Gates Project
$185K
Installation of two 96-inch HDPE
flap gates
Installation of flap gates prevents
backwater from the Bay into the
surrounding neighborhood during
storm events
Neighborhood Storm Drain Project #10
$1.12M
Project locations focused on
upgrading areas that had
drainage issues during the winter
2017 storm events
Mercy Property
Vancouver/Hale
1400 Block of Bernal
1200 Block of Drake
Willborough Place
Storm Drain System CIPProposed Projects for FY 2019-20
Projects Estimated Costs
(in thousands)
1740 Rollins and 842 Cowan Stormwater Pump Station Upgrades
(including $900k from Millbrae)$1,900
Neighborhood Storm Drain Project #12 $1,500
Easton Drive Drainage Improvements $500
El Portal Channel Flap Gates Rehabilitation $150
FY 19-20 Program Management $50
TOTAL $4,100
Easton Drive Drainage Improvements
Cowan Pump
Station
Rollins Pump
Station
El Portal Creek Flap
Gates Rehabilitation
Storm Drain System CIPMap of Current & Proposed Projects for FY 2019-20
Cowan & Rollins Pump Station Upgrades
Neighborhood Storm Drain No. 11
Culvert Crossing Repairs
Fiscal Year 2019-2020Summary of Capital Improvement Program
CIP Program Categories FY 2019-20
Recommendations
General Fund Projects (includes $700k of Measure I)$8,665,000
Parking Enterprise Fund Projects $2,650,000
Street Resurfacing Program (Gas Tax, Measures A, I & M)$2,350,000
Water System Enterprise Fund Projects $3,000,000
Sewer System Enterprise Fund Projects $5,080,000
Storm Drain System Projects $4,100,000
TOTAL $25,845,000
Draft Capital Improvement ProgramFiscal Year 2019-2020
City Council Feedback
1
STAFF REPORT
AGENDA NO:
MEETING DATE: March 13, 2019
To: Honorable Mayor and City Council
Date: March 13, 2019
From: Syed Murtuza, Director of Public Works – (650) 558-7230
Subject: Review of Draft FY 2019-20 General Fund, Parking Enterprise Fund, Gas Tax,
Measure A, Measure I, Measure M, and Senate Bill (SB 1) Funded Capital
Improvement Program (CIP)
RECOMMENDATION
Staff recommends that the City Council review the proposed draft FY 2019-20 General Fund,
Parking Enterprise Fund, Gas Tax, Measure A, Measure I, Measure M, and SB 1 funded 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, Parking Enterprise Fund, Gas Tax, Measure A, Measure I, Measure M,
and SB 1 funded projects. Staff will present the CIP Program for the Storm Drainage System,
Water System, Sanitary Sewer System, and Waste Water Treatment Plant at a future meeting as
part of the overall budget presentation.
DISCUSSION
GENERAL FUND CIP
In developing the FY 2019-20 CIP, staff conducted a needs assessment of various infrastructure
owned by the City and identified $7.915M in General Fund projects; $2.65M in Parking Enterprise
funded projects; $1.85M in Gas Tax, SB 1, and Measure M funded projects; and $1.2M in Measure
I projects, for a total of $13.615M for next year’s CIP.
Below is a summary table of each of the CIP Program areas with project descriptions and costs.
Staff will provide the City Council with a detailed presentation of these projects at the March 13,
2019 Mid-Year Budget Study Session.
FY 2019-20 General Fund, Gas Tax, Measure A, Measure I and Measure M funded CIP March 13, 2019
2
MOBILITY & TRANSPORTATION IMPROVEMENTS ($3,360,000)
The CIP program includes $1.5M in local matching funds to move the Broadway Grade Separation
Project into the PS&E (detailed engineering design, specifications and plans) phase. The total cost
of the PS&E phase is expected to be approximately $15M, and the City plans to seek $13.5M in
grant funds from the San Mateo County Transportation Authority. Additionally, $500,000 in new
General Fund and $700,000 from Measure I, for a total of $1,200,000, is being proposed for next
fiscal year for the sidewalk program and associated Americans with Disabilities Act (ADA)
improvements. These funds will be combined with $700,000 in existing project fund balance for a
total of $1,900,000 in sidewalk repairs and ADA improvements next fiscal year.
Traffic signal upgrades are proposed to implement countdown pedestrian indicators at various
signalized intersections throughout the city, and camera detection upgrades will be installed at
certain priority locations. Additionally, next year’s work program includes funding for
implementation of pedestrian, traffic calming and street lighting improvements in response to
improvements identified through studies or investigations that arise throughout the year.
Funding is also proposed for consultant assistance related to the Caltrans El Camino Real
rehabilitation and ADA improvements as well as citywide traffic studies initiated through public
requests.
Project Description FY-19-20 CIP
Requests
(in thousands)
1 Broadway Grade Separation (Engineering Design Phase - Local Match)1,500$
2 Sidewalk & ADA Improvements (General Fund $500k & Measure I -$700k)1,200$
3 Traffic Signal Upgrades 200$
4 Pedestrian Improvements 100$
5 Residential Street Lighting Improvements 100$
6 Traffic Calming 100$
7 Traffic and Transportation Studies (annual)80$
8 El Camino Real Development (Consultant Assistance)80$
Total:3,360$
FY 2019-20 General Fund, Gas Tax, Measure A, Measure I and Measure M funded CIP March 13, 2019
3
PARKS AND RECREATION IMPROVEMENTS ($3,305,000)
The Field Renovations at Ray Park project consists of providing new irrigation and sod. The
improvements will address poor drainage and uneven turf. The project also includes improvements
to the dugout and warm up areas to comply with the ADA. Additional funding is also included for
the Burlingame High School Pool Renovations project, which includes a new pool shell, concrete
deck, and improvements to the pump room. Ray Park Parking Lot Safety Improvements consists
of reconfiguring the existing parking area and providing improved vehicular and pedestrian
circulation.
