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HomeMy WebLinkAbout01-23-2015 City Council Retreat Agenda Packet Table of Contents Agenda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Mid-Year Budget Status and Five Year Forecast Mid Year Staff Report. . . . . . . . . . . . . . . . . . . . . 4 Budget & Finance Policies. . . . . . . . . . . . . . . . . . . 5 Roadway Conditions & Pavement Management Program Staff Report . . . . . . . . . . . . . . . . . . . . . . . . . 35 Fiscsl Year 2015/16 Capital Budget CIP Staff Report . . . . . . . . . . . . . . . . . . . . . . . 38 Community Engagement Staff Report . . . . . . . . . . . . . . . . . . . . . . . . . 39 Commission Roles & Work Plans Staff Report . . . . . . . . . . . . . . . . . . . . . . . . . 41 Attachment A - Heritage Preservation Commission Work Plan, Membership, and Duties . . . . . . . . . . . . . . 42 Attachment B - Library Commission Work Plan, Membership, and Duties. . . . . . . . . . . . . . . . . . . . 44 Attachment C - Parks and Recreation Commission Work Plan, Membership, and Duties . . . . . . . . . . . . . . 46 Attachment D - Planning Commission Work Plan, Membership, and Duties. . . . . . . . . . . . . . . . . . . . 47 Attachment E - Traffic Safety Commission Work Plan, Membership, and Duties. . . . . . . . . . . . . . . . . . . . 49 Attachment F - Youth Commission Work Plan, Membership, and Duties. . . . . . . . . . . . . . . . . . . . 50 Attachment G - Tentative 2015 Commission Recruitment Schedule. . . . . . . . . . . . . . . . . . . . . 51 Department Work Plans Staff Report . . . . . . . . . . . . . . . . . . . . . . . . . 53 1 4-Ar CITY COUNCIL RETREAT AGENDA 4• 'j t` JANUARY 23, 201519:00 A.M. SARATOGA FOOTHILL CLUB 20399 PARK PLACE, SARATOGA CALL MEETING TO ORDER—9:00 A.M. Light breakfast& coffee will available at 8:30 a.m.prior to the start of the meeting. ROLL CALL REPORT OF CITY CLERK ON POSTING OF THE AGENDA The agenda for this meeting was property posted on January 15, 2015. ORAL COMMUNICATIONS ON NON-AGENDIZED ITEMS Any member of the public will be allowed to address the City Council for up to three (3) minutes on matters not on this agenda. The law generally prohibits the Council from discussing or taking action on such items. However, the Council may instruct staff accordingly regarding Oral Communications under Council Direction to Staff. AGENDA TOPICS 1. 9:00 a.m. Mid-Year Budget Review & Five Year Forecast 2. 10:00 a.m. Roadway Conditions & Pavement Mana eg ment 3. 10:30 a.m. Fiscal Year 2015/16 Capital Budget 11:30 a.m. BREAK 4. 11:35 a.m. Budget Wrap Up 12:00 p.m. LUNCH BREAK & COUNCIL EXERCISE 5. 1:00 p.m. Community Engagement 6. 2:00 p.m. Commission Roles &Work Plans 3:30 p.m. BREAK 7. 3:45 p.m. Department Work Plans 8. 4:15 p.m. Retreat Wrap Up ADJOURNMENT 2 In accordance with the Ralph M. Brown Act, copies of the staff reports and other materials provided to the City Council by City staff in connection with this agenda are available at the office of the City Clerk at 13777 Fruitvale Avenue, Saratoga, CA 95070. Note that copies of materials distributed to the City Council concurrently with the posting of the agenda are also available on the City Website at www.saratoga.ca.us. Any materials distributed by staff after the posting of the agenda are made available for public review at the office of the City Clerk at the time they are distributed to the City Council. In Compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting,please contact the City Clerk at(408) 868-1269. Notification 24 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. [28 CFR 35.102-35.104 ADA title II] Certificate of Posting of Agenda: I, Crystal Bothelio, City Clerk for the City of Saratoga, declare that the foregoing agenda for the meeting of the City Council was posted and available for public review on January 15, 2015, at the City of Saratoga, 13777 Fruitvale Ave., Saratoga, CA 95070 and on the City's website at www.saratoga.ca.us Signed this 15th day of January 2015 at Saratoga, California. Crystal Bothelio, City Clerk 3 I SARATOGA CITY COUNCIL MEETING DATE: January 23, 2015 DEPARTMENT: Finance &Administrative Services PREPARED BY: Mary Furey SUBJECTS: Mid-Year Budget Status and Five Year Forecast RECOMMENDED ACTION: Review and consider the FY 2014/15 Mid-Year Budget Status and Five Year Forecast presentations and schedules, and provide direction on the proposed mid-year budget adjustments and FY 2015/16 budget policy and development. REPORT SUMMARY: 1. The Mid-Year Budget Status Review report will be presented to Council at the retreat through a PowerPoint presentation with additional documentation to provide explanatory narratives and visuals for the discussion on current fiscal year revenue and expenditure projections. An attachment for proposed budget adjustments will be provided to Council on January 21St 2. Following this, the Five-Year Forecast presentation will present historical financial activity, current year activity and estimated outcomes, and forecast projections for the next five years. Specific budget impacts will be discussed in more detail. Revenue and expenditure projection assumptions will be provided and discussed, along with fund balance impacts. Handouts will be provided to Council on January 21 St 3. Council's decisions are guided by established Budget and Financial Policies. A copy of the most recent version of the policies is attached for Council's review prior to the meeting. This current version includes minor edits as recommended by the Finance Committee. Additional edits resulting from Council's review during the retreat will be incorporated into the revised FY 2015/16 fiscal policies. ATTACHMENTS PROVIDED: A. Budget and Financial Policies ATTACHMENTS TO BE PROVIDED ON JANUARY 21,2015 A. Proposed budget adjustments B. Forecast schedule C. Forecast projection assumptions D. UAL Options 4 CITY OF SARATOGA INTRODUCTION SECTION BUDGET & FINANCIAL POLICY INFORMATION CITY OF SARATOGA INTRODUCTION SECTION BUDGET PROCESS OVERVIEW he City of Saratoga adopts an annual The City's Governmental Funds consist of the Operating and Capital Budget. The Capital General Fund, Special Revenue Funds, Debt Budget is in effect an annual update to the Service Funds, and Capital Project Funds. five-year Capital Improvement Plan. The Governmental Fund budgets are developed using budgets contain summary level information for the modified accrual basis of accounting. Under revenue and expenditure appropriations for the this basis, revenues are accounted for in the period fiscal year beginning July I st and ending June 30th. collected, or accrued if revenue amounts can be The budget documents are prepared on the same determined and collected within sufficient time for basis as the City's financial statements, and in use in paying current period expenditures. Under accordance with generally accepted accounting governmental accounting, principal and interest on principles(GAAP). general long-term debt are budgeted as expenditures when due — the liability for long term debt is not BUDGET PURPOSE included. The Operating and Capital Summary Budget serves Proprietary fund budgets are adopted using the full as the City's financial plan, as well as a policy accrual basis of accounting whereby revenue budget document, a communications tool, and an operations guide. Developed with an emphasis on projections are developed recognizing revenues long range planning, service delivery, and program expected to be earned during the period, and management, a fundamental purpose of these expenditures budgeted for expenses anticipated to documents is to provide a linkage between the be incurred in the fiscal year. The City maintains services and projects the City intends to accomplish, one type of proprietary fund: Internal Service and the resources committed to get the work done. Funds. The format of the budget facilitates this linkage by Fiduciary funds are also budgeted under the clearlyidentifying program purpose, keyprojects, modified accrual basis. Trust funds are subject to Yi g l g p o p trust agreement guidelines, and Agency Funds are and workplan goals, in relation to revenue and expenditures appropriations. held in a custodial capacity involving only the receipt, temporary investment, and remittance of BASIS OF BUDGETING AND ACCOUNTING resources. Saratoga administers two agency funds. Developed on a program basis with fund level SUMMARY OF BUDGET DEVELOPMENT authority, the operating and capital budgets represent services and functions provided by the The City develops it budgets with a team-based City in alignment with the resources allocated budgeting approach. City Management guides the during the fiscal year. process through budget development; however program budgets and workplans are developed with Basis of Budgeting and Accounting refers to the each department program manager's oversight and timing factor concept in recognizing transactions. expertise. This approach allows for hands-on This basis is a key component of the overall planning,and creates a clear understanding for both financial system because the budget determines the management and staff of a program's goals and accounting system. For example, if the budget functions to be accomplished in the next budget anticipates revenues on a cash basis,the accounting year. system must record only cash revenues as receipts. If the budget uses an accrual basis,accounting must THE DEVELOPMENT PROCESS do likewise. The City's budgeting and accounting Typically both the Operating and Capital Budget systems both use a hybrid of modified accrual and processes begin in January with the City Council full accrual basis in the accounting and budget and City Manager's development and refinement of systems. initiatives and directives for the upcoming budget year. Initiatives and directives are developed in 2 CITY OF SARATOGA INTRODUCTION SECTION conjunction with a review of the current year's Council as to the conformity of the plan with the budget status and the Five-Year Financial Forecast City's Adopted General Plan. at the annual Council Retreat. The forecast Final council-directed revisions to the proposed provides an overview of service level operations as budget are made and the budget documents are it assesses funding sources and uses,and guides the resubmitted to the Council for adoption, again in a discussion for the upcoming budget direction. publicized public hearing prior to the beginning of the fiscal year. The CIP is also reviewed during this time to determine funding capabilities, project priorities, Section 2-20.050(i) of Saratoga's City Code and to refine project workplans. Although the CIP requires the City Manager to prepare and submit an Budget and five year work plan is a stand-alone annual budget to the City Council. This is body of work, CIP projects may impact the City's accomplished in June, when the final proposed ongoing operations and therefore must be budget is formally submitted to the Council in the incorporated into the Operating Budget's service subsequent public hearing. level requirements. The approved resolutions to adopt the CIP and In February, the budget preparation process begins operating budgets and the appropriation limitation officially for staff. Budget assumptions, directives (Gann Limit)follow later in this section. and initiatives are provided to set the City's overall objectives and goals. Over several months, staff BUDGET AMENDMENTS identifies and analyzes program revenue and During the course of the fiscal year, economic and expenditure projections in coordination with workplan changes or unanticipated needs may Finance/Budget staff and City management. necessitate adjustments to the adopted budgets. The Capital improvement projects are assessed and City Manager is authorized to transfer refined, and CIP funding and appropriation appropriations between categories, departments, requirements are finalized. projects,and programs within a fund in the adopted budget, whereas the City Council holds the Through rounds of budget briefings and revisions, authority for budget increases and decreases and staff's final program budget and workplans are transfers between funds. developed by the end of April; operational and capital workplans are finalized, and the Finance/Budget staff prepares financial summary information for City Council review in addition to departmental budgets and workplans. BUDGET ADOPTION During the month of May,the City Council reviews the proposed Operating and Capital Summary Budget, and the Capital Improvement Plan for the five year period in a public hearing. Notice of the hearing is published in a local newspaper at least ten days prior to the Council's public hearing date. The public is invited to participate and copies of the proposed budgets are available for review on the City's website, in the City Manager's office and at the budget hearing. Under requirements established in Section 65401 of the State Government Code, the City's Planning Commission also reviews the proposed Capital Improvement Plan and reports back to the City 3 CITY OF SARATOGA INTRODUCTION SECTION BUDGET CALENDAR December Budget Office to begin development of financial forecast and budgets for following fiscal year, including: Draft operating budget revenue and expenditure projections Prior fiscal year-end fund balance available for CIP January Budget Office to prepare Mid-Year Budget Report and Five-Year Financial Forecast for Council review at annual retreat For Operating Budget: Budget Office to provide budget information to staff on budget assumptions,directives,initiatives,and goals Budget Office and Program Managers to prepare Internal Service and Equipment Replacement Fund analyses and schedules,finalize internal service rates Budget Office to prepare operating budget worksheets for updates, including departmental/program narratives, staffing and financial worksheets,asset and staffing requests. For Capital Budget: Budget Office to prepare updated five-year CIP project worksheets February Budget Office and departments to review current User Fee Schedule for appropriate