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HomeMy WebLinkAboutMin - CC - 2020.05.13CITY O BURLINGAME $AarEo � xE � BURLINGAME CITY COUNCIL Approved Minutes Budget Study Session on May 13, 2020 1. CALL TO ORDER A duly noticed meeting of the Burlingame City Council was held on the above date online at 6:31 p.m. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Mayor Beach. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, O'Brien Keighran, Ortiz MEMBERS ABSENT: None 4. PUBLIC COMMENT There were no public comments. 5. STAFF REPORTS a. ADOPTION OF A RESOLUTION AMENDING THE FY 2019-2020 OPERATING AND CAPITAL BUDGETS TO REFLECT REVISED PROJECTIONS FOR THE REMAINDER OF THE FISCAL YEAR Finance Director Augustine began by discussing the March 11 Mid -Year Budget Study Session. She explained that staff had rosy projections for the rest of FY 2019-20, but the projections were unraveled by the pandemic. She stated that the Coronavirus pandemic has created unprecedented destruction to the markets. She discussed the drop in personal income and the decline in TOT and sales tax. Accordingly, staff wants to amend the current fiscal year budget to reflect the changes in projections. Councilmember Colson asked if the $6.5 million funding of the Capital Reserve could later be reversed if there are any are holes in the City's future budgets. Finance Director Augustine replied in the affirmative. She explained that Council can determine how best to use the Capital Reserve. She stated that the Capital Reserve is intended for capital projects, but Council has the authority to utilize these funds for emergency or operational purposes. Mayor Beach asked about the City's sales tax projections. She asked if the County or State has provided any additional information or guidance on sales tax projections. Finance Director Augustine stated that it is everyone's best educated guess. She noted that HdL, the City's tax consultant, drew up their figures based on revised State projections for the current fiscal year and the next fiscal year. She explained that HdL projected decreases by sector, and therefore these were applied to the City's mix. She added that staff had a meeting with HdL and went over fourth quarter results from 2019, the most recent sales tax data. Mayor Beach stated that the County extended property tax deadlines and asked if there is any concern that the City won't receive the projected amount. Finance Director Augustine explained that the City participates in the Teeter Plan, which means it receives all the property taxes that are due to the City, and the County goes after delinquencies and penalty payments. Finance Director Augustine stated that sales tax reporting always lags. She explained that the City does not obtain actual sales tax figures until four months after the transactions. She stated that sales tax had looked good through December 31, 2019. However, the City has no idea what is happening currently and what happened in the first quarter of 2020. She explained that because the Governor allowed a deferral of the payment and filing of sales taxes, the City won't know for quite some time. Vice Mayor O'Brien Keighran noted that the staff report states that COVID-19 would run its course by September. She explained that this was contrary to what she was hearing. She stated that the County was discussing a potential second wave of the virus in the fall. Finance Director Augustine stated that the statement deals mainly with the uncertainties that the City has for the upcoming fiscal year. She noted that the City's projections do not include a second wave. She added that when the report states that COVID-19 has run its course, that means that the economic damage has run its course, and recovery will start in September. Mayor Beach asked the Finance Director to summarize the revenue changes that occurred this fiscal year. Finance Director Augustine stated that staff is estimating a $9.9 million decrease in revenues for the current fiscal year. Additionally, staff is estimated revenue decreases in other funds including $1.7 million in sewer service charges. Mayor Beach opened the item up for public comment. There were no comments. Councilmember Colson stated that when AB 5 passed, there were changes to the City's budget that had to occur. She asked if this was reflected in this year's budget or next year's budget. Finance Director Augustine stated that there was limited impact to this year's budget. However, there would be greater impact to next year's budget. Councilmember Colson made a motion to adopt Resolution 057-2020; seconded by Councilmember Ortiz. The motion passed unanimously by roll call vote, 5-0. b. STUDY SESSION: FISCAL YEAR 2020-21 BUDGET Finance Director Augustine discussed the economic about-face that occurred as a result of COVID-19. She explained that it created a major shift in City revenues, eliminated the ability to transfer funds to the Capital Investment Reserve, and created a reliance on reserves. W Finance Director Augustine stated