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HomeMy WebLinkAboutMin - CC - 2024.05.22 (Budget Study Session)CITY 0 BURLINGAME BURLINGAME CITY COUNCIL Approved Minutes FY 2024-25 Budget Study Session on May 22, 2024 1. CALL TO ORDER A duly noticed meeting of the Burlingame City Council was held on the above date in person and via Zoom at 7:02 p.m. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Desiree Thayer. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, Pappajohn, Stevenson MEMBERS ABSENT: None There were no requests. ��7�I 3�[��L�Itrlf•I�►1t�� There were no public comments. a. DISCUSSION OF THE CITY'S FISCAL YEAR 2024-25 BUDGET; ADOPTION OF RESOLUTION TO APPROVE PERSONNEL CLASSIFICATION AND POSITION CHANGES AND ADOPTION OF RESOLUTION TO AMEND THE FY 2023-24 OPERATING BUDGET Finance Director Yu -Scott began with an update on the FY 2023-24 General Fund projection: General Fund (in thousands) Adopted Mid -Year Amended Total Budget Revised Budget Budget Amended Changes ($) Total Revenue $80,510 $81,930 $83,642 $1,712 1 Expenditures • Department Expenditures ($74,519) ($79,487) ($79,582) ($95) • Transfers to Capital Projects ($6,620) ($7,084) ($8,564) ($1,480) • Other Transfer In (Out) ($1,757) ($1,752) ($1,752) 0 Total Expenditures ($82,896) ($88,323) ($89,898) ($1,575) Net Operating Surplus (Deficit) ($2,386) ($6,393) ($6,256) $137 Finance Director Yu -Scott reviewed the proposed FY 2024-25 General Fund revenues Revenue Category Amount Property Tax $31,417,115 Sales and Use Tax $17,493,660 Transient Occupancy Tax $22,666,000 Other Taxes • Franchise Tax • Business Tax • Real Property Transfer Tax • State HOPTR $1,965,000 $1,700,000 $500,000 $64,000 Licenses and Permits $82,600 Fines, Forfeitures, and Penalties $678,000 Use of Money and Property $995,000 Charges for Services $7,314,572 Other Revenue $387,000 State Subventions $215,000 Interest Income $1,850,000 Total General Fund Revenues $87,327,947 Finance Director Yu -Scott stated that staff is projecting a 4.4% increase in revenues over the current fiscal year. Finance Director Yu -Scott reviewed a bar chart that depicted the upward trend of property tax since 2015. She noted that in the most recent fiscal years beginning in FY 2022-23, property tax growth had started to level out. She stated that the main challenge was the State taking away the vehicle in -lieu fee ("VLF"). She added that VLF will continue to be underfunded. Finance Director Yu -Scott reviewed a bar chart depicting sales tax revenue since FY 2015-16. She noted that impact of inflation on sales tax. Finance Director Yu -Scott reviewed a bar chart depicting transient occupancy tax since FY 2015-16. She noted the drop in TOT due to COVD. She stated that the projected TOT for FY 2024-25 is $22.7 million. Finance Director Yu -Scott reviewed the proposed FY 2024-25 General Fund expenditures: Expenditure Category Amount General Administration $8,736,979 Public Safety • Fire and Disaster Preparedness $15,778,139 • Police and Dispatch $20,973,082 • Parking Enforcement $792,243 Public Works $9,881,445 Community Development $2,846,092 Leisure and Neighborhood Services • Aquatics Center $547,000 • Library $6,772,485 • Parks and Tree Maintenance $9,454,276 • Recreation $5,251,134 Total General Fund Expenditures $81,032,875 Finance Director Yu -Scott stated that the proposed General Fund expenditures for FY 2024-25 result in a 1.8% increase from the FY 2023-24 expenditures. She noted that this is due to the new MOUs with the labor unions, insurance premium, and the vehicle replacement fund. Finance Director Yu -Scott reviewed the projected FY 2024-25 General Fund balance assignments: General Fund (in thousands) FY 2022-23 Actual FY 2023-24 Adopted Budget FY 2023-24 Amended Budget FY 2024-25 Proposed Budget Economic Stability Reserve $18,118 $19,322 $20,074 $20,959 Catastrophic Reserve $2,000 $2,000 $2,000 $2,000 Contingency Reserve $500 $500 $500 $500 Subtotal, Assigned Fund Balance $20,618 $21,822 $22,574 $23,459 Add: Restricted for Pension Trust Fund $17,564 $17,366 $18,432 $18,958 Add: Unassigned Fund Balance $16,811 $2,397 $7,731 $86 Total: Ending Fund