changes in preparation of annual updates process For Operating Budget: Budget Office to finalize Internal Service Fund program workplans Budget Office to prepare budget worksheets for departments,including staffing and internal service program costs Departments to prepare draft revenue expenditure workplans For Capital Budget: Project Managers to finalize funding estimates, scope of work,and cost estimates for new proposed projects March For Operating Budget: Departments to finalize budget work plans Review proposed budgets with City Manager Departments and Budget Office to finalize budget changes For Capital Budget: Project Managers to determine year end CIP project estimates City Manager to approve recommended proposed CIP projects 4 CITY OF SARATOGA INTRODUCTION SECTION April For Operating Budget: Departments to finalize program narratives and Performance Measures Budget Office to compile final program narratives, financial and supplemental schedules, and financial budget summaries and charts for City Council Budget Study Session For Capital Budget: Project Managers to finalize new project information for CIP submittal Public Works Manager to bring new projects to Planning Commission meeting for General Plan conformance review City Council to hold Public Hearing for Annual User Fee Update City Council to hold Budget Study Session May For Operating&Capital Budgets: Final budget briefing with City Manager Budget Office to incorporate Council directed changes into proposed budgets and prepare final documents for Public Hearing presentation City Council to hold Proposed Budget Hearing June For Operating&Capital Budgets: City Council revisions incorporated into budget documents City Council adoption of Operating and Capital Budget City Council adoption of Gann Appropriation Limit July/ Final document preparation of financial and supplemental schedules,charts, August/ reference materials, etc. September Adopted Operating and CIP Budget documents finalized,posted on website, and distributed 5 CITY OF SARATOGA INTRODUCTION SECTION o 6 CITY OF SARATOGA INTRODUCTION SECTION FISCAL MANAGEMENT POLICY STATEMENTS As a general philosophy to practice fiscal responsibility, the City of Saratoga's conservative and cautious financial management is achieved through responsible, sustainable, and enforceable fiscal policies and internal controls to ensure prudent and efficient use of resources. These policies and controls represent long-standing accounting, budgeting, debt, investment, and reserve principles and practices, and are the foundation which guides the City in maintaining its financial stability. The following general fiscal management policy statements provide an overview of financial, operational, and budgetary management and provide a guideline for fiscal operations. As many fiscal policies are administrative in nature, detail level policy direction are not included in the budget document. However, fiscal policies that rise to Council review and approval standards are incorporated into the budget document for annual adoption by Council. Council approved detail fiscal policies include the Fund Balance Reserve Policy and the Capital Project Process Policy. Others will be added as approved. The Council approved detail fiscal policies follow the Fiscal Management Statements within this policy section. General Financial Principles The City's fiscal policies are structured to ensure fiscal responsibility, accountability, transparency, and efficient use of resources. Fiscal policies are to be reviewed,updated,and refined as necessary,with general policy level decisions brought to City Council for review and approval, and operation level functions approved by the City Manager. The City Council's financial based goals, objectives, and policies, are incorporated into and implemented with the development of the City's Operating and Capital Budgets. Efforts will be coordinated with other governmental agencies and joint power associations to achieve common policy objectives, share the cost of providing governmental services, and support legislation favorable to cities at the state and federal level. The City will seek out, apply for, and effectively administer federal, state, local, and foundation grants which address the City's current priorities and policy objectives. Appropriations and Budgetary Control The City Council adopts an annual balanced operating budget and the first year of an integrated five-year capital improvement plan budget on an annual basis, to be effective for the fiscal year running from July 1St through June 301. Balanced budgets present budgeted sources in excess of budgeted uses. Budgeted "Sources" include Revenues, Transfers In, and Appropriated Uses of Fund Balance. Budgeted "Uses" include Expenditures and Transfers Out. Operating and capital budgets are to align with the City's long- term financial goals. The City's budget practices utilize long-range planning as a decision making tool, and annually adopts a structurally balanced fiscal plan that retains the City's fiscal health, preserves essential services, and supports short and long-term goals in a financially judicious manner. Each year the Finance & Administrative Services Department provides an updated five year financial forecast to the City Council at the Annual Council Retreat(scheduled in late January or early February) 7 CITY OF SARATOGA INTRODUCTION SECTION to assist Council with formulating direction for long-range planning, operating budget development, and capital funding appropriations. Budgets are prepared on the same basis of accounting used for financial reporting: governmental fund types (General, Special Revenue, and Debt Service) are budgeted according to the modified accrual basis of accounting; proprietary funds (Internal Service Funds) and fiduciary funds are budgeted under the accrual basis of accounting. The Operating Budget is generally funded with current year revenues. Dedicated fund balance reserves, such as the Carryforward Reserve, the Environmental Reserve, or the Fiscal Stabilization reserve may be used with Council approval to fund current operational expenses that extend beyond the annual fiscal year, or were funds collected and dedicated for longer term use. Council may also approve the use of long-term debt for operational liabilities if fiscally prudent. City policy is to fund the Capital Budget with surplus and dedicated capital funding resources. The City does not incur long-term debt for capital improvements except under extraordinary circumstances,and with citizen support. Under these circumstances the City will seek voter approval for General Obligation(GO) Bond Debt for major infrastructure rehabilitation. In practice, budgeted revenues are conservatively stated and budgeted expenditures are comprehensive, allowing for the annual operational and capital improvement goals to be completed. With effectively managed revenue streams and efficient use of resources, fiscal year-end operational budget surpluses are available to fund future capital improvement projects and contribute to the City's fiscally responsible reserve accounts. The City Council maintains budgetary control at the fund level; any changes in total fund appropriations during the fiscal year must be submitted to the City Council for review and Council majority approval. Operating Budget appropriations lapse at the end of each fiscal year unless specifically re-appropriated by the City Council in the following fiscal year. Capital Budget appropriations are structured as a multi-year workplan;therefore project expenditure balances are carried forward to the following fiscal year as part of the annual budget adoption until funding is exhausted or the project is completed. The City Manager is authorized to implement the City's workplan as approved in the adopted budget. Within a specific fund, the City Manager may transfer appropriations between categories, departments, programs,and projects as needed to implement the adopted budget,provided the total appropriation amount provided for any one fund does not change. Recurring expenditures are to be funded with recurring revenues, or revenues specifically designated for operational use. One time expenditures may be funded with one-time revenues or fund balances. Fund balance reserves are to be used for non-recurring one-time and capital projects. The City Council has established a $50,000 annual `Council Contingency' appropriation for Council approved unplanned expenditures. Unexpended appropriations are carried forward into the following fiscal year. The Recreation Department cost recovery rate goal is to exceed the California Parks&Recreation Society's (CPRS) average cost recovery rate for all California recreation departments as established in the current CPRS benchmarking report(approximately 65%). The Community Development Department cost recovery rate strives to attain close to full cost recovery as development and building services are primarily for individual enrichment rather than as a community enrichment function. As some aspects of the department's function provides community benefit, the general fund offsets the shortfall between revenues and expenditures. The CIP Street Resurfacing/Pavement Management program has an established minimum annual funding goal of$1,000,000,with Gas Tax Revenues and Road Impact Fees as designated funding sources. 8 CITY OF SARATOGA INTRODUCTION SECTION Council has designated the following capital projects as fundamental to maintaining City infrastructure on an ongoing basis, and are therefore directed to have priority for available Capital Project funding in the amount of$50,000 each year: 1. Annual Sidewalk Repairs 2. Annual Storm Drain Repairs 3. Roadway Safety and Traffic Calming 4. Risk Management Projects Auditing and Financial Reporting California State statutes require an annual financial audit of the City's financial records and transactions by independent Certified Public Accountants. The City shall comply with Generally Accepted Accounting Principles(GAAP)and produce annual financial reports pursuant to Governmental Accounting,Auditing, and Financial Reporting(GAAFR)guidelines. The Finance Division shall prepare required annual financial reports on a timely basis. The Comprehensive Annual Financial Report(CAFR) shall be prepared upon completion of the fiscal year close for review by the City's auditors. Following the Auditor's issuance of an opinion letter,the CAFR shall be presented to Council. Additional financial reports issued by the Auditor's may include: Singe Audit Report (annual report of federal grant expenditures if in excess of$600,000 is expended in a year), a Transportation Development Act (TDA) report (annual report of TDA fund expenditures), an Appropriations Limit review report (to establish tax revenue appropriation limit), and a Management report on the City's Internal Controls. A State required Annual Cities Report, and Annual Streets Report are also completed in conjunction with the year-end close. Weekly check registers and monthly Cash and Investment Reports will be submitted for review and approval at City Council meetings. Quarterly financial reports will provide a status update on General Fund revenues and expenditures for the first,second,and third quarters. A year-end recap is to be provided after the City's annual financial audit is completed. At mid-year, a budget status report is presented at the City Council retreat which includes a more comprehensive review and includes proposed budget adjustments as appropriate. Development Related Financial Policies The Development Reserve was established to provide stability for multi-year project services. The reserve is funded by development revenues in excess of development expenses at fiscal year-end. The reserve is available for use in those years where a shortfall occurs; when development revenues fall below development expenses. Use of the reserve is limited to a maximum of 1/3 of the reserve balance in any given fiscal year;with planned use of the reserve rescinded up to the amount development revenues are sufficient to cover General Fund net operations. Additional information on this Development Reserve is located in the Fund Balance Reserve Policies section. The Williamson Act, also known as the California Land Conservation Act,was passed by the California Legislature in 1965 to encourage rural&agricultural land owners to keep their land undeveloped. When land owners enter into a contract under the act, they benefit from lower property taxes,which are based on the property's current use,rather than paying market value based tax rates. In exchange,the property is to remain undeveloped and continue to function in the same manner for the duration of the 9 CITY OF SARATOGA INTRODUCTION SECTION contract. Contracts run for 10 years and are automatically renewed unless the farmer or rancher cancels it. The City does not limit the number of Williamson Act contracts entered into each year. The Mills Act is State-sponsored legislation granting local governments the authority to enter into an agreement with property owners to allow reduced property tax payments in return for the restoration and continued maintenance of their historic property. Since the agreement reduces property tax assessment, the City receives a smaller share of property tax revenue in comparison to a property that is assessed at market value. The City will allow approval of up to three Mills Act Contracts per year. Expenditures and Purchasing All expenditures shall be in accordance with the City's purchasing policy,travel policy,credit card policy, or any other applicable guidelines. Expenditures are managed at the program level. Program managers are to ensure expenditures do not exceed the budgeted workplan and must take immediate action if at any time during the fiscal year an operating deficit is projected at year-end. Corrective actions may include expenditure reductions, or with Council approval,budget adjustments, service reductions, or service fee increases. The City's current purchasing policy, (effective date of 4/23/2007)establishes purchasing authority levels, purchasing procedures, and procedural requirements, for the procurement of supplies, equipment, and services, in conformance with Federal and State codes and regulations,and City Ordinance No. 2-45. Public Work projects governed by the State's Public Contract Code are excluded from provisions of the City's purchasing policy. The contract authority limit is established at the State level, and adjusts per State code. Guidelines established by the City's Purchasing Policy directs the City's departments to purchase the best value obtainable, securing the maximum benefit for funds expended,while providing all qualified vendors an equal opportunity to do business with the City. Services and supplies purchases which exceed$5,000 require written quotes,and must be approved by the Purchasing Officer or designee, typically through the Purchase Order process. Documentation is to be retained by the department in accordance with the records retention policy and schedule. Services and supplies purchases exceeding$25,000 must be authorized by the City Council,unless purchase type is excluded under the Purchasing Policy. Fixed Assets and Infrastructure Tangible assets with a cost equal to or greater than $10,000 and a useful life of more than one year are considered fixed assets and added to the capitalization schedules. Repairs and maintenance of infrastructure assets will generally not be subject to capitalization unless the repair extends the useful life of the asset. The City will sustain a long-range fiscal perspective through the use of a five-year Capital Improvement Plan designed to maintain the quality of City infrastructure, including streets, sidewalks, curbs and storm drains, lighting, building, parks, and trees, and through Internal Service Fund programs to both maintain and replace City buildings,vehicles,and equipment on an ongoing basis Asset information is retained to provide information for preparation of financial statements in accordance with GAAP,with emphasis placed on completion of GASB 34 requirements. 