that staff had to focus on the short-term to a greater extent than usual for the upcoming fiscal year budget. She explained that what happens in the next six to 12 months will determine whether the City can weather this storm well or will need to brace for a longer economic downturn. She added that the City's rainy -day funds are limited, and staff can't continue to draw heavily on reserves in future years. Finance Director Augustine discussed General Fund Challenges: • Provide day-to-day operations and capital needs required to sustain high -quality services • Fund long-term, legally obligated liabilities • Provide for infrastructure needs • Advance planning of longer -term priority initiatives, policies, and strategies Finance Director Augustine discussed the various ways that staff is addressing the economic challenges for the proposed fiscal year 2020-21 proposed budget: • Assumes continued weakness in General Fund revenues for first half of fiscal year • Reduces CIP transfer out by $6 million • Eliminates transfer to Capital Investment Reserve • Utilizes $2 million of previously set -aside funds for debt service of 2019 Lease Revenue Bonds • Continues funding for § 115 Pension Trust Fund ($2.25 million General Fund: nearly $2.8 million City-wide) • General Fund revenues down 13.9% from fiscal year 2019-20 adopted budget (roughly $10.6 million) • Total General Fund Operating Expenditures up 6.1% from fiscal year 2019-20 adopted budget • Total General Fund balance to decrease $1.13 million ($2.25 million restricted for contribution to § 115 Pension Trust Fund) Finance Director Augustine reviewed General Fund revenues. She noted that some of the City's major revenues are going to be slower to increase than they were to decrease. She added that some of the revenue streams won't perform as well as they had in the past. Finance Director Augustine reviewed Transient Occupancy Taxes ("TOT"). She displayed a bar chart that showed TOT filings each month compared with last year's filings. There was a clear drop in March as a result of the COVID-19 pandemic. She explained that the City allowed hotels within its jurisdiction to defer remittance of taxes collected for March through June until July 31. She noted that the filing of the returns is still required, and therefore the City has data through March. Finance Director Augustine reviewed Property Taxes. She stated that staff believes property taxes will continue to grow at a similar rate, 6.5%, to this current fiscal year. She added that there is a slight decrease in supplemental secured taxes due to the current slowdown in property transfers. Finance Director Augustine discussed the Educational Revenue Augmentation Fund ("ERAF"). She stated that the City received $2.38 million in ERAF funds during the current fiscal year. She noted that staff is projecting the same amount for the upcoming fiscal year. She explained that there are a lot of factors involved in the ERAF calculation. She stated that the City made a significant downward adjustment in property tax in lieu of the VLF shortfall. She noted that it shows that the funding source is variable. Vice Mayor O'Brien Keighran explained that the staff report states that staff predicts that the hotels will recover to about 70% by December 2020. She asked how staff came to this conclusion. Finance Director Augustine stated that this was based on a conversation with the hoteliers in April. Vice Mayor O'Brien Keighran stated that she felt that 70% was optimistic and thought it would be much less. She explained that the City previously maintained high occupancy rates because of airline staff and conferences. She noted that based on statements from both the Governor and County Health Officer, it didn't seem that any type of large gatherings would be possible for the rest of the calendar year. Finance Director Augustine stated that she was informed by San Mateo County/Silicon Valley Convention & Visitors Bureau President John Hutar that until the East Coast opens up, hotels won't see the same levels of business travel. Vice Mayor O'Brien Keighran asked that the Finance Director check in with Mr. Hutar to see if his projections had changed. City Manager Goldman noted that the City's budget isn't static. Therefore, the staff and Council can revisit the budget at a later point in the year. Councilmember Ortiz concurred with Vice Mayor O'Brien Keighran about the projections for the hotels. He stated that he believed 70% was optimistic. Finance Director Augustine stated that staff didn't utilize the 70% projection for the entire fiscal year. She explained that staff was given projections for each month so that it was a slow crawl up to 70%. Mayor Beach asked if the City should be anticipating a smaller ERAF payment in the next fiscal year. Finance Director Augustine stated that staff is keeping this number stable. Councilmember Colson asked if the 70% referred to TOT or occupancy rate. Finance Director Augustine replied that it was TOT. Finance Director Augustine reviewed