Balance (Projected) $54,993 $41,585 $48,737 $42,503 Councilmember Brownrigg discussed the proposed unassigned fund balance of $86,000. He noted that in the adopted budget for FY 2023-24, the City projected $2.4 million in unassigned fund balance, but the amended budget had an increase to $7.7 million in unassigned funds. He asked what accounted for this increase. Finance Director Yu -Scott replied that TOT did better than expected, and the State gave the City $1.5 million for VLF. She added that all of the departments had savings including vacancy savings. Finance Director Yu -Scott reviewed the proposed FY 2024-25 budget summary for the other funds: Other Funds (in thousands) FY 2023-24 Amended Budget FY 2024-25 Proposed Budget Capital Projects $32,959 $35,110 Financing Authority $6,210 $6,239 Water Enterprise $16,961 $17,740 Sewer Enterprise $12,619 $12,939 Parking Enterprise $1,115 $1,254 Solid Waste Enterprise $759 $831 Landfill Closure $432 $347 Building Enterprise $3,985 $4,070 Special Revenue Funds $218 $331 Internal Service Funds $674 ($309) TOTAL $75,932 $78,552 Finance Director Yu -Scott reviewed the breakdown of the proposed FY 2024-25 Citywide budget: • General Fund - $81 million • Capital Improvements - $35.1 million • Utilities (Water and Sewer) - $30.7 million • Other Funds - $12.8 million TOTAL - $159.6 million Finance Director Yu -Scott reviewed the proposed personnel classification position changes: • Community Development — Building Division — add one management analyst position • Parks and Recreation — Parks Division — add one parks maintenance worker position She noted that the Community Development position is funded by the Building Enterprise Fund. Councilmember Stevenson asked how staff determined the TOT projections. Finance Director Yu -Scott replied that she works closely with The San Francisco Peninsula and reviews the monthly numbers. Mayor Colson stated that hopefully Topgolf will help increase TOT. City Manager Goldman stated that the City gets TOT revenues monthly, which enables staff to do pretty precise calculations of the projected growth. Vice Mayor Beach discussed the projected unassigned balance for FY 2024-25. She asked about staff's comfort level with that number being $86,000. Finance Director Yu -Scott replied that a lot of variables affect the unassigned fund balance including the Capital Improvement Program. She noted that staff worked hard to determine which projects are necessary and what could be scaled back or delayed. She discussed the need to review policies such as decreasing funding to the Economic Stability Reserve or Section 115 Trust Fund. 4 City Manager Goldman stated that the expenditure level set by the budget is the maximum that each department can spend. She noted that while departments might spend the maximum in certain categories, they don't spend it in all. Therefore, she explained, there are always savings. Councilmember Brownrigg stated that he is uncomfortable with the projected unassigned fund balance. He noted that unless TOT bounces back, he is concerned that the City might need to re-evaluate how much of the General Fund is put annually into CIP. City Manager Goldman discussed the funding that was necessary over the past few years for tree removals as a result of storms, which helps explain some of the decrease in the unassigned fund balance. Mayor Colson asked if she was correct that the City is putting $500,000 a year in the Section 115 Trust. Finance Director Yu -Scott replied in the affirmative. Mayor Colson stated that the City didn't need to put $500,000 in as the flattening of the rate wouldn't occur until FY 2027-28, and the City currently has $20 million in the Section 115 Trust. She noted that this would give the City a little more wiggle room in the unassigned fund balance. Mayor Colson opened the item up for public comment. No one spoke. Vice Mayor Beach made a motion to adopt Resolution Number 074-2024; seconded by Councilmember Stevenson. The motion passed unanimously by roll call vote, 5-0. Councilmember Brownrigg made a motion to adopt Resolution Number 075-2024; seconded by Councilmember Pappajohn. The