10 CITY OF SARATOGA INTRODUCTION SECTION Internal Service Funds Internal Services Funds are established to both allocate operating costs to departments for support and maintenance services,and to spread the City's replacement and operational costs equitably over fiscal years for the purpose of providing an accurate and balanced long-range fiscal perspective of the use of services and assets. Asset replacement and maintenance types of Internal Service Funds are structured to provide a consistent level of funding for asset replacement and building maintenance projects, and ensure sufficient funding is available for the regular maintenance and repair of the City's vehicles, equipment, and buildings in an ongoing manner. Technology and Office Equipment replacement and maintenance Internal Service Funds are structured to provide a consistent level of funding for the replacement of technology assets and projects, and to appropriately distribute support and maintenance costs to departments. The Liability and Workers Compensation Insurance Internal Service Funds are to maintain adequate reserves to pay all valid self-insured claims and insurance deductibles, including those incurred but not reported,in order to keep the insurance funds actuarially sound. Each Internal Service Fund will set recovery charges at rates sufficient to meet all operating expenses, depreciation, and fund balance reserve policy objectives. Long-Term Debt Long-term Financing Debt is typically incurred for capital improvements that cannot be financed from current revenues. On occasion,long-term financing debt is used for large liabilities or unplanned financial impacts. In principal, long-term debt is to be used only if the debt service requirements do not negatively impact the City's ability to meet future operating, capital,and cash reserve policy requirements. The term for repayment of long-term financing shall not exceed the expected useful life of the project, or extend beyond functionally appropriate payment terms. Revenues The City will encourage a stable revenue system to mitigate the impacts of short-run fluctuations in any one revenue source. Designated and legally restricted tax and revenue funding sources will be accounted for in the appropriate funds. General taxes and revenues not allocated by law or some other contractual agreement to other funds are accounted for in the General Fund. Capital revenues are to be directly accounted for in the appropriate capital project fund,within a designated project. The City typically establishes user charges and fees at levels that recover direct and indirect activity cost of providing a service or product. The City also considers market rates and charges levied by other municipalities of similar size for like services in establishing rates, fees, and charges. As some services have partial cost recovery objectives, cost recovery ratios will vary in accordance with policy objectives. A master schedule of User Fees is reviewed and updated each year to adjust fees to the established level. The City will follow an aggressive policy of collecting local taxes and revenues due to the City through persistent follow-up procedures, and external resources as necessary. Unrestricted donations,gifts,and bequests to the City in excess of$5,000 must be brought to Council for approval and acceptance. All restricted donations, grants, gifts and bequests must be submitted to the Council for approval prior to acceptance. 11 CITY OF SARATOGA INTRODUCTION SECTION Risk Management Policy The City is insured for up to$25 million of general liability,auto,and property damage claims through the Association of Bay Area Government's (ABAG) Pooled Liability Assurance Network (PLAN) Corporation. The City is self-insured for the first $25,000 for general liability and auto claims; property damage after$5,000 and third party auto claims after$10,000. Workers Compensation claims are insured for the first $250,000 of coverage through the City's participation in a Workers Compensation risk pool,known as SHARP (Shared Agency Risk Pool). After the $250,000 limit is met, an excess coverage policy is activated. The excess coverage provides an employer liability limit of $5,000,000 per occurrence, and workers' comp per occurrence limit of $100,000,000. Workers'Compensation claims are managed by a third party administrator. The City's role in managing both its risk management and workers comp programs is to be preventative in nature which is accomplished through careful monitoring of losses, working closely with the third party administrator,and designing and implementing programs to minimize risk and reduce losses. Treasury Management California Government Code Section 53600; City of Saratoga Municipal Code Section 2-20.035; and Section 16.0 of the City of Saratoga Investment Policy require the City Council to annually review and approve the City's Investment Policy. It is the policy of the City of Saratoga to invest public funds in a manner which will provide the maximum security with the highest investment return, while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of funds. The City practices conservative and cautious investment practices through limiting its investments to the State's Local Agency Investment Fund (LAIF). LAIF's extensive professional investment staff and conservative investment practices ensure prudent financial management of the City's fiscal reserves. The Finance Division shall prepare a monthly report to the City Council that has sufficient detail to present the financial condition of the City at month end, the cash and investments balance by fund, and fund balances by fund type. 12 CITY OF SARATOGA INTRODUCTION SECTION FUND BALANCE RESERVE POLICY Prudent financial management dictates that the City reserve a portion of its funds for future use to: maintain fiscal stability; ensure the continued orderly operation of government and provision of services to residents; and to mitigate current and future risks. As a general budget precept,the City Council decides when and whether to appropriate available funds to and from a reserve account. Use of reserve funds must be authorized by either specific direction in the annual budget, or by a separate City Council action unless specifically noted in policy. Responsible fiscal stewardship also requires adequate reserve be maintained for all known liabilities and established City Council and community directed initiatives. In the following Fund Balance/Reserve Policy overviews,the descriptions include identification of the fund type and classification, the purpose of the reserve, minimum and maximum funding goals if appropriate, guidelines on utilization of the reserve and by what authority, and the procedure for funding the reserve initially,on an ongoing basis, or after utilization. Fund Balance and Net Position In 2009, Governmental Accounting Standards Board ("GASB") Statement No. 54 revised fund balance classifications for"Governmental Funds"into five specific classifications of fund balance with the intent to identify the extent to which a specific fund balance reserve is available for appropriation and therefore spendable,or whether the fund balance reserve is constrained by special restrictions. Government Funds for which these new rules apply include: the General Fund, Special Revenue Funds, Capital Project Funds, and Debt Service Funds. For "Non-Governmental Funds", equity classifications are classified as "Net Position" with sub- classifications of Restricted or Unrestricted Net Position. A third component of a Non-Governmental Fund's equity is"Net Investment in Capital Assets,"which for the City refers to the non-monetary portion of equity such as vehicles and equipment, net of depreciation. Non-Governmental Fund types include Proprietary Funds(Enterprise and Internal Service Funds)and Fiduciary Funds(Trust Funds). Currently,the City's non- governmental fund types are limited to Internal Service Funds. Governmental Fund Type Reserve Classifications The Governmental Reserve classifications are defined as follows, including the applicable reserves that fall into the classification: Non-Spendable Fund Balance Represents resources that are inherently non-spendable from the vantage point of the current period. The City does not presently hold Non-Spendable Reserve funds Restricted Fund Balance Represents fund balance that is subject to external enforceable legal restrictions. The City maintains the following restricted fund balances under this designation: General Fund: Environmental Services Fund Balance Reserve Special Revenue Funds: Landscape&Lighting Assessment Districts Fund Balance Debt Service Fund: Library General Obligation Bond Debt Service Fund 13 CITY OF SARATOGA INTRODUCTION SECTION Committed Fund Balance Represents fund balance constrained by limitations the government imposes upon itself at its highest level of decision making and remains binding unless removed in the same manner. The City maintains the following fund balances under this designation: General Fund: Hillside Stability Reserve General Fund: Facility Reserve Capital Improvement Plan Funds: Capital Project Reserves Assigned Fund Balance Represents fund balance identified by Council for an intended use;however as no legal obligations exist, the funds may be re-designated and utilized for another purpose if Council chooses. The City maintains the following General Fund reserves under this designation: General Fund: Future Capital Improvement&Efficiency Project Reserve General Fund: Carryforward Reserve Unassigned Fund Balance Represents funding which may be held for specific types of uses or operational funding/stabilization purposes, but is not yet directed to a specific purpose. Only General Fund reserves can be designated under the"Unassigned"fund balance classification. Other fund types are by nature structured for specific purposes,hence the fund balances are therefore considered"assigned"for that purpose. General Fund: Working Capital Reserve General Fund: Fiscal Stabilization Reserve General Fund: Development Services Reserve General Fund: Other Unassigned Fund Balance Reserve Fund Balance Ratios To ensure the City maintains available working cash flow at all times,the collective total of the General Fund's Unassigned Reserves is to be sustained at a minimum of 20%of General Fund appropriations. General Fund Year-End Allocations After the City's financial records are finalized and audited,with legal obligations and liability reserves funded, revenues in excess of expenditures are closed out to the Other Unassigned Fund Balance Reserve. Funding in excess of the$500,000 that is to remain in the Other Unassigned Fund Balance Reserve will be distributed in the following order: 1. Working Capital Reserve interest allocation. 2. Repayment of Fund Balance Reserve loans-back to established levels (e.g. borrowing from the Fiscal Stabilization or Hillside Stability Reserves). 3. Annual contribution of$100,000 to the Hillside Stability Reserve,until reserve balance reaches $1,000,000. 4. Annual contribution of$300,000 to Facilities Replacement Reserve. 5. Remaining funds are allocated to the Future Capital Improvement and Cost Efficiency Fund Balance Reserve. 