The remaining projects on the list primarily consist of infrastructure maintenance projects based on
the needs assessment and replacement schedule as identified in the department’s work program.
In addition, the list includes $200,000 and $150,000 funding for future replacement of synthetic turf
at Burlingame School District facilities (BSD) and Murray Field, respectively, on an annual basis.
BUILDING FACILITIES IMPROVEMENTS ($1,450,000)
Project Description FY-19-20 CIP
Requests
(in thousands)
1 Field Renovations at Ray Park 1,500$
2 BHS Pool Renovations 700$
3 Ray Park Parking Lot Safety Improvements 400$
4 BSD Synthetic Turf Replacement Fund 200$
5 Murray Field Synthetic Turf Replacement Fund 150$
6 Playground Replacement Fund 100$
7 Central Irrigation Controller 50$
8 ECR Tree Safety 50$
9 Parks, Picnic Tables, Benches & Fountains 50$
10 Mills Canyon Hazard Mitigation 50$
11 Playground Resilient Resurfacing/Treatment 50$
12 Annual Tree Replacement 5$
Total:3,305$
Project Description FY-19-20 CIP
Requests
(in thousands)
1 Fire Stations Generators 850$
2 Building Facilities Parking Lots Resurfacing 250$
3 ADA Improvements Program 250$
4 Minor Building Facilities Upgrade 100$
Total:1,450$
FY 2019-20 General Fund, Gas Tax, Measure A, Measure I and Measure M funded CIP March 13, 2019
4
The above project list consists of upgrading the generators at Fire Stations 34, 35, and 36 to bring
them into regulatory compliance. The Council previously provided funding for the development of
engineering design of the generators. The project list also includes funds for improvements to the
parking areas at the Public Works Corporation Yard and the Police Station. Additionally, project
funding is requested for ADA improvements as part of the City’s proactive effort to comply with
ADA regulations as well as funds for minor facilities upgrades that arise.
POLICE DEPARTMENT CAPITAL NEEDS ($500,000)
The Police Department is currently performing a feasibility study and design for the conversion of
a portion of the jail to sleeping quarters. This will allow the officers the ability to rest following long
shifts prior to driving home in light of the greater distances that many are now traveling. The new
quarters will also provide for lactation accommodations for staff. The funding request is for the
construction of the improvements. Additional funds may be needed upon completion of the study
and determination of final scope and construction cost estimates.
PARKING ENTERPRISE FUNDED PROJECTS
The project list above consists the $1.85M City contribution to the developer for the construction of
a new public parking garage at Lot N to expand parking supply as part of the Village at Burlingame
Project. Additionally, the project list includes replacement of old parking meters with smart meters
in parking lots, and resurfacing treatments and ancillary improvements in parking lots as needed.
GAS TAX, SB 1, MEASURE A, MEASURE I AND MEASURE M FUNDED PROJECTS
Based on the condition assessment of 84 miles of existing street infrastructure and the
recommendations from the Street Pavement Maintenance Software Program, staff is proposing a
total of $2.350M of CIP funding from a combination of Gas Tax, Measure A, Measure I, Measure
M, and SB 1 funds for next year’s street repairs and resurfacing program as follows:
• Atwater Drive – Escalante to Rivera
Project Description FY-19-20 CIP
Requests (in thousands)
1 Remodeling of the Jail at BPD 500$
Total:500$
Project Description FY-19-20 CIP
Requests (in thousands)
1 City's Contribution for Construction of a Parking Structure at Lot N 1,850$
2 Smart Parking Meters for Downtown Parking Lots 550$
3 Downtown Public Parking Lots Improvements 250$
Total:2,650$
FY 2019-20 General Fund, Gas Tax, Measure A, Measure I and Measure M funded CIP March 13, 2019
5
• Albemarle Way – Ray to End
• Arguello Drive – Granada to Sebastian
• Benito Avenue - Hillside to Easton
• Burlingame Avenue - East Lane to Bloomfield
• Castenada Drive – Trousdale to City Limit
• Coronado Way – Ray to Davis
• Dolores Way – Mariposa to Capistrano
• Drake Avenue – Adeline to End
• Lassen Way – Davis to Ray
• Los Montes Drive – Margarita to Hillside
• Marco Polo Way – Ray to Davis
• Margarita Avenue – Skyline to Alturas
• Mills Canyon Court - End to End
The above list of streets is tentative and subject to change depending on the availability of funds
and construction costs. Of the total $2.350M proposed for next year, $500,000 is from Measure I,
and the rest is from a combination of Measure A, Gas Tax, Measure M, and SB 1 funds.
FISCAL IMPACT
The estimated cost of the proposed CIP program as identified in this staff report is $13.615M as
follows:
• General Fund $7,915,000
• Gas Tax, Measure A, Measure M and SB 1 $1,850,000
• Measure I ($700k for sidewalks & $500k for streets)
• Parking Enterprise Fund
$1,200,000
$2,650,000
Total $13,615,000
Exhibit:
• PowerPoint Presentation