motion passed unanimously by roll call vote, 5-0. Mayor Colson congratulated Finance Director Yu -Scott on a very comprehensive and clear staff report regarding the proposed budget and five-year forecast. Finance Director Yu -Scott reviewed the projected General Fund Five -Year Forecast: General Fund (in FY 2023-24 FY 2024-25 FY2025-26 FY 2026-27 FY 2027-28 FY 2028-29 thousands) Amended Proposed Forecast Forecast Forecast Forecast Total Revenues $83,642 $87,328 $91,674 $95,170 $98,825 $102,658 Total Expenditures ($79,582) ($81,033) ($84,573) ($87,774) ($91,000) ($94,531) Revenue Over (Under) Expenditures $4,060 $6,295 $7,101 $7,396 $7,825 $8,127 Transfer to Capital Project Fund ($8,564) ($10,840) ($10,720) ($7,620) ($6,920) ($5,620) Transfer to Debt Service Fund ($3,623) ($3,650) ($3,122) ($3,105) ($3,104) ($3,112) Other Transfers In (Out) $1,871 $1,961 $2,030 $2,100 $2,174 $2,252 Change in Fund Balance before Adjustment ($6,256) ($6,234) ($4,711) ($1,229) (25) $1,647 Adjustment - Transfer to Pension Trust ($868) ($526) ($500) ($500) ($500) ($500) Net Surplus/(Deficit) ($7,124) ($6,760) ($5,211) ($1,729) ($525) $1,147 Finance Director Yu -Scott reviewed the City's past contributions to the Capital Improvement Program along with projected contributions. She noted that the upcoming two fiscal years will see large contributions, and then after that the contributions will decrease. Finance Director Yu -Scott reviewed the General Fund Five -Year Forecast for Fund Balance: Fund Balance (in FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 thousands) Amended Proposed Forecast Forecast Forecast Forecast General Fund Beginning Balance $54,993 $48,737 $42,503 $37,791 $36,563 $36,538 General Fund Ending Balance $48,737 $42,503 $37,791 $36,563 $36,538 $38,185 Assigned Balance: $22,574 $23,459 $24,502 $25,341 $26,218 $27,138 Economic Stability Reserve at 24% of Revenue $20,074 $20,959 $22,002 $22,841 $23,718 $24,638 Catastrophic Reserve ($2.0 million) $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Contingency Reserve ($0.5 million) $500 $500 $500 $500 $500 $500 PARS Restricted Cash $18,432 $18,958 $19,458 $19,958 $20,458 $20,958 Unassigned Fund Balance $7,731 $86 ($6,169) ($8,736) ($10,138) ($9,911) Mayor Colson and Councilmember Brownrigg discussed the City's contribution to the Economic Stability Reserve at 24% of revenue. They noted that during the pandemic, the City did not need to tap into the Reserve and wondered if 24% was the correct number. Councilmember Brownrigg suggested decreasing the percentage allotted to the Economic Stability Reserve to 20% instead of 24%. Vice Mayor Beach suggested re-evaluating the percentages and allotments for the different reserves. Mayor Colson opened the item up for public comment. 2 Joe Baylock discussed the need for increased traffic enforcement through the approval of an additional police officer position. (Comment submitted via publiccomment@burlingame.org). b. CITY COUNCIL REVIEW OF DRAFT FY 2024-25 CAPITAL IMPROVEMENT PROGRAM Senior Civil Engineer Okada began with a summary of the proposed Capital Improvement Program for FY 2024-25: Program Category FY 2024-25 Requests (in thousands) Parks and Recreation Improvements $7,940 Building Facilities Improvements $6,400 Bicycle, Pedestrian, and Traffic Improvements $6,355 Parking Enterprise Fund Projects $400 Street Resurfacing Program $2,650 Water Enterprise Fund Projects $5,000 Sewer System Enterprise Fund Projects $4,865 Storm Drainage System Projects $1,500 Total $35,110 Mr. Okada reviewed the proposed Parks and Recreation Improvements for FY 2024-25: Project Description General Fund Measure I Impact Fees Grants Total Funding Request Town Square Public Plaza $3,700 $1,000 $1,300 $500 $6,500 Citywide Playgrounds — Laguna Park $700 $700 BSD Synthetic Turf Replacement Fund $200 $200 Murray Field Synthetic Turf Replacement Fund $150 $150 Mills Canyon Maintenance $100 $100 Playground Replacement Fund $100 $100 City Parks Fencing $50 $50 Playground Resilient Surfacing $50 $50 Athletic Field Renovations Fund $50 $50 Annual Tree Replacement $40 $40 TOTAL $5,140 $1,000 $1,300 $500 $7,940 Mr. Okada