14 CITY OF SARATOGA INTRODUCTION SECTION GENERAL FUND-FUND BALANCE RESERVE POLICIES Environmental Services Reserve Under the Restricted Fund Balance classification, the Environmental Services Reserve represents revenues collected under a prior funding structure for environmental purposes, and is therefore restricted for use in funding environmental program costs such as clean water programs,street sweeping,and storm drain cleaning services. The Environmental Service Reserve is being utilized through annual budget appropriations of $50,000. The Environmental Services Reserve originated from a one-time funding structural change and therefore will not be replenished when depleted. Hillside Stability Reserve Under the Committed Fund Balance classification, a Hillside Stability Reserve of$1,000,000 is reserved to provide funding for unanticipated or unforeseen emergency or extraordinary costs related to hillside degradation,inclusive of slide prevention and mitigation,slide repair,and associated drainage and roadwork. The reserve is to be increased by$100,000 each fiscal year from General Fund year-end net operations until a$1,000,000 reserve cap is reached. Use of the reserve requires an analysis be prepared and presented to Council for approval,or in the event of a landslide requiring immediate emergency work,the Public Works Director may direct use of up to 10%of the reserve to make emergency repairs and mitigate further damage until Council takes action. Reserve funding is to be used for emergency work which exceeds operational funding provided for in the Operating Budget. Upon use,refunding of the reserve shall again resume at$100,000 each fiscal year until the$1,000,000 reserve cap is reached. Facility Replacement Reserve The Facility Replacement Reserve is established to accrue funding for the major rehabilitation or replacement of City Buildings. Eligible uses of this reserve to finance the construction of critical City facilities include direct funding of public facility improvements, and the servicing of related debt. An initial contribution of $300,000 was established in FY 2012/13 with Council's recommendation to continue funding at this level as available. Annual contributions, reserve goal amount, and utilization shall be determined by Council as the City's economic situation changes. Future Capital Improvements&Efficiency Projects Reserve Under the Assigned Fund Balance classification, the Reserve for Future Capital Improvement &Efficiency Projects shall reserve funding for as yet undefined capital and efficiency improvement projects. Reserve funding is derived from General Fund accumulated net operations(as available)and is therefore considered a "one-time funding source". Funds are held in this reserve account until Council reviews funding requests and approves a use or transfer to a capital project fund. Use of the reserve funding is at the Council's discretion,but typically occurs in conjunction with the annual budget adoption after Council conducts a comprehensive review of capital and efficiency improvement needs. Reserve replenishment is dependent upon net operational savings in subsequent fiscal years. Carryforward Reserve Under the Assigned Fund Balance classification,the Reserve for Carryforwards represents funding held at the end of each fiscal year for critical unexpended operating budget appropriations to be purchased in the following fiscal year. The reserve is reconciled at the end of each fiscal year to both release prior year carryforward funding and reserve current year carryforward funding into the following budget year. 15 CITY OF SARATOGA INTRODUCTION SECTION Staff determines the year-end reserve amount after all fiscal year payments are finalized;the reserve amount is conceptually appropriated by Council each year in the budget adoption resolution. Working Capital Reserves In accordance with the City's cautious and conservative fiscal philosophy, the City's general prevailing financial policy holds that the City should fund daily operations with current resources in order to avoid use of short-term Tax Revenue Anticipation Notes(TRANS). To support this policy a Working Capital Reserve is established to meet cash flow requirements and prevent short-term borrowing,which in turn ensures the continuance of services to the public while also maintaining the City's credit worthiness. To provide adequate working capital,the City shall maintain a minimum reserve of 60 days of the following year's General Fund budget expenditures and up to a maximum reserve amount equal to 90 days of the following year's General Fund budget expenditures. This reserve falls under the Unassigned Fund Balance classification. A Working Capital Reserve of$2,000,000 was established in April 1994. Effective June 30, 2000, interest earnings accrue to the reserve at the end of each fiscal year based on the annual LAIF rate,with the intention to increase the reserve balance amount in proportion to Operating Budget increases. Fiscal Stabilization Reserve Under the Unassigned Fund Balance classification, a Fiscal Stabilization Reserve of $1,500,000 was established to provide temporary financing for budget stabilization caused by fiscal downturns,unanticipated extraordinary expenditures related to a natural disaster or calamity,or from an unexpected liability or funding decreases created by a legislative action. Fiscal stabilization needs may occur from revenue declines(over one or more years)of more than 5%of either property tax, the combined total of other taxes, or General Fund revenues in total, or from unanticipated extraordinary operational increases of more than 5% such as from a natural disaster or unexpected Federal, State,County or CalPERS funding changes. Council may utilize funding at budget adoption, by adoption of a budget adjustment resolution during the course of the year, or after a Federal, State, or locally declared emergency. In the event a locally declared emergency takes place,the City Manager has the authority to spend funds until such time as the City Council takes action. Reserve appropriations are to be replenished from year-end net operations, as available, on a priority basis. Development Services Reserve Under the Unassigned Fund Balance classification,the Development Services Reserve provides fiscal stability for the Community Development Department's planning and building programs. Development projects are often multi-year activities in which revenues may be collected in one year, while project expenditures may extend over several years. This reserve represents accumulated planning and building funds from years when revenues exceeded expenditures. The reserve is subsequently utilized to offset excess planning and building program expenditures through annual budget appropriations in the years where revenues are not sufficient, thereby acting as an overall funding stabilizer for multi-year development activities. Use of reserve funding is restricted to 1/3 or the reserve balance in any given fiscal year, with Council approval. Budgeted use of the Development Reserve is to be rescinded if and to the point where development revenues are sufficient to cover General Fund net operations at year-end. Funds are added to the reserve in years where Community Development Department revenues exceed Development expenditures. 16 CITY OF SARATOGA INTRODUCTION SECTION Compensated Absences Reserve Under the Unassigned Fund Balance classification, the Compensated Absences Reserve is established to smooth expenditure fluctuations resulting from the payout of accrued leave to employees at service separation and distribution payouts. Initial reserve funding is to be established at$200,000,with a targeted goal of one- third of the compensated absences liability established at year-end. Reserve funding in excess of one-third of the liability is to be returned to the General Fund Other Unassigned Reserve. Use of the reserve occurs when total annual compensated absences payouts exceed budgeted salary funds. Large payouts decrease the compensated absences liability at year-end, thereby supporting the practice of utilizing the reserve as needed. The reserve may be replenished over a three year period. Year-end reconciling allocations to and from the reserve are approved though Council's budget resolution adoption each fiscal year,with the liability and resulting reserve amounts determined as part of the year-end close process. Council Discretionary Reserve Under the Unassigned Fund Balance classification, the Council Discretionary Reserve represents unspent funds from the Council's annual appropriation. The reserve provides a mechanism to roll forward remaining Council Discretionary Funds as reserve funds are immediately re-appropriated into the following fiscal year. This allows Council the flexibility to take advantage of unforeseen opportunities or needs without the restriction of fiscal year boundaries. Use of the reserve funding requires Council approval. The reserve exists at year-end only when there are remaining unspent Council Discretionary funds at the end of the fiscal year. Other Unassigned Reserve Other Unassigned Reserve represents accumulated net operations not yet allocated to other fund balance reserves, and by definition, fall into the Unassigned Fund Balance classification. In the General Fund, a baseline of $500,000 of accumulated net operations is to remain in the Other Unassigned Fund Balance Reserve at year end to provide a buffer for unanticipated operational shortfalls and unforeseen needs. Other fund's accumulated net operations are typically accounted for in an undefined reserve account — typically just called fund balance reserve. As the other types of funds are structured for specific uses or commitments,their fund balance already has a directed purpose,whereas the General Fund is used for multiple operational purposes thereby requiring a distinction of purpose for each reserve. Council may utilize reserve funding at budget adoption or by adoption of a budget adjustment resolution during the course of the year. Reserve funding is replenished from year-end net operations,as available. SPECIAL REVENUE FUND-FUND BALANCE RESERVE POLICIES Landscape&Lighting Assessment District Funds Assessment District Funds are Special Revenue Funds, which is a type of governmental fund. As a governmental fund, the Landscape and Lighting Assessment District Funds comply with GASB 54 fund balance classifications, and by nature of the fund's purpose, fund balance reserves are classified as restricted reserves. Special Revenue Funds account for and report the proceeds of specific revenue sources that are restricted or committed to specified purposes (other than for debt service or capital projects.) For the City, Landscape & Lighting District Special Revenue Funds were established to account for each individual assessment district; thereby each fund has its own separate fund balance reserve. Each district's fund balance reserve should be sufficient to provide working capital to cover operational expenses through the first half of assessment receipts in January, therefore equitable to approximately one- half of a district's annual expenditure budget. The second half of receipts are received in June. Some districts 17 CITY OF SARATOGA INTRODUCTION SECTION may include capital improvement projects in addition to ongoing regular maintenance resulting in fund balance increasing over the years to accumulate sufficient resources for the improvement projects. As each district's situation is different, a district's maximum fund balance shall be determined by the Public Works Director. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. DEBT SERVICE FUND—FUND BALANCE RESERVE POLICIES Library General Obligation(GO)Bond Debt Fund The Library General Obligation(GO)Bond Debt Fund is a Debt Service Fund established to account for the financial resources accumulated for principal, interest, and cost of issuance expenditures associated with the Library Bond Debt. As Debt Service Funds are a governmental fund type, the fund reserves fall under the GASB 54 fund balance classifications. Debt Service Fund reserves are classified as Restricted as funding can only be spent for specific purposes as stipulated by the bond covenants. The Library GO Bond Debt Fund was established to ensure receipts are tracked separately, and funding is available for the GO Bond debt service requirements. At a minimum,the year-end fund balance reserve shall be sufficient to provide working capital to cover the semi-annual principal and interest debt payment due on August 1St as GO Bond tax receipts are received after the 1st debt payment is due. December receipts provide for the February payment. As bond assessments are collected as a percentage of property values, reserves should provide sufficient funding to compensate for tax fluctuations. The fund's reserve maximum should be no more than one-year of budgeted annual expenditures. The reserve balance is increased(or reduced)through establishing assessment rates at more(or less)than the semi-annual payments and bond services require. Therefore,replenishment(or use)of the reserve is approved by Council through budget adoption and implemented through an increased(or reduced)assessment rate as a result of the fund's net operations. CAPITAL IMPROVEMENT PROJECT FUNDS—FUND BALANCE RESERVE POLICIES Overview Capital Improvement Project(CIP)Funds account for the acquisition and maintenance of major capital assets other than those financed through special assessments or enterprise funds. Capital Project Funds are a type of governmental fund and therefore comply with GASB 54 fund balance classifications. As Council directs appropriated funding be spent for specific improvement projects,the Capital Project Fund Balance Reserves are classified as Committed Fund Balance. Budgeted capital improvement project funding is determined by the scope of work approved by Council,and remains assigned for that use until completed or reassigned by Council. Fund Balance amounts represent the total remaining funds in the individual projects at year-end. As Fund Balance amounts are determined by the point of project completion at year-end they cannot be standardized for minimum or maximum amounts. Fund Balance is re-appropriated to the capital project in the following fiscal year for the work to be completed. Street Improvement Projects Funds Street Improvement Project Funds provide for a safe and functional roadway and pedestrian street system. Each Street Improvement Fund(CIP Street Fund, CIP Grant Fund, and Gas Tax Fund)has multiple projects which roll up into the overall fund balances,but remain designated for use by project. 