sales tax. She explained that taxable sales for the first half of FY 2019-20 were down 5.2% compared to FY 2018-19. However, the Wayfair decision boosted the San Mateo County pool by 5.7%. She noted that the different business sectors were expected to recover at varying rates throughout FY 2020-21. Finance Director Augustine stated that two statewide programs were established to help small businesses: • Deferred sales tax liabilities and filings for the first quarter of 2020 for 90 days • Allowed up to 12 months of interest free installment plan for up to $50,000 in tax liability She noted that nearly 92% of the City's filers and 54% of the total sales tax dollars are subject to the 90-day extension. She added that about 80% of Burlingame filers are able to take advantage of the 12-month interest free installment plan. She explained that both plans were meant to offer a bit of a reprieve cash flow wise to allow businesses to remain afloat during the crisis. However, not only will these programs 2 significantly impact the City's budget, but it also means that the City is unlikely to obtain reliable sales tax data from the State until mid -year 2021. Finance Director Augustine reviewed a pie chart that outlined the revenue distribution for the General Fund in FY 2020-21: • 36.9% - Property Tax • 25% - Transient Occupancy Tax • 21.2% - Sales Tax • 16.9% - Other Revenue Finance Director Augustine reviewed the expenditure highlights for the upcoming fiscal year: • General Fund expenditures are up compared to current year adjusted budget • Increases in overall personnel expenditures (3.2%) due to added FTEs and benefit cost increases • Other operating cost increases up 1.3% (3.8% if adjusted for current -year COVID assistance costs) Finance Director Augustine reviewed the authorized FTEs for the upcoming fiscal year. She noted that there are no changes to the FTEs for the upcoming fiscal year. All additional FTEs were approved during the current fiscal year. Finance Director Augustine stated that the proposed budget includes • $66.1 million in revenues • $63.9 million in expenditures • $2.7 million in debt service • $3.25 million in capital project fund Finance Director Augustine noted that the City's fund balance would be down $1.1 million. Councilmember Brownrigg stated that in FY 2018-2019, the City's revenues were $84.5 million. He noted that FY 2019-2020 had one horrible quarter, but that the City's revenues were projected to be $69 million. He explained that when looking at the upcoming fiscal year, the City is seeing comparable revenue numbers to the current fiscal year. He stated that he was concerned that this assumption was overly optimistic. Finance Director Augustine stated that the adopted budget for FY 2019-2020 showed that the City's sales taxes decreased by $2 million. Finance Director Augustine next discussed the City's Capital Improvement Program. She stated that this is where a lot of the cuts would take place for the upcoming fiscal year. Finance Director Augustine reviewed the five-year forecast. She noted that when staff talks about 100% economy recovery, they look at FY 2018-19 actuals. She stated that there are three likely scenarios: • Scenario A — most probable — reflects a 90% revenue recovery within 18 months (U Shaped) She explained that this scenario stresses a gradual return to a new normal. She added that under this scenario, deficits would continue through FY 2021-22. She noted that under this model in FY 2023-24, there would be some surplus, but not enough to transfer $3 million into the Capital Investment Reserve. 5 • Scenario B —rosier forecast —reflects a 100% revenue recovery in 12 months (V Shaped) She explained that this scenario suggests a snap back to normal, emphasizes pent up demand, and suggests a return to surpluses by FY 2021-22. • Scenario C — gloomier forecast — reflects a 90% revenue recovery in five years She explained that this is a more pessimistic approach; under this scenario, nothing would come back to normal anytime soon. She stated that revenue recovery under this scenario takes eight years. Finance Director Augustine stated that all three scenarios include • Same projections for salary and benefits • Same transfers to fund the § 115 Pension Trust • Continued increase in property taxes • Transfers to Capital Projects per five-year plan Finance Director Augustine noted that all three scenarios exclude: • One-time revenues • Draws from the § 115 Pension Trust Finance Director Augustine stated that the City has $24.6 million in the Capital Investment Reserve after funding the Community Center project. She noted that this is not part of the five-year forecast, but she explained that when the City talks about the Capital Improvement Projects, it is clear that these funds will be needed for the Broadway Grade Separation. She added that the Council will also need to think about the $24 million in funding for the El Camino Real underground project. Finance Director Augustine stated that staff assumed no draw downs