reviewed the proposed Building Facilities Improvements for FY 2024-25: 7 Project Description General Fund Low Interest Impact Fees Total Funding Loans Request PD ADA and Sally Port Improvements $900 $300 $1,200 — Phase 1 Roof Replacement at PW Corp Yard $500 $500 PD Replacement of Emergency Radio $250 $250 Infrastructure Fire station 34 HVAC Improvements — $200 $200 Design Fire Station 34 Miscellaneous $200 $200 Improvements Parks Corporation Yard Renovation — $200 $200 Planning EV Chargers at the PW Corp Yard $175 $175 PD Women's Bathroom/Locker $150 $150 Rooms Renovations — Phase 2 — Design Program Management $150 $150 Citywide Minor Building Facilities $100 $100 Police Replacement of Dispatch $100 $100 Consoles ADA Transition Plan $100 $100 Fire Station 35 Planning — Phase 2 — $75 $75 Design Library Garage, Highland Garage, and $3,000 $3,000 Corp Yard Solar Panel Project TOTAL $2,700 $3,000 $700 $6,400 Councilmember Brownrigg asked about the $3 million low interest loan and whether it is was deducted against the CIP for one year or amortized over time. DPW Murtuza replied that it is a loan that the City will pay off in 30 years with a 1.9% interest rate. Councilmember Brownrigg asked if the $10.8 from the General Fund includes the $3 million loan. DPW Murtuza replied in the negative. Mayor Colson stated that PCE has grants that the City could apply for to subsidize EV charging stations. DPW Murtuza replied in the affirmative. Mr. Okada reviewed the Bicycle, Pedestrian and Traffic Improvements for FY 2024-25: E3 Project Description General Gas Tax Measure Measure Dev/Impact Grants Total Fund A I Fees Funding Request Old Bayshore Highway $650 $3,000 $3,650 Design Sidewalk Program and ADA $100 $1,000 $1,100 Improvements Vision Zero $480 $480 Citywide Pedestrian $250 $250 Improvements (Including RRFBs) Citywide Traffic Calming $225 $225 Improvements Broadway Corridor Traffic $200 $200 Signal Interconnect Study Bay Trail Improvements at $150 $150 Airport and Beach Design Floribunda/Almer/Bellevue $150 $150 Intersection Design Downtown Broadway $150 $150 Intersection Improvements TOTAL $0 $100 $1,125 $1,000 $650 $3,480 $6,355 Mr. Okada stated that for FY 2024-25, staff is proposing to use $400,000 from the City's parking fund to resurface Parking Lot C. Mr. Okada reviewed the proposed Street Resurfacing Projects for FY 2024-25: • Cananea Court — from Cananea Avenue to end • Clovelly Lane —from Westmoor Road to end • Donnelly Avenue — Primrose Road to Lorton Avenue • Gilbreth Road — Cowan Road to Mahler Road • Hamilton Lane — Westmoor Road to end • Humboldt Road — Rollins Road to Peninsula Avenue • Killarney Lane — Westmoor Road to end • Malcolm Road — Old Bayshore Highway to Gilbreth Road • Meadow Lane — Rosedale Avenue to end • Neuchatel Avenue — Oak Grove Avenue to Wilborough Road • Occidental Avenue — Barriolhet Avenue to Pepper Avenue • Ralston Avenue — Occidental Avenue to Pepper Avenue • Rollins Road —Toyon Drive to Oak Grove Avenue (pavement section repairs only) • Victoria Road — Peninsula Avenue to Burlingame Avenue (pavement section repairs only) 9 He noted that the total cost for the FY 2024-25 street resurfacing program is $2,650,000. Mr. Okada reviewed the proposed Water System Capital Improvement Program for FY 2024-25: Project Description Total Funding Request Burlingame Terrace — Easton Addition and Burlingame Terrace Phase 1 $3,125 Roof Replacement at Corp Yard (Water Enterprise Share) $500 West Burlingame Terrace — South ECR WMR Phase 4 $450 Advanced Metering Infrastructure (AMI) $300 EV Chargers at Corp Yard (Water Enterprise Share) $175 Highline Project $100 Sisters of Mercy Pump Station $100 Water Meter Replacement Program $100 Water System Valve Replacements $100 Regional Water Supply Studies/Modeling $50 TOTAL $5,000 Councilmember Brownrigg asked if the Advanced Metering Infrastructure ("AMI") were wireless meters. Mr. Okada replied that the water meters will collect the data in real time. He added that not all homes will have these wireless meters; it will need to be done in a phased approach. Councilmember Brownrigg stated that this will assist with individuals that