18 CITY OF SARATOGA INTRODUCTION SECTION The CIP Street Fund receives annual funding from fees, reimbursements, contributions, and transfers from other funds. The CIP Grant Fund receives federal, state, and local grants which vary in source and amount from year-to-year. On occasion,a private grant may be received. Typically,CIP Grant Funds have a negative fund balance as project work is conducted before reimbursement is received. Gas Tax Funds represent annual Highway User Tax and Transportation Congestion Relief revenue allocations that are to be accounted for separately and are subject to State audits. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. Park&Trail Improvement Project Funds Park & Trail Improvement Project Funds provide for capital improvements to the City's neighborhood and city parks and plaza, the sport fields, bike and pedestrian trails, and open space areas throughout the City. Each of the Park& Trail Improvement Funds (CIP Park& Trail Fund, CIP Tree Fund, and the CIP Park& Trail Grant Fund)have multiple projects which roll up into the overall fund balances,but remain designated for use by project. The CIP Park & Trail Fund receives annual funding from subventions, occasional Park-in-Lieu fees, reimbursements and contributions, and transfers in from other funds. The Tree Fund receives revenue from tree fines and transfers from other funds upon Council direction. The CIP Grant Fund receives federal, state, local and occasional private grants which vary in source and amount from year-to-year. Typically,CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. Facility Improvement Funds Facility Improvement Project Funds provide for capital maintenance and improvements of the City-owned buildings and structures throughout the City. Each of the Facility Improvement Funds (CIP Facilities Fund and the Facility Grant Fund) have multiple projects which roll up into the overall fund balances,but remain designated for use by project. The CII'Facilities Fund receives annual funding from a General Fund transfer,from Theater Ticket Surcharge Fees,and from reimbursements and contributions. The Facility Grant Fund receives revenue from grants that vary in amount from year-to-year. Typically, CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. Administrative&Technology Improvement Funds Administrative&Technology Improvement Project Funds provide for major capital expenditures to improve or enhance administrative, technology, and operational systems, processes, or functions. Each of the Administrative & Technology Improvement Funds (CIP Admin & Tech Improvement Fund and the Admin &Tech Grant Fund)have multiple projects which roll up into the overall fund balances,but remain designated for use by individual project. 19 CITY OF SARATOGA INTRODUCTION SECTION The CIP Administrative & Technology Improvement Fund typically receives funding from a General Fund transfer as administrative and technology improvement focused grants are limited. If grants are received, projects typically have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. INTERNAL SERVICE FUNDS—FUND BALANCE RESERVE POLICIES Overview Internal Service Funds are established to provide centralized cost centers for shared expenses and services in order to efficiently track costs and manage resources. Costs are then allocated back to the operational programs based on usage to more accurately determine cost of services. The City's Internal Service Funds include the two Insurance funds: Risk Management and Workers Compensation,four Service/Support funds: Office Support,IT Services,Vehicle&Equipment Maintenance, and Building Maintenance Funds, and three Equipment Replacement funds: the Vehicle & Equipment Replacement Fund,the Office Technology Equipment Replacement Fund,and the Building FF&E(Furniture, Fixture, &Equipment)Replacement Fund. As each fund is accounted for as a separate entity, operational revenues less expenditures result in either a positive or negative fund balance at any given point in time—Internal Service Funds are similar to the separate checking and saving accounts a person may use for different purposes. At year end, each fund's net balance is represented as the "Fund Balance Reserve". The intent of the Internal Service Funds Reserves is to hold appropriate levels of reserves to support cash flow needs and minimize interfund loans, not to accumulate funds in excess of expected ongoing operational costs. Reserve levels are determined by the specific operational needs of the program,but typically will fall within 25—50%of annual budgeted expenditures. Internal Service Funds are a type of Proprietary Fund; therefore GASB 54 fund balance classification (for Governmental Fund types) does not apply. Instead, Internal Service Fund's financial statement reports are presented similar to private-sector businesses and use"Restricted"and"Unrestricted Net Position"to define net operational balances(equity/fund balance reserves). Unrestricted Net Position allows reserve funding to be used(with Council approval)within the general scope of the fund's purpose. Restricted Net Position reserves are limited to a specific use,narrower than the stated purpose of the fund. For example, grant funding provided for a defined use, as in remaining funds from a Risk Management Training Grant within the Liability/Risk Management Fund, must be used for qualified training purposes. Most Internal Service Funds reserves are held in the Unrestricted Net Position category. Liability/Risk Management Reserve Fund The Liability/Risk Management Fund's Unrestricted Net Position reserve supports cash flow needs and minimizes interfund loans. Appropriate levels are maintained through service chargebacks to the programs, based on operational risk factors. Most claims are covered under the insurance risk pool JPA,the City is self- insured for up to$25,000 per General Liability and City Vehicle Auto Liability occurrence, and up to$5,000 for Property Damage and 3rd Party Auto Liability. Non-covered claims are paid fully by the City. The Liability/Risk Management program receives funding from allocations charged to covered departments, from grant funding, and from claim reimbursements. At year end, unspent funding flows into Unrestricted Net Position or Restricted Net Position for specific purposes. Requests for use of reserve balance are approved 20 CITY OF SARATOGA INTRODUCTION SECTION by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Workers Compensation Fund The Workers Compensation Fund's Unrestricted Net Position reserve supports cash flow needs and minimizes interfund loans. Appropriate levels are maintained through service chargebacks to the programs, based on operational risk factors. The purpose of the Workers'Compensation program is to provide insurance benefit coverage for employee work-related illness and/or injuries through its membership in a shared risk pool. The risk pool provides coverage up to $250,000, and excess insurance provides coverage over this amount up to $10 million. The Workers Compensation program receives funding from allocations charged to covered departments,from grant funding, and from claim reimbursements. At year end, unspent funding flows into Unrestricted Net Position, or Restricted Net Position for grant funding. Requests for use of the reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Office Support Fund The Office Support program provides a centralized cost center for administrative office support expenses, including photocopy machine leases, postage machines, shared office machines, and the associated maintenance and repair services,postage,paper,and copier supplies. For efficiency, office support costs are managed collectively and charged back to departmental programs on a use-basis allocation. Accumulated net operations are held in the Office Support Fund for working capital cash flow. The reserve is funded from the allocations charged to covered departments. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of excess reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Information Technology Services Fund Information Technology Services provide for the delivery of technology based services throughout the City's operations, including maintenance of the City's information systems and infrastructure, program implementation, streaming video, internet, landline, and wireless communications systems, cloud based technology, and support of all existing information technology as well as new technology initiatives. For efficiency,information technology costs are managed collectively and charged back to departmental programs on a service-based allocation to fund the program. Funding for the program comes from these allocations charged to covered departments. At year end,unspent funding flows into Unrestricted Net Position. Accumulated net operations are held in the Information Technology Services Fund for working capital cash flow. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Vehicle&Equipment Maintenance Fund The Vehicle & Equipment Maintenance program provides for the fuel, maintenance, and servicing of the City's fleet and major equipment to ensure all vehicles and equipment comply with manufacturer's recommendations and safety requirements. To fund the program,vehicle&equipment replacement costs are charged back to the departmental programs based on assigned usage. Accumulated net operations are held in the Vehicle & Equipment Maintenance Fund for working capital cash flow. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved 21 CITY OF SARATOGA INTRODUCTION SECTION budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Building Maintenance Fund The Building Maintenance program provides for the custodial, maintenance, and non-major repairs and building improvement services for all facilities at the Civic Center, Prospect Center, and Museum Park. Additionally,the program supports the maintenance and repair needs for the tenants of City leased buildings as defined in the lease agreements. To fund the program, total costs are allocated back to departmental programs primarily based on building space usage. General and public use is allocated to the Non- Departmental program. Accumulated net operations are held in the Building Maintenance Fund for working capital cash flow. Funding comes from the allocations charged to covered departments. At year end,unspent funding flows into Unrestricted Net Position. Requests for use of the reserve are approved by Council through budget adoption or by establishing chargeback funding levels higher or lower than budgeted expenditures. The reserve is replenished from the Fund's net operations in subsequent years. Vehicle&Equipment Replacement Reserve The Vehicle and Equipment Replacement Fund Balance Reserve accounts for accumulated funding over an asset's lifespan,to be used for the replacement of the vehicle or equipment at the end of its useful life. Initial purchases are paid for through a department's operational budget. If the purchased item is for ongoing use, the Vehicle&Equipment Replacement program appropriates an annual allocation for the replacement of the vehicles and equipment based on the asset's cost and years of life. Final determination for replacement of the asset is determined through an analysis of whether the cost of maintenance equals or exceeds the cost of replacing the asset. The reserve is funded from allocations charged to covered departments and represents accumulated funding, less amounts expended for asset replacement. At year end, unspent funding is held in Unrestricted Net Position. The reserve is to be maintained at a level sufficient to provide replacement funding of vehicles and equipment in accordance with replacement schedules. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Office Technology Equipment Replacement Fund The Office Technology Equipment Replacement Fund accounts for accumulated funding over an asset's lifespan to be used for the replacement of office technology based equipment such as desktop computers and monitors,laptops and tablets,network infrastructure,and various other related equipment. Replacement costs are charged back to the departments based on assigned equipment costs. Initial purchases are paid for through a department's operational budget. If the purchased item is for ongoing use, the Office Equipment Replacement program appropriates an annual allocation for the replacement of the equipment based on the asset's cost and years of life. The reserve represents accumulated funding, less amounts expended for replacements. The reserve shall be funded to provide replacement funding in accordance with replacement schedules. Funding for the reserve comes from the allocations charged to covered departments. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. 22 CITY OF SARATOGA INTRODUCTION SECTION Building Furniture,Fixtures&Equipment(FFE)Replacement Fund The Building FF&E Fund accounts for accumulated funding over an asset's lifespan to be used for the replacement of building furniture—such as tables,chairs,and cubicle partitions;for fixtures-such as kitchen appliances, sound equipment,lighting, for equipment-such as HVAC units,boilers,and generators;and for building repairs—such as roof replacements,windows,and carpeting. Initial purchases may be paid for through the Operating Budget or through the Capital Budget. Annual charges are then charged-back to the supported department programs with full replacement funding to be accumulated over the asset's estimated lifetime. Final determination for replacement of the asset is determined through an analysis of whether the cost of maintenance equals or exceeds the cost of replacing the asset. The reserve is intended to be maintained at a level sufficient to provide replacement funding in accordance with replacement schedules. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is then replenished from the allocation of replacement charges in subsequent years. 