on the § 115 Pension Trust in the five- year forecast. Instead, staff assumes that the City will continue to contribute to the pension trust fund. She noted that the trust fund balance on March 31, 2020 was $11.2 million. Unfortunately, the pension trust fund is invested in instruments that can lose value. Finance Director Augustine reviewed the water fund. She explained that the City's last rate increase was January 1, 2019. She added that the last increase for the sewer fund was January 1, 2012. Mayor Beach asked that the slides from Finance Director Augustine's presentation be added to the website as it is a helpful summary of the City's finances. City Manager Goldman replied in the affirmative. Councilmember Colson stated that the City's § 115 Trust is invested in a diversified portfolio that is similar to Ca1PERS. She noted that as the City's timeline gets closer to needing to draw down from the § 115 Trust, the City should take a portion of the funds and put them in a short-term investment fund. She added that there would be less volatility in a short-term investment fund. Finance Director Augustine noted that part of the portfolio is in shorter -term obligations. She added that Council would receive a detailed report about this in the fall. She stated that the total life of the fund shouldn't be for more than 15 years. Councilmember Colson asked what the funding target was for the § 115 Trust. Finance Director Augustine stated that it was $15 million. Con Mayor Beach asked if there were any investments that the proposed budget contemplates for the City's IT needs. Finance Director Augustine stated that the internal service fund is largely IT. She noted that it has seen an increase over the prior year. She added that the City purchased several laptops during the current fiscal year, and that is expected to continue. Mayor Beach opened the item up for public comment. There were no comments. Councilmember Brownrigg stated that he appreciated staff s work on the proposed budget. He noted that everyone is in an era of not knowing how fast the rebound will come and how deep the recession may be. He explained that when he looks at what is happening to the economy, it looks to him like a combination of 9/11 and the Great Recession. This is because there has been a massive hit to the travel and hospitality industry and an inevitable massive hit to the economy. He added that he finds it hard to believe that everything will return to normal. He noted that when you look back at 9/11, it took the City's hotel revenues ten years to return to pre-9/11 levels. He added that if you look at the Great Recession, it took six years for sales tax to recover. Therefore, he explained that he was concerned that the City's probable scenario was too optimistic. He explained that the Council should adopt a more conservative forecast for the next two to three years. Councilmember Brownrigg stated that he would take hotel revenues down to $14 to $15 million and decrease projected sales tax revenues. He explained that he would find it helpful if the City revisits these numbers at a later date. Councilmember Brownrigg noted that the City entered the unexpected downturn with one of the strongest balance sheets in the entire state. He added that Council should be proud that the City will be able to continue providing great service for the next two to three years without a problem. He stated that he was certain that this is true because the City went in with 50% to 60% of the General Fund in reserve. Councilmember Brownrigg asked that the City lower its revenue forecast and then look at what happens to the City's reserves. Councilmember Brownrigg asked if the decreasing § 115 Trust Fund payments was because the City was on a path to fully funding the trust. Finance Director Augustine replied in the affirmative. Councilmember Brownrigg stated that one of the questions he felt the Council needed to focus on was how the City manages its reserves and how comfortable the Council feels that the City can continue to support that level of expense for the next two to three years. Councilmember Ortiz stated that he concurred with Councilmember Brownrigg. He explained that for years, the Council has discussed the volatility of TOT, and they have expected that the numbers would decrease at some point. However, no one predicted it would come down as dramatically as it did. He stated that he keeps thinking about the conversation with the hoteliers and the 70%. He noted that he believed that not only would occupancy drop, but the average room rate would also drop. Therefore, when you combine the two, he believed the hit would be bigger than what is projected in the proposed budget. He stated that he believed the City should have a slightly more conservative outlook concerning projected revenues. 