are a way for a few months when their toilet is running in order to alert an individual right away. Mr. Okada reviewed the proposed Sewer System Capital Improvement Program for FY 2024-25: Project Description Total Funding Request WWTP Headworks Channel Repair $3,100 Citywide Repairs Identified by Smoke Testing of Sewer Mains $500 Corp Yard Roof Replacement (Sewer Enterprise Share) $500 WWTP Digester Equipment Building, Digester No. 2, and Sludge Storage Tank Building Design $250 Corp Yard EV Chargers (Sewer Enterprise Share) $175 1000 Rollins Road Lift Station Pumps Upgrade (#1, #2, #5, #6) $105 WWTP Biosolids Trailer Yard Jockey $100 1000 Rollins Road Lift Station Manual Bar Screen Jet Wash System Upgrade $70 WWTP Final Effluent Pumps Upgrade $65 TOTAL $4,865 Mr. Okada reviewed the proposed Storm Drainage System Capital Improvement Program for FY 2024-25: 10 Project Description Total Funding Request Neighborhood Storm Drain Project #16 $1,150 Neighborhood Storm Drain Project $15 $350 TOTAL $1,500 Mr. Okada reviewed the proposed funding sources for the FY 2024-25 Capital Improvement Program: Funding Source FY 2024-25 Requests (in thousands) General Fund $7,840 Measure I ($1M sidewalks, $1M streets, and $1M town square) $3,000 Gas Tax, Measure A, and SB 1 $2,875 Parking Enterprise Fund $400 Development/Impact Fees $2,650 Grants/Loans $6,980 Water System Enterprise Fund $5,000 Sewer System Enterprise Fund $4,865 Storm Drain Fees $1,500 TOTAL $35,110 Vice Mayor Beach stated that so much of the proposed FY 2024-25 Capital Improvement Program is good commonsense infrastructure. She noted that the biggest line item in the program is the Town Square with $3.7 million from the General Fund. She asked if there was any part of the project that could be phased or delayed. Parks and Recreation Director Glomstad stated that the fountain and bathroom are the largest costs associated with the project. Mayor Colson stated that with the assistance of the Parks and Recreation Foundation, funds could be raised by asking individuals to donate in exchange for their names engraved on large pavers. Councilmember Brownrigg stated that the project hasn't been put out to bid yet and thought an architect might be able to value engineer this project down. He noted that he thought this conversation would be better served after getting an understanding of the actual cost. Parks and Recreation Director Glomstad stated that the project could be deferred. She also discussed putting the bathroom infrastructure in place without the bathroom and phasing that in later. She added that it would be helpful if the Council gave staff a target number to decrease the project by. Mayor Colson stated that she concurred with Councilmember Brownrigg that the project should first go out to bid to understand the true cost. Vice Mayor Beach asked about the developer's contribution of $2 million. City Manager Goldman replied that the project changed since the developer's original offer. She noted that the Town Square became a lot 11 bigger, which has increased the cost to approximately $10 million. She added that the City has received $1 million from the State, $750,000 in federal grants, and $500,000 from the County. Mayor Colson discussed restaurants moving into the new 220 Park building and trying to time the construction of the Town Square. Mayor Colson stated her recommendation for the proposed FY 2024-25 budget was to postpone the contribution to the Section 115 Fund. The Council concurred. Councilmember Brownrigg stated that he would like to examine taking funds out of the Economic Stability Reserve as he wasn't comfortable with the minimal amount of unassigned General Fund balance. City Manager Goldman replied that it is always available. She added that staff would come to Council if it was necessary to utilize funds from the Economic Stability Reserve. Mayor Colson discussed funds that will be needed in the future for sea level rise. The Council thanked staff for their presentations and hard work. 7. ADJOURNMENT Mayor Colson adjourned the meeting at 8:50 p.m. Respectfully submitted, /s/ Meaghan Hassel -Shearer City Clerk 12