23 CITY OF SARATOGA INTRODUCTION SECTION o., 24 CITY OF SARATOGA INTRODUCTION SECTION CIP PROJECT PROCESS POLICY This procedural policy defines how a project moves through the CIP Budget Funding process: from the initial project idea,through project development,nomination, and project approval process,and if successful, into the Capital Budget as a funded project. The CIP project development stage of the policy takes different tracks,depending upon whether the project idea is staff driven or Council nominated. These two paths are discussed separately below,until the tracks converge for CIP project assessment preparation. STAFF PROJECT DEVELOPMENT 1. CIP Project Initiation As a function of staff s day-to-day work, infrastructure improvements and large-scale repairs and maintenance are identified as potential capital improvement projects. These are often highly-visible tangible public assets such as street repaving, or park and trail improvements. However,many CIP projects are less noticeable, including facility roof repairs, tree planting, or ADA enhancements. Projects may also be administrative or technology improvements, and hence invisible to the general public, such as code updates/revisions,process improvements, software implementations,or economic vitality programs. Staff is to discuss the CIP project idea with the appropriate staff or City Manager for feedback and refinement. Ultimately, projects need clearly defined boundaries to identify project requirements, specifications, and resources. While this is not always feasible in the initial stages of project development, the understanding that a project will eventually require a clear and specific scope will encourage better preparation for discussing the project idea and moving it through the nomination process. After receiving initial approval, staff moves into the idea development stage. 2. Idea Development To move the idea forward, staff will need to analyze and articulate the project's scope, political impacts, priority factors,resource requirements,and any other relevant considerations. a. Project Scope — Scope may include the description, project size and location parameters, project purpose, and goals or deliverables, such as products, services or results. Project justifications and assumptions should support the project's purpose and definition,and may include cost-benefit analysis, risk assessments, funding availability, or even community desirability factors. The scope should clearly state if a project is to be funded and/or completed in phases rather than as a singular body of work. If the project is ongoing infrastructure maintenance or a program project,this too should also be clearly noted. In some cases,project scope may be defined by exclusions—statements about what the project will not accomplish or produce. Additionally, constraints or restrictions may identify project limitations. Project Scope defines a commitment to produce a body of work or end-product with the resources provided under the stated assumptions. The written scope helps to manage expectations and provide clarity to the involved parties, reduce confusion and failure, prevent scope creep, and provide transparency to the community. 25 CITY OF SARATOGA INTRODUCTION SECTION b. Political Considerations - Knowledge of historical information, which attests to the necessity of Council/staff communication is of vital importance in project development. Determine whether this project has come up for consideration before,or why was it not completed previously. Are there lessons to be learned from a past project proposal? Another consideration includes knowing whether a project might be controversial. Is there a segment of the community strongly opposed to,or strongly supportive of this specific project? Will this project prompt demand for further funding or resources? Have similar projects been completed in another part of the city? Determine why this project should be considered a priority over others, and whether the project's cost or benefits would be supported by the community. c. Priority Factors - Project priority is an important consideration in the CIP approval decision factor. Council's role is to determine which projects are of higher priority than others since there will never be enough money or resources to do every project. Decision criteria may include factors such as: Health and Safety Issues Imminent failure of structure/system Short-term cost of repair vs. long-term cost of replacement Availability of external or dedicated funding Federal or State mandates Business or community support Impacts if project is not completed A project's priority is also affected by the severity of the criteria. For instance,a project that falls under the "Imminent Failure of Structure/System" criteria may be an extremely dangerous situation in need of immediate repair, or low danger of minor importance and simply remedied by removal. Another example would occur with Federal or State mandated projects. There may be little impact as to whether the mandate is met, or there may be severe fines for lack of timely completion. As a result, project priority is based on the overall assessment of the circumstances; many factors contribute to priority decisions and Council cannot rely upon a clear hierarchical order upon which to base their decisions. d. Project Resources-In the City's project development discussions,resources typically refer to financial funding. However, resources may also refer to staff time, equipment and materials, community/stakeholder participation or support, space requirements, information technology services, or some other type of support or contribution. Funding plays a critical role in project development. In many cases, lower priority projects may be approved ahead of higher priority projects simply because there is designated funding available for the lower priority projects. The ability to bring designated funding(such as a grant award)with a project proposal greatly increases the likelihood that the proposed project is approved. Overall, projects that request undesignated Capital Project Reserve funding are more competitive due to funding limitations and the number of projects competing for the same pot of funds. An additional component of project resource considerations are the unstated resources(identified above) required in project construction or implementation. For instance, staff time is limited and time spent working on one project prevents staff time being spent on another project. Project timing and staff time requirements are therefore an important component of the project that Council may wish to review. 26 CITY OF SARATOGA INTRODUCTION SECTION e. Other Considerations-There are numerous other factors not mentioned above that are also taken into consideration when assessing a project idea. For example, can the City afford the ongoing operating budget increases to maintain or implement the project? Does the project contribute toward economic vitality? Are there environmental concerns? Does it enhance the community's art,education,or cultural resources? Does the project provide operational efficiencies or cost savings? Are there risk management or legal liability issues? Does this project require development be staged in phases? Is there strong community interest in this project? Each project will differ,meaning analysis is specific to the circumstances, and diligent research and thought should be put into developing project scope and justification. In summary, the overall goal of idea development is to identify, quantify, and assess the project comprehensively. This effort is intended to ensure that a proposed project is well-thought-out, developed, and articulated thereby enabling the City Manager and Council to make educated and rational decisions. 3. City Manager Approval Staff is to propose the project idea to the City Manager for approval. If approved,the project is moved onto the CIP Project Candidate List. Staff is to notify the Administrative Services Director of the project's approval and provide pertinent project information. Staff will prepare written narratives with project scope,justification,fiscal impacts,cost estimates,timelines, etc. as necessary for Council Retreat assessment package. City Council Project Development Council Members are often the recipients of residents' suggestions for capital project work. Depending on the topic, Council Members can take these opportunities to: 1)educate the residents on why a project may not be feasible; or 2)provide residents with information on how to contact City staff with their requests to determine feasibility;or 3)Council may support the project suggestion and decide to act as a proponent for the project by guiding it through the Capital Project Nomination process: 1. Nomination-To move a project idea onto the CIP Candidate List,a Council Member is to propose the idea to fellow Council Members at the end of a City Council Meeting during the Council Items session and request that it be put on the CIP Candidate List for review during the next upcoming CIP budget cycle. The deadline for Council project nominations is the last City Council meeting in December. 2. Idea Concurrence-A second Council Member must concur with the request to move the project idea onto the Capital Project Candidate List. 3. Follow-up-A nomination to the Capital Project Candidate List is to be recorded in the City Council minutes, and acted upon as a follow-up item for staff to complete Candidate List step requirements. Staff will prepare written narratives with project scope,justification,fiscal impacts,cost estimates,timelines,etc.as necessary for Council Retreat assessment package. CIP Project Assessment 1. Assessment Package In preparation for the annual Capital Project Assessment, Finance will consolidate the CIP Project Candidates, along with proposed changes to current CIP projects, and the current year's CIP Unfunded Project List into an assessment package for Council's review. The Capital Project Assessment review provides a forum to assess all projects at one time. These assessment package will include: 27 CITY OF SARATOGA INTRODUCTION SECTION A review of available funding Existing projects in the current year's CIP Proposed changes to existing projects The current CIP Unfunded List Proposed changes to projects on the CIP Unfunded List New projects on the CIP Candidate List Review of requests in conjunction with funding sources 2. Council Retreat The Capital Project Assessment is to be held annually, prior to the start of the budget development cycle, typically at the Council Retreat Meeting that occurs in late January or early February. During the assessment review, Council will review available funding and all project requests. In their review,Council may request revisions to a project's scope,funding,or other component. However, changes that redefine a proposed project must be Council's consensus direction. As projects are assessed, they are either: Rejected Accepted,or Modified and Accepted At the conclusion of the assessment review, Council will prioritize accepted projects and designate project funding. Projects placed on the Funded List will be brought forward to the upcoming Budget Study Session. The remainder will be placed on the CIP Unfunded Project List. NOTE: Unsuccessful project ideas may be nominated for another attempt to become an approved project in the following year(s),but must again go through the project development and assessment process. 3. Budget Study Session Updated CIP funding availability and project revisions will be reviewed a final time with Council. Council will conduct a final assessment and provide consensus direction to staff for inclusion in the upcoming Proposed Budget Hearing to be held in May. CIP Project Funding 1. Proposed Budget Hearing The final Proposed Capital Budget with the recommended project funding will be brought to the City Council Budget Public Hearing in May for final review. New funded projects will be presented,along with summary level budget information. Council is to provide any final comments or direction for budget adoption. 2. Budget Adoption The Operating and Capital Budgets are brought to Council in June with all final direction incorporated into the final summaries. Council is requested to adopt the budget at this time,with budget funding effective on July 1St of that year. Funding Process Follow-up Approved and funded CIP projects will be incorporated into the Proposed Capital Budget. 28 CITY OF SARATOGA INTRODUCTION SECTION Projects that do not receive funding allocations in the current year but are scheduled for adoption in a future year within the five year CIP will be incorporated into the Proposed Capital Budget summary schedules, but are not included in the current funding allocations or issued individual project sheets. Scheduled projects will be reviewed as a proposed project in the following Capital Budget development cycle. Capital Projects which were approved but not funded or scheduled in future years,will be included on the new CIP Unfunded List, and published as a list in the Capital Budget document. Projects which were not approved will not be displayed in the Capital Budget document. These unsuccessful project ideas may be nominated for another attempt to become an approved project in the following year(s) in their current proposed form, or with modifications, but they must again compete through the project development and comprehensive assessment process. 