7 Mayor Beach discussed the proposed budget. She stated that Council could choose to lower the projections. However, the Council wouldn't have anything scientific to go by on what to reduce the projections to. She asked when staff recommended that Council revisit the proposed budget. Finance Director Augustine explained that the Capital Projects that staff is proposing for FY 2020-21 are very conservative and have been reduced from the mid -year suggestions. She stated that the change in the Economic Stability Reserve is caused by the City's projected revenue decline. She stated that when the unassigned fund balance goes below zero, the City would then not be funding the Economic Stability Reserve to the extent that the City desires. She added that there isn't a scientific way to predict the City's economic stability. She noted that once staff has received all the figures for FY 2019-20, they will have a better idea of what the fund balances are and if adjustments should be made. Finance Director Augustine explained that if there is a second wave of the virus, there would be a need to discuss the budget at a sooner date. She stated that the City would be discussing pensions in the fall. She added that the City anticipates a zero percent rate of return for Ca1PERS in the current fiscal year, which will flow through to the City's rates in subsequent years. She noted that things will undoubtedly come out differently with pensions and other major expenses. Councilmember Colson stated that what she liked about the budget is that the City can maintain the level of City services that has been provided in the past. Councilmember Colson stated that she has talked to a lot of companies and that they are on an extended stretch of when they are going to bring people back. She noted that there won't be any big conferences or conventions for a while. She discussed two factors that will influence the City's TOT: airline industry and demand from big corporate interests. She stated that when Airbnb and other companies lay off 2,000 employees, it shows that they don't believe the travel industry is going to come back. She explained that she would be okay with reducing the TOT. She added that she would rather the City underpredict projected revenues so that things didn't need to be scaled back at a later date. Vice Mayor O'Brien Keighran stated that she agreed with her colleagues and thought the City should go with the most conservative approach. She explained that her biggest issue was the TOT as she believed it would be worse than what is projected in the staff report. She noted that Facebook and LinkedIn don't plan on bringing their employees back to their offices until January. She added that conference travel was already declining before the pandemic and thought it would take a large hit. She noted that she didn't think people would feel comfortable in big crowds. Mayor Beach stated that it sounded like there was unanimous consent that TOT would be a lot lower than what was projected. Finance Director Augustine stated that besides for direction on the budget, staff was looking for direction on whether Council would like to keep community funding at $55,000 or change that number. Councilmember Brownrigg stated that he believed that Council's request to decrease the TOT and other revenue projections wasn't more conservative, it was more realistic. He explained that he believed there would be a second wave of the virus and that additional restrictions would be placed on economic behavior. N. Councilmember Brownrigg asked how the City is tracking the potential revenue that may come from the Federal government to cities and whether strings are attached. He noted that there are some in Congress that want to attach requirements to municipal aid. City Manager Goldman explained that FEMA will reimburse the City for cleaning supplies, PPE, and other such items. She noted that the City is tracking these expenses. She added that the email the Council received from Representative Speier's District Director Brian Perkins was what some members of Congress are asking for. She explained that if the City did receive the $5 to $10 million outlined in the email, there would be no strings attached to the funds. She stated that the City's DC lobbyist is sending staff lots of information about what is going on in Congress. Councilmember Brownrigg stated that he believed funds would come to the cities from the Federal government. He noted that the City should consider including a line in the budget stating that there is potential Federal aid but at this point it can't be predicted. City Manager Goldman stated that the City doesn't put things into the five-year forecast until it is fully cooked. City Manager Goldman asked the Council what they would like the Community Funding level to be set at. She noted that the City recently gave $120,000 to Samaritan House, $65,000 to CALL Primrose, and $20,000 to HIP Housing. She added that all three agencies have submitted for Community Funding for general purposes. Councilmember Ortiz stated that the City has done a big part in donations and noted that he would be comfortable staying at the same $55,000 limit. Council agreed with Councilmember Ortiz. c. CITY