29 CITY OF SARATOGA INTRODUCTION SECTION o 30 GENERAL FY 1Budget FY 2014/15 FY 2014/15 Additional Revenues Budget Estimates Revenue Property Tax 9,763,750 10,316,062 552,312 Sales Tax 1,085,000 1,065,176 (19,824) Other Taxes 2,890,954 2,998,954 108,000 Fees, Licenses & Permits 1,466,450 1,472,893 6,443 Charges for Services 1,887,153 1,771,954 (115,199) Other Revenues &Transfers In 1,218,910 1,315,069 96,159 Total Revenues 18,312,217 18,940,108 627,891 FY 2014/15 FY 2014/15 Expenditure Expenditures Budget Estimates Savings Salary & Benefit Savings 6,937,142 6,777,000 160,142 Operational Expenditures &Transfers Out 12,425,297 12,351,517 73,780 Total Expenditures 19,362,439 19,128,517 233,922 Budget-Transactional Net Operations (1,050,222) YE Estimated -Transactional Net Operations (188,409) Plus: Budgeted Use of Reserves Environmental Reserve 50,000 50,000 Carryforward Reserve 112,868 112,868 Capital Improvement & Efficiency Reserve 1,633,345 1,633,345 Total Net Operations(Sources & Uses) 745,991 1,607,804 FY 2013/14 FY 2013/14 Additional Revenues Budget Actuals Revenue Property Tax 9,470,400 9,526,189 55,789 Sales Tax 1,050,000 941,350 (108,650) Other Taxes 2,804,954 2,934,867 129,913 Fees, Licenses & Permits 1,517,065 1,524,209 7,144 Charges for Services 1,907,678 1,742,301 (165,377) Other Revenues &Transfers In 1,429,966 1,766,501 336,535 Total Revenues 18,180,063 18,435,416 255,353 FY 2013/14 FY 2013/14 Expenditure Expenditures Budget Actuals Savings Salary& Benefit Savings 6,850,811 6,408,421 442,390 Operational Expenditures &Transfers Out 10,368,177 10,110,035 258,142 Total Expenditures 17,218,988 16,518,456 700,532 Budget-Transactional Net Operations 961,075 Actuals-Transactional Net Operations 1,916,960 Plus: Budgeted Use of Reserves Environmental Reserve 50,000 50,000 Carryforward Reserve 73,101 73,101 Capital Improvement& Efficiency Reserve 280,880 280,880 Total Net Operations (Sources and Uses) 1,365,056 2,320,941 Z:\Finance Directory\Council-Misc\Council Retreats\2015-Jan\Council Retreat Repo rts\Mid-Yea r Attachments\Schedules for Presentation\PY Actuals&CY Estimates 1/21/2015 MID-YEAR BUDGET ADJUSTMENTS Fiscal Year 2014/15 HIM RevenueIncreases Secured Property Tax 111.8101.41111 150,000 Supplemental Property Tax 111.8101.41115 100,000 ERAF III 111.8101.41116 210,000 TOTAL GF Revenue Adjustments 460,000 Expenditure Increases none TOTAL GF Expenditure Adjustments - - • Expenditure Adjustment TORO 60" Mower 631.5203.77211 11,196 Sod Cutter 631.5203.77211 7,847 Bomag Roller(excess over budget) 631.5203.77212 15,000 *Funding from ISF Fund Balance Total Net Adjustments 34,044 Expenditure Adjustment Saratoga Ave Sidewalk-Carryforward Amount 4319142-005 81161 66,123 *Funding from Capital Project Fund Balance Total Net Adjustments 66,123 - FORECAST ASSUMPTIONS JANUARY2015 MAJOR REVENUE ASSUMPTIONS Property Tax - The resurgence in housing prices that began in the spring of 2012 has brought economic stability to the City of Saratoga. Again this year we are experiencing significant growth in Secured Property Tax(about 8%),and will even receive a surprise one-time$210,000 bonus of State ERAF funds due to the State's unexpected excess over budgeted revenues. Over the last several months however, we saw housing prices stall, dip, and then again increase in the Bay Area. This fluctuation leads to some uncertainty, however a stabilizing economy, the annual inflation factor applied to assessed values, and housing stock turnover, (resulting in higher assessed valuations), leads us to conservatively expect a modest revenue increase of 3%for the outgoing fiscal years. In December, the Assessor's Office announced the October to October California Consumer Price Index (CCPI) grew by 1.998%. Under Prop 13, this statutory rate factor is applied to a property's current valuation,up to a maximum annual increase of 2%. Inmost years,the CCPI increases by the full 2% maximum allowed. This slightly lower than maximum CCPI is not reflective of Santa Clara County's strong economy; but rather the State's overall economic condition. This lower than maximum CCPI is primarily due to the slower economic recovery in Southern California tempering the rate. Although, in comparison to last year's CCPI rate of .0454%, this year's increase CCPI illustrates that Southern California's economy has strengthened overall, and statewide we are in a stable economic era. Property Tax In-Lieu-of-VLF is expected to increase approximately 5%to 6%this fiscal year. In-Lieu payments are estimates based on prior year information rather than current year growth. If the prior year's estimates were low, a positive true-up payment is paid with the following year's revenues - and a negative true-up if payments were too high. As In-Lieu Property Tax Revenue growth trends typically mirrors Secured Property Tax revenue growth, (with some variation caused by the true- ups) the out-year projections follow the Secured Tax slowing growth assumptions. Property Transfer Tax and Supplemental Tax receipts contribute heavily to forecast projections as housing sales generate Supplemental Tax revenue from the higher assessed valuations,and Transfer Tax revenues signify increases in Secured Property Tax growth in the following year. The perception that the pace of housing sales has slowed suggest current year estimates and subsequent year receipts for both Transfer and Supplemental Tax revenues will decrease. Santa Clara County provides the City with updated assessment roll information on a quarterly basis,which will be used to further refine the estimate throughout the year. Remaining cautious, our assumptions include lower projected Transfer and Supplemental Tax revenues, with increases remaining almost flat at 1%as the housing market loses steam. Of additional note, Unsecured Property Tax increased 17%in FY 2012/13,then decreased by about 1% in FY 2013/14. A similar decrease is projected for the current year. In part, the revenue fluctuation was due to property type reclassifications between Secured and Unsecured Tax assessments,however future impacts are unclear-therefore future year projections will be held flat until a notable trend or more information emerges. Sales Tax - Similar to Property Tax In-Lieu, Sales Tax revenue distributions from the State are impacted by estimated payments, true-ups, and allocation corrections, thereby making revenue trends and projections extremely difficult to anticipate. Historically,revenues have fluctuated wildly, leaving us dependent upon our Sales Tax Consultants to provide us with reasonably close estimates. ��1 Per the consultants, this year's revenues are expected to reflect a 12% to 1S% increase due to last year's reduction for an allocation correction. Preliminary future year estimates from the consultant reflect steadily increasing receipts in the range of approximately 4%, however conservative budgeting principles and prior year's history of fairly flat revenue growth prompt a reduction in the projections to a safer 1% growth trend. Revenue projections will be reviewed and revised with updated information. Transient Occupancy Tax-Saratoga's TOT reacts quickly to economic changes. This was illustrated clearly in the economic downturn, and again with the recovery. Over the last three years, revenue grew 28%, 11%, and 13%. This year's growth is expected to be a much more moderate 4 to 5%, reflecting a stabilizing economy. Because TOT revenue can fluctuate so rapidly, and with economic growth showing signs that it is slowing down, budget projections are very conservative. The five year projections are held almost flat at 1%. Business License Tax-Revenues to date are running slightly ahead of current year budget amounts. Overall however, the business license fee portion of the business license tax has shown a slight downward trend, while the Supplemental Business License Tax portion (the tax based on a percentage of the Building Permit Valuation) has consistently increased over the last four years in alignment with building permit growth. The forecasted years are expected to remain fairly flat. Construction Tax - Represents a tax charged on additional square footage as part of a building permit fee. Over the last four years, revenue growth increases ranged from 11% to 25%, thereby bringing revenue back to pre-recession levels. The strength of the economy is expected to maintain this level of building activity into the forecast years, therefore revenue growth projections reflect a strong but flattening trend, dropping from a 5% annual increase down to 3%over the five years. Franchise Fees -Franchise Fee Revenues function as a type of Business License Tax for utilities (PG&E and SJ Water), and for the solid waste and cable providers. In FY 2012/13, the City began collecting about$160,000 in new Solid Waste Fees earmarked for the City's environmental program costs such as Saratoga's Solid Waste JPA dues and the Household Hazardous Waste program. This revenue has limited growth in the forecasted years. On average, most of the other Franchise Fee revenues have been unpredictable from year to year, and as a result, are budgeted very conservatively and specific to their own circumstances and history. With an expectation that revenues will continue to fluctuate, projections are based on the averages of the anticipated ups and downs evening out over the years. Development Revenues - Planning & Building revenues increased in line with the strengthening economy over the last couple of years. Revenues appear to have stagnated in the current budget year,however future year projections include minimal increases due to continued low interest rates and significant amounts of housing turnover. These factors favor a slight increase in construction activity that is expected to continue for the next couple of years, and then flatten and eventually fall off in year five. Each of the planning and building revenues are assessed individually, with the majority of the projections ranging from 0%to 2% annual growth. Recreation Fees - Over the last four years, Recreation revenues have remained relatively flat. A change in operational structure is expected to improve revenue slightly in the current year. Ongoing projections are forecasted with a minimal 0%to 1%change. Rental Income -With the consolidation of cell phone service providers over the last few years, cell tower leases are dwindling and lease revenue has fallen. Forecasted years include the remaining lease providers with minimal rate increases, however future cancellations may change the projections in the out-years. Park and Facility rental rates are projected to grow slowly, with increases in the 1%to 2%range. Interest Income - With the economy showing signs of improvement, it appeared we were at the bottom of the interest rate slide in FY 2012/13. Surprisingly, interest rates continued to decrease into the first half of 2014 - down to .22 of 1%. Finally however, interest rates are increasing, and revenues improved in the last fiscal year. The daily yield finally moved up to .27 of 1% in January, 2015. Reports indicate the Federal Reserve intends to maintain low interest rates for another year or two to further stimulate the economy. With this,forecasted interest reflects very slow growth. EXPENDITURE ASSUMPTIONS Salary-Labor costs were calculated under current MOU parameters with staffing levels as approved in the FY 2014/15 budget. With a conservative and cautious approach, forecasted expenditures reflect the maximum MOU increase with pay step increases, and a zero vacancy factor as open positions are typically backfilled with temporary staff until filled. Benefits - Ca1PERS pension rates will increase significantly during the forecasted years due to changes in Cal PERS'actuarial methods and assumption factors. This will be explained in more detail during the meeting. With the exception of health insurance premiums, minimal growth is expected for the remaining benefits such as disability and life insurance. Medical insurance premiums have increased an average of 9% per year over the last 10 years. The combination of reduced health benefits for new staff members, turnover and retirements, and an expected percentage decline as premium amounts increase,will contribute toward lower health insurance costs,thereby prompting a 7.5% factor for forecasted years. Operating Expenditures - These expenses include materials and supplies, fees, contract services and consultants, and are generally regulated by service level and budget availability. Under normal circumstances, operating expenditures are generally held flat or at minimal increases. Accounts are reviewed and forecasted individually,taking into consideration trends,variances, changes in service levels, and one-time occurrences. With the economic recovery and resulting cost increases, total operating expenditures increased 6% per year over the last two years. Future years however, will be more tempered, and most operational increases will be again be limited to 1%to 2.5%with total operating expense increasing by about 4%in the out years. Public Safety-Under the Sherriffs service contract,annual increases are established at CPI plus 2%. In past years this generally resulted in a 3%to 6%increase each year. As a result of the County's new pension reform measures in FY 2011/12, and turnover due to retirements, we began to see lower annual increases of around 2% for Sheriffs department wages and benefit costs. However, an agreement to increase traffic safety service hours effective in FY 2014/15, led to contract cost increases of approximately $300,000. As this is the first year with the increased service level, the impact on future costs is unclear. Therefore, a conservative 3.5% annual cost increase factor is utilized in the out-years until further information is available from the Sheriffs Office in the spring. Community Grants- Grants were projected to be consistent with FY 2014/15 year levels, and will be adjusted per Council's discussion. Internal Service Funds (ISF) - An annual growth factor of 3% was used in the Insurance Funds. With recent changes in the insurance program servicing,costs are expected to decrease over the long term. However, a conservative projection is being used until we receive further information. The Vehicle, IT and Building Maintenance ISF programs are expected to increase more rapidly due to ongoing cost and service level increases. The replacement ISF programs include a new Facility FFE program, and a more comprehensive IT Replacement program to better account for the actual cost of doing business,and improve resource management funding,transparency, and management. 3 GENERAL FUND Five Year History - FY 2014/15 Budget - Five-Year Forecast Projections as of January 23, 2015 2014/15 2014/15 2014/15 2009/10 2010/11 2011/12 2012/13 2013/14 Adopted Adjusted Estimated 2015/16 2016/17 2017/18 2018/19 2019/20 REVENUE CATEGORY Actuals Actuals Actuals Actuals Actuals Budget Budget Actuals Forecast Forecast Forecast Forecast Forecast Property Tax 8,194,364 8,026,659 8,279,947 8,966,396 9,526,189 9,763,750 9,763,750 10,316,062 10,388,500 10,674,000 10,968,000 11,270,700 11,582,300 Sales&Use Tax 954,574 990,579 1,100,489 1,051,121 941,350 1,085,000 1,085,000 1,065,176 1,075,800 1,086,600 1,097,500 1,108,400 1 1,119,500 Franchise Fees 1,663,657 1,821,131 1,852,390 2,083,704 2,112,596 2,105,954 2,105,954 2,143,954 2,186,374 2,229,700 2,274,100 2,319,400 2,365,700 Transient Occupancy Tax 144,151 184,362 205,421 228,199 257,010 245,000 245,000 270,000 272,700 275,400 278,200 281,000 283,800 Other Taxes 111,899 137,865 163,979 204,859 228,350 210,000 210,000 225,000 236,300 245,800 253,200 260,800 268,600 Business License Tax 303,990 310,273 313,984 336,298 336,911 330,000 330,000 360,000 366,600 375,700 384,300 392,400 399,800 SUB-TOTAL Tax Revenues 11,372,636 11,470,869 11,916,209 12,870,578 13,402,406 13,739,704 13,739,704 14,380,192 14,526,274 14,887,200 15,255,300 15,632,700 16,019,700 Intergovernmental 357,887 384,746 274,848 416,486 466,424 433,500 433,500 483,442 477,327 485,000 493,000 501,000 509,300 Fees,Licenses&Permits 1,111,879 1,156,486 1,236,460 1,591,517 1,524,209 1,466,450 1,466,450 1,472,893 1,505,700 1,538,600 1,560,000 1,562,100 1,531,100 Charge for Services 1,503,408 1,741,291 1,732,889 1,744,112 1,942,301 1,887,153 1,887,153 1,771,954 1,798,100 1,823,900 1,842,300 1,853,000 1,863,800 Fines&Forfeitures 350,751 284,109 233,708 180,557 144,890 165,525 165,525 152,644 155,650 158,800 161,900 165,100 168,300 Interest Income 97,044 63,883 44,731 28,670 40,003 25,000 25,000 43,000 47,300 52,000 57,200 62,900 69,200 Rental Income 444,262 438,458 507,941 463,696 442,207 463,508 465,508 482,998 489,740 496,480 503,420 510,460 517,600 Other Sources 7,184 202,276 283,845 340,371 305,927 131,377 129,377 152,985 5,293 5,300 5,300 5,300 5,300 TOTAL REVENUES 15,245,050 15,742,118 16,230,633 17,635,987 18,268,366 18,312,217 18,312,217 18,940,108 19,005,384 19,447,280 19,878,420 20,292,560 20,684,300 Fund Transfers In 325,842 224,550 205,222 106,000 167,050 - - - - - - - - TOTAL REVENUES&TRANSFERS 1 15,570,892 1 15,966,668 1 16,435,855 1 17,741,987 1 18,435,416 1 18,312,217 1 18,312,217 1 18,940,108 1 19,005,384 19,447,280 19,878,420 20,292,560 20,684,300 2014/15 2014/15 2014/15 2009/10 2010/11 2011/12 2012/13 2013/14 Adopted Adjusted Estimated 2015/16 2016/17 2017/18 2018/19 2019/20 EXPENDITURE CATEGORY Actuals Actuals Actuals Actuals Actuals Budget Budget Actuals Forecast Forecast Forecast Forecast Forecast Salary 4,318,458 4,626,977 4,339,686 4,517,031 4,704,502 5,080,340 5,080,340 5,000,000 5,028,485 5,204,482 5,386,639 5,575,171 5,770,302 Elected Officials 25,150 25,763 24,600 24,600 29,100 27,600 27,600 27,600 27,600 27,600 27,600 27,600 27,600 Temporary Employees 257,272 289,095 219,123 131,397 130,098 123,036 123,036 152,000 123,310 126,393 130,000 133,000 136,000 Overtime 79,759 95,142 22,982 34,214 34,663 34,647 34,647 42,000 37,641 38,958 40,300 41,700 43,200 Taxes 71,025 86,430 72,539 70,872 75,166 79,707 79,707 82,000 83,125 86,034 89,046 92,162 95,388 Benefits 1,552,264 1,587,006 1,395,431 1,630,992 1,434,892 1,591,812 1,591,812 1,473,400 1,769,308 1,925,746 2,091,731 2,267,374 2,458,051 SUBTOTAL Salary&Benefits 6,303,927 6,710,412 6,074,360 6,409,105 6,408,421 6,937,142 6,937,142 6,777,000 7,069,469 7,409,213 7,765,316 8,137,008 8,530,541 Materials&Supplies 154,010 151,410 163,990 187,300 236,925 296,450 301,011 296,811 290,114 295,721 301,445 307,250 313,254 Fees&Charges 671,493 733,705 708,175 738,596 759,799 848,295 935,723 910,722 798,019 864,499 852,216 941,726 912,580 Contract&Consultant Services 1,749,442 1,739,829 1,638,896 1,887,847 2,054,371 2,065,434 2,085,876 2,041,576 2,072,403 2,125,784 2,180,509 2,236,631 2,294,253 Sheriff Services 4,134,884 4,253,148 4,060,306 4,148,892 4,225,024 4,600,540 4,600,540 4,600,540 4,761,559 4,928,210 5,100,700 5,279,220 5,463,990 Meetings,Events,Training 47,808 63,668 37,783 40,611 80,468 97,400 97,400 97,121 92,654 94,784 96,940 99,144 101,416 Grants&Awards 203,758 165,915 116,203 122,006 169,725 210,576 210,576 210,576 214,608 218,740 222,970 227,320 231,800 Fixed Assets - - 11,336 - - 35,000 35,000 35,000 - - - - - Internal Service Charges 1,873,576 1,798,212 1,899,748 2,033,577 2,202,844 2,325,389 2,325,826 2,325,826 2,707,509 2,805,060 2,907,300 3,014,470 3,126,830 TOTAL EXPENDITURES 15,138,898 15,616,298 14,710,797 15,567,934 16,137,576 17,416,226 17,529,094 17,295,172 18,006,335 18,742,011 19,427,396 20,242,769 20,974,664 Fund Transfers Out 650,000 876,983 280,000 1,184,500 380,880 1,833,345 1,833,345 1,833,345 100,000 100,000 100,000 100,000 100,000 TOTAL EXPENDITURES&TRANSFERS 15,788,898 16,493,281 14,990,797 1 16,752,434 16,518,456 19,249,571 19,362,439 19,128,517 18,106,335 18,842,011 19,527,396 20,342,769 21,074,664 TRANSACTIONAL NET OPERATIONS 1 (218,006) (526,614) 1,445,057 1 989,553 1 1,916,960 1 (937,354) (1,050,222) (188,410) 899,048 1 605,269 1 351,024 1 (50,209) (390,364) 2014/15 2014/15 2014/15 2009/10 2010/11 2011/12 2012/13 2013/14 Adopted Adjusted Estimated 2015/16 2016/17 2017/18 2018/19 2019/20 PLUS: BUDGETED USE OF FUND BALANCE Actuals Actuals Actuals Actuals Actuals Budget Budget Actuals Forecast Forecast Forecast Forecast Forecast Compensated Absences - - (200,000) - - - - - - - - Environmental Program Reserve 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 Developmental Services Reserve 75,000 - - - - - - - - - - - Carryforward Reserves 22,000 68,600 31,900 247,200 73,101 - 112,868 112,868 Capital&Efficiency Project Reserves 550,000 776,983 80,779 1,504,944 280,880 1,633,345 1,633,345 1,633,345 Hillside Stability Reserve - - - (75,000) (216,721) - - - - Other Unassigned Fund Balance 25,000 95,000 - - - - - - - - - - TOTAL •• • • •3,994 463,969 1,557,736 2,516,697 2,104,220 745,991 745,991 1,607,803 • s Z:\Finance Directory\Council-Misc\Council Retreats\2015-7an\Council Retreat Reports\Forecast,UAL&Policy Attachments\Forecast at 1.23.2015 1/21/2015 3:17 PM GENERAL FUND Five Year History - FY 2014/15 Budget - Five-Year Forecast Projections as of January 23, 2015 2014/15 2014/15 2014/15 2009/10 2010/11 2011/12 2012/13 2013/14 Adopted Adjusted Estimated 2015/16 2016/17 2017/18 2018/19 2019/20 YE ALLOCATIONS TO/(FROM)FUND BALANCE Actuals Actuals Actuals Actuals Actuals Budget Budget Actuals Forecast Forecast Forecast Forecast Forecast Petty Cash - - - - - Working Capital Reserve 18,938 14,445 10,904 8,670 7,088 Fiscal Stabilization Reserve 200,000 - - - - Compensated Absences - 207,268 16,578 Environmental Program Reserve (50,000) (50,000) - (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) Developmental Services Reserve (75,000) 34,853 38,226 Development Deposits (137,368) - - (44,791) - Carryforward Reserves 46,600 258,300 (79,699) (174,100) 45,687 (118,788) (118,788) (118,788) Capital&Efficiency Project Reserves (173,017) 373,017 1,423,658 (1,504,944) 1,510,201 (1,633,345) (1,633,345) 288,891 - - - - - Facility Reserve - - 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 Grant Matching Reserve (600,000) - - - - - - - - - - - Hillside Stability Reserve 200,000 100,000 75,000 317,934 7,066 7,066 7,066 Open Space Acquistion Reserve (250,000) - - - - - - - Economic Stability - - - - - - - - Other Unassigned Fund Balance 201,840 (562,378) (203,358) 2,172,450 (268,755) 557,713 557,713 (502,801) 949,048 655,269 401,024 (209) (340,364) TOTAL TO/(FROM)FUND BALANCE 285,987 97,353 271,378 989,553 1,916,959 1 (937,354) (937,354) (75,632)1 1,199,048 905,269 651,024 249,791 (90,364) 2014/15 2014/15 2014/15 2009/10 2010/11 2011/12 2012/13 2013/14 Adopted Adjusted Estimated 2015/16 2016/17 2017/18 2018/19 2019/20 GENERAL FUND BALANCES Actuals Actuals Actuals Actuals Actuals Budget Budget Actuals Forecast Forecast Forecast Forecast Forecast Petty Cash Reserve 1,300 1,300 - - - - - - - - - - - Working Capital Reserve 2,889,077 2,903,522 2,914,426 2,923,096 2,930,184 2,930,184 2,930,184 2,930,184 2,930,184 2,930,184 2,930,184 2,930,184 2,930,184 Fiscal Stabilization Reserve 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Compensated Absences - - - 207,268 223,846 223,846 223,846 223,846 223,846 223,846 223,846 223,846 223,846 Environmental Services Reserve 563,182 513,182 513,182 463,182 413,182 363,182 363,182 363,182 313,182 263,182 213,182 163,182 113,182 Development Services Reserve 632,380 632,380 667,233 667,233 705,459 705,459 705,459 705,459 705,459 705,459 705,459 705,459 705,459 Development Deposits Reserve 44,791 44,791 44,791 - - - - - - - - - - Carryforward Reserve 68,600 326,900 247,201 73,101 118,788 - - - - - - - - Capital&Efficiency Project Reserve 126,983 500,000 1,923,658 418,714 1,928,915 295,570 295,570 2,217,896 2,217,896 2,217,896 2,217,896 2,217,896 2,217,896 Facility Reserve - - - 300,000 600,000 900,000 900,000 900,000 1,200,000 1,500,000 1,800,000 2,100,000 2,400,000 Grant Matching Reserve 600,000 - - - - - - - - - - - Hillside Stability 300,000 500,000 600,000 675,000 992,934 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Other Unassigned Fund Balance 1,284,367 721,989 518,631 2,691,081 2,422,326 2,980,039 2,980,039 1,919,525 2,868,573 3,523,842 3,924,866 3,924,657 3,584,293 TOTAL FUND BALANCE 1 8,010,680 1 7,644,064 1 8,929,122 1 9,918,675 1 11,835,634 1 10,898,280 1 10,898,280 1 11,760,092 1 12,959,140 13,864,409 14,515,433 14,765,224 14,674,860 Z:\Finance Directory\Council-Misc\Council Retreats\2015-7an\Council Retreat Reports\Forecast,UAL&Policy Attachments\Forecast at 1.23.2015 1/21/2015 3:17 PM Technology Equipment Replacement-Internal Service Fund FY Units EST Orig EST FY EST$ Item Added Cost Life Replace Replace 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Computer Systems Standard Desktop 50 900 5 45,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 Workstation 8 2,000 5 16,000 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 3,200 Monitor 73 300 7 21,900 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 3,129 Laptop 9 1,500 7 13,500 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 1,929 Tablet 6 500 5 3,000 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 Servers Small Server 1 5,000 5 5,000 5,000 5,000 5,000 Mid-Size Server 7 7,000 5 49,000 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 Large Server 3 10,000 5 30,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Virtual Server 9 1,000 5 9,000 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 Data Storage Nimble Storage Array Server 1 25,000 8 25,000 25,000 25,000 Network Network switch 9 3,000 5 27,000 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 Firewall 3 3,000 5 9,000 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 Network Cabling 1 25,000 20 25,000 25,000 Fiber Optic Cabling UNK 1 100,000 25 2019/20 100,000 100,000 Telephone System 2010 1 65,000 10 2020/21 75,000 75,000 Wireless(Wi-Fi) 2009 1 10,000 6 2016/17 20,000 20,000 20,000 20,000 Printers Check printer 1 1,500 5 1,500 300 300 300 300 300 300 300 300 300 300 300 300 300 300 300 Permits/Receipts printer 1 1,500 5 1,500 300 300 300 300 300 300 300 300 300 300 300 300 300 300 300 Plotter printer 1 5,000 8 5,000 625 625 625 625 625 625 625 625 625 625 625 625 625 625 625 UPS Battery Backups Desktop battery 60 100 3 6,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Server battery 4 2,000 3 8,000 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 2,667 Security Equipment Park and Facility Security Cameras 7 2015/16 70,000 20,000 20,000 20,000 70,000 75,000 Software Productivity Software(MS Office Suite,Adobe) 63 600 5 37,800 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 7,560 Department Software Financial software(SunGard) 2006 1 140,000 15 2021/22 140,000 140,000 Agenda Management software(Granicus) 2006 1 27,000 10 2014/15 25,000 25,000 Recreation software(RecTrac) 2001 1 11,350 15 2015/16 70,000 20,000 Community Development software(TraklT) 2007 1 155,000 15 2022/23 200,000 200,000 Electronic Document software(Laserfiche) 2000 1 15 2023/24 100,000 100,000 GIS Enterprise software - 1 10 2016/17 50,000 50,000 50,000 City Website/Intranet 2009 1 50,000 10 2015/16 75,000 75,000 75,000 Customer Relationship Management(CRM) - 1 - 10 2017/18 20,000 20,000 20,000 Technology Projects Totals 1,283,200 171,109T 131,110 96,110 76,110 156,110 131,110 246,110 256,110 156,110 151,110 131,110 111,110 121,110 56,110 156,110 CIP Project Funding 1 $ 95,000 $ 70,000 $ 20,000 $ 20,000 $ $ $ $ $ $ $ $ $ $ $ ISF Replacement Projects 1,283,200 1 $ 76,109 $ 61,110 $ 76,110 $ 56,110 $ 156,110 $ 131,110 $ 246,110 $ 256,110 $ 156,110 $ 151,110 $ 131,110 $ 111,110 $ 121,110 $ 56,110 $ 156,110 Funding Sources,Uses&Carryforward Annual Funding 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 Additonal Funding Sources(tbd) - - - - - - - - - - - - - - - Less ISF Projects 76,109 61,110 76,110 56,110 156,110 131,110 246,110 256,110 156,110 151,110 131,110 111,110 121,110 56,110 156,110 Fund Balance Remainder 150,000 198,891 262,781 311,671 380,561 349,451 343,341 222,231 91,121 60,011 33,901 27,791 41,681 45,571 114,461 83,351 Z:\Finance Directory\Council-Misc\Council Retreats\2015-Jan\Council Retreat Reports\Forecast,UAL&Policy Attachments\IT Replacement Funding Schedule 1/21/2015 Facility HE Internal Service Plan(with CIP Project funding for current replacements) FY I Lifespa FY EST$ Project Name Added EST Orig Cost n Replace Replace 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Future City Hall Administration Building-(1970,7,057 sq.ft.,$4,315,289) Connect power to Admin Building 2015 36,000 50 2065 40,000 - - - - - - - - - - - - - - - 40,000 Carpeting/partitions in Finance area 2016 25,000 15 2031 25,000 - - Carpeting in City Manager's area 2015 6,000 15 2030 6,000 7,500 Carpeting in Admin Conference Room 2015 6,000 15 2030 6,000 7,500 Chair replacement 2015 30,000 15 2030 30,000 35,000 Trash/Recycling bins 2015 9,000 15 2030 9,000 10,000 Whiteboard replacement 2015 15,000 15 2030 15,000 15,000 - Purchase and install emergency generator 2015 75,000 25 2040 75,000 - 75,000 New building location signs 2015 7,000 20 2035 7,000 - 7,000 HVAC Unit replacement 2015 10 2025 20,000 25,000 - - HVAC Unit replacement 2015 15 2030 10,000 - 15,000 - HVAC Unit replacement 2015 20 2035