COUNCIL REVIEW OF DRAFT FY 2020-21 CAPITAL IMPROVEMENT PROGRAM Assistant DPW Art Morimoto stated that staff presented Council with their proposed FY 2020-21 Capital Improvement Program projects at the Mid -Year Budget Study Session in March. However, as a result of COVID-19, staff has reduced the list of proposed projects. Mr. Morimoto began with an overview of the proposed CIP projects for FY 2020-21 and how the list was reduced as a result of COVID-19: General Fund Mid -Year Proposed Reduced CIP (in Public Health and Categories Amount (in thousands) thousands) Safe (in thousands) Parks and Recreation $3,255 $555 $405 Improvements Building Facilities $1,255 $0 $0 Improvements Bicycle, Pedestrian and $4,130 $1,800 $1,250 Traffic Improvements Total $8,610 $2,355 $1,655 I Mr. Morimoto noted that the original list of projects included $1 million in funding from Measure I for sidewalk repairs. However, this number was reduced to $800,000. Mr. Morimoto reviewed the proposed list of Parks and Recreation projects for FY 2020-21 funded by the General Fund. Project Description Mid -Year Proposed Reduced CIP (in Public Health and Amount (in thousands) thousands) Safe (in thousands) Cuernavaca Field $1,600 - - Renovations and ADA Improvements Bayside Park Parking $900 - - Lot, Pathway ADA and EV Charging BSD Synthetic Turf $200 $200 $200 Replacement Fund Murray Field Synthetic $150 $150 $150 Turf Replacement Fund Pathway and Landscape $100 $50 - Improvements Athletic Field $100 $50 - Renovations Fund Playground Replacement $100 $50 - Fund Parks Safety and $50 $50 $50 Maintenance Improvements Playground Resilient $50 - - Resurfacing/Treatment Annual Tree $5 $5 $5 Replacement Parks and Recreation $3,255 $555 $405 Improvements Total Mayor Beach stated that for this conversation it would be important for Council to understand the substantive differences between "Reduced CIP" and "Public Health and Safety" categories. Mr. Morimoto stated that Council could choose whether to approve the Reduced CIP list of projects or have staff only undertake projects that were focused on Public Health and Safety. Mayor Beach asked for more explanation on what types of pathway and landscape improvements the City wouldn't have if they opted for the Public Health and Safety list of projects. Parks and Recreation Director Glomstad stated that for the project descriptions that are "funds" such as BSD Synthetic Turf Replace Fund, those are to build a bank so that when staff needs to do a large project, they will draw less on the General Fund. She noted that every field the City has needs to be renovated. She explained that Ray Park will hopefully be renovated this summer. She added that next up was Cuernavaca Park, but this would be put on the back burner. 10 Parks and Recreation Director Glomstad stated that the Parks Safety and Maintenance Improvements project was for items that arise during the year and need repair for everyone's safety. Mayor Beach asked what the City would lose if they didn't move forward with the Athletic Field Renovations Fund. Parks and Recreation Director Glomstad stated that the City wouldn't be losing anything. She explained that the funds were to create a bank for future projects. Councilmember Brownrigg asked if they should vote on whether to select the Reduced CIP project list or Public Health and Safety project list for each department or wait until the end of the presentation. He noted that he was in favor of the Reduced CIP project list for Parks and Recreation. City Manager Goldman explained that in total the Reduced CIP project list for the City would cost $14.1 million versus only $13.4 million for the list of Public Health and Safety projects. She noted that the approximate $700,000 difference was in General Fund projects. She suggested that the Council review all the General Fund projects and then discuss what to do. Mr. Morimoto reviewed the proposed list of Building Facilities projects for FY 2020-21 from the General Fund. Project Description Mid -Year Proposed Reduced CIP (in Public Health & Safety Amount (in thousands) thousands) (in thousands) Main Library — HVAC $400 - - and EMS Upgrades Public Works Corp Yard $350 - - - HVAC and EMS Upgrades Fire Station 35 Traffic $225 - - Signal Upgrades Roof Repair and $100 - - Replacement Plans - Depot, Police Station, Corp Yard, City Hall, Fire Stations 34 and 36 Facilities ADA $100 - - Improvements Facilities CIP Program $50 - - Management Building Facilities $1,225 - Improvements Total Mr. Morimoto stated that staff is recommending that all of the above listed projects be deferred. Councilmember Brownrigg asked about repairing the roofs at Fire Stations 34 and 36. He noted that the City is responsible for the fire stations, but that the stations serve three cities. He wanted to make sure that 11 whatever the City is putting off is okay. Mr. Morimoto stated that this item was intended to be a comprehensive roof replacement plan. Councilmember Brownrigg asked if this project was more of a deep inspection of all of the roofs instead of actual roof work. Mr. Morimoto replied in the affirmative. Councilmember Colson stated that she wanted to make sure that everything that needs to get done at the fire stations is being done since people live there. Mayor Beach asked if the renovations that were needed on the fire stations have been accomplished. Mr. Morimoto stated that significant improvements were made at Fire Station 35. He added that staff is in constant discussions with fire staff to evaluate if other improvements are needed. Mr. Morimoto reviewed the proposed list of Bicycle, Pedestrian, and Traffic Improvement projects for FY 2020-21 from the General Fund. Project Description Mid -Year Proposed Reduced CIP (in Public Health & Safety Amount (in thousands) thousands) (in thousands) Sidewalk and ADA $1,400 $800 $800 Improvements (General Fund - $400,000, Measure I - $1 million) (Revised General Fund — O and Measure I - $800,000) Lyon Hoag $950 $500 $300 Neighborhood Traffic Calming — Implementation Bicycle and Pedestrian $500 $300 - Master Plan Improvements Oak Grove/Carolan $500 - - Traffic Signal Improvements City Hall Traffic $200 - - Improvements — Roundabout Concepts City-wide Traffic Signal $200 $50 $50 Upgrades Neighborhood Traffic $100 $50 $50 Calming Improvements El Camino Real $100 $50 - Consultant Assistance Pedestrian Improvements $100 $50 $50 12 Traffic and $80 - - Transportation Studies (Consultant Services) Bicycle, Pedestrian and $4,130 $1,800 $19250 Traffic Safety Improvements Total Mayor Beach asked staff to explain the El Camino Real Consultant Assistance. Mr. Morimoto stated that as Caltrans moves forward with the renewal project, there could be technical issues that arise that staff feels need some consultant assistance. Vice Mayor O'Brien Keighran asked Mr. Morimoto to elaborate on the differences between the Reduced CIP project list and Public Health and Safety project list for Lyon Hoag. Mr. Morimoto stated that staff would be making a presentation to Council on May 18 about potential traffic calming solutions for Lyon Hoag. He explained that phase 1 is implementation of low -hanging fruit measures, like signage, crosswalks, speed bumps, and temporary bulb -outs. He stated that the $950,000 covers the entirety of phase 1, and the Reduced CIP and Public Health and Safety proposals reduce the funding for phase 1. Vice Mayor O'Brien Keighran asked if there are any specific items that wouldn't be implemented. Mr. Morimoto stated that after the May 18, 2020 Council meeting, staff would consider which items to pursue given the budget recommendation. Mr. Morimoto stated that as requested at the March Mid -Year Budget Study Session, staff put together a chart of the General Fund five-year CIP and magnitude of cost in the future. CIP Program 2021-21 (in 2021-22 (in 2022-23 (in 2023-24 (in 2024-25 (in Beyond (in thousands) thousands) thousands) thousands) thousands) thousands) Parks and $555 $4,255 $3,055 $1,755 $1,705 - Recreation Facilities - $1,350 $1,350 $1,350 $1,350 - Streets $1,000 $3,000 $2,230 $2,250 $1,980 - (including Bike/Ped) Broadway - - $15,000 - - - Grade Separation El Camino Real - - - $24,000 - - Undergrounding City Hall - - - - - $40,000 Total $1,555 $8,605 $21,635 $29,355 $5,035 $40,000 He noted that the Measure I funds are not included in the above chart. Additionally, he stated that the higher numbers in FY 2021-22 represent some of the deferred CIP from this upcoming fiscal year. He stated that the large funding needs for the Broadway Grade Separation project and El Camino Real Undergrounding will not be one lump sum and will most likely extend over several years. 13 Parks and Recreation Director Glomstad stated another reason for the jump in funding for Parks and Recreation is the obligation to the school district for the remaining costs of the pool improvements. Councilmember Colson asked what funding source would be used for the $10 million to complete the Community Center. Parks and Recreation Director Glomstad stated that it is funded by the bond and Capital Investment Reserve. Councilmember Ortiz asked if the City would be required to put the funds up front for the Broadway Grade Separation. Mr. Morimoto stated that it would depend on the nature of the grants and the match requirement. Mr. Morimoto stated that at the Mid -Year Budget Study Session, staff had originally proposed $7.6 million in General Fund CIP projects. However, now staff is proposing either $1.5 million in Reduced CIP projects or $855,000 in only Public Health and Safety projects from the General Fund. Mayor Beach opened up the item to public comment. No one spoke. Councilmember Brownrigg stated that he supported the Reduced CIP list of projects. Councilmember Ortiz and Vice Mayor O'Brien Keighran agreed with Councilmember Brownrigg's suggestion. Councilmember Colson asked if projects aren't taken care of this year, will they just roll over until next year. Mr. Morimoto replied in the affirmative. Councilmember Colson stated that she was comfortable with the Reduced CIP list of projects. Mayor Beach stated that she had been leaning towards just undertaking the Public Health and Safety list of projects in order to save $700,000 while the economy is in a state of flux. She discussed whether because Council asked staff to reduce TOT projections, the Council should rethink CIP funding. Mayor Beach acknowledged that a majority of Council wanted to proceed with the Reduced CIP list of projects. Mr. Morimoto reviewed the proposed list of Parking Enterprise Fund projects for FY 2020-21. Project Description Mid -Year Proposed Reduced CIP (in Public Health & Safety Amount (in thousands) thousands) (in thousands) Parking Structure — Lot $350 $350 $350 N Improvements — Pay Stations, Dynamic Signage, EV Charging, Security Downtown Parking Lot $500 - - Resurfacing Parking and Garages $850 - - Total 14 Mr. Morimoto reviewed the proposed list of streets to be resurfaced utilizing Gas Tax, SB 1, and Measures A, I, and M funds. • Summit Drive — Burlingview to Belvedere • Bayview Place — Airport Boulevard to end • Edwards Court — Rollins to end • Guittard Road — Rollins to end • Cortez Avenue — Adeline to end • Alpine Avenue — Carolan to Morrell • Plymouth Way — Dwight to Bloomfield • Balboa Avenue — Ray to Adeline • Easton Drive — Vancouver to Benito • Loyola Drive — Frontera to Trousdale • Vancouver Avenue — Adeline to end • Clovelly Lane (microsurface) • Meadow Lane (microsurface) • Killarney Lane (microsurface) Mr. Morimoto noted that while the street resurfacing program is not funded by the General Fund, staff is recommending a reduction from $2.56 million to $1.6 million. Mr. Morimoto reviewed the proposed list of Water System CIP projects for FY 2020-21. Projects Estimated Cost (in thousands) South El Camino Real Water Main Replacement Project $1,800 Glenwood and Burlingame Heights Water Main Replacement Project $525 Burlingame Park Water Main Replacement Project $400 Hillside and Skyview Reservoir Site Improvements $300 Water Planning — Studies/Modeling $275 Trousdale Pump Station Improvements $100 Water Meter Replacements $100 Total $3,500 He stated that the first three projects on the list are funding for pipeline replacement projects that staff undertake annually throughout the city. He explained that the South El Camino Real project will complete the remaining water improvements required on El Camino Real. Councilmember Brownrigg asked if this is the part of the CIP that is also responsible for storm drains. Mr. Morimoto replied in the negative and stated that this is the potable water system. Mr. Morimoto reviewed the proposed list of Sewer System CIP projects for FY 2020-21. 15 Projects Estimated Cost (in thousands) Wastewater Treatment Plant Upgrades $800 El Camino Real Sewer Rehabilitation $500 1740 Rollins Road Pump Station Force Main Project $500 Total $1,800 He explained that the Sewer Enterprise Fund is anticipating reduced revenue due to the impact of COVID- 19. He added that the CIP has been reduced this year as a result. Mayor Beach asked if the El Camino Real Sewer Rehabilitation project would happen before the Caltrans construction, or would it happen in conjunction. Mr. Morimoto stated that it is intended to be completed before the Caltrans project. Mayor Beach stated that this would be an additional disruption for the community and asked if it could all be done at once. Mr. Morimoto stated that this work needed to be done prior to other work. Mr. Morimoto reviewed the proposed list of Strom Drain CIP projects for FY 2020-21. Projects Estimated Cost (in thousands) Neighborhood Storm Drain #13 $1,500 Large Diameter Storm Drain Cleaning $1,000 Burlingame Avenue Storm Drainage Improvements $1,000 Culvert Crossing Repairs, Phase 2 $1,000 Total $4,500 Councilmember Brownrigg stated that one of the things that stuck with him in 2009 is that the City didn't have the reserves it has today. He explained that at that time, the City had to starve infrastructure investment, which led to a costly catch up. He noted that when it comes to the storm drains, he wanted to make sure that the City is investing here in a way that is likely to diminish impacts on residents and City liability. Mayor Beach concurred with Councilmember Brownrigg. Mr. Morimoto ended with a summary of the proposed Capital Improvement Program for FY 2020-21. CIP Program Mid -Year Proposed Reduced CIP (in Public Health and Categories Amount (in thousands) thousands) Safe (in thousands) General Fund Projects $8,610 $2,355 $1,655 (Measure I) Parking Enterprise Fund $850 $350 $350 Projects Street Resurfacing $2,560 $1,600 $1,600 Program (Gas Tax, 16 Measures A, I, and M Water Enterprise Fund Projects $3,500 Sewer System Enterprise Fund Projects $1,800 Storm Drainage System Projects $4,500 Total $21,820 $14,105 $13,405 Mayor Beach opened the item up to public comment. No one spoke. Mayor Beach thanked staff for the presentation. 6. ADJOURNMENT Mayor Beach adjourned the meeting at 9:00 p.m. Respectfully submitted, /s/ Meaghan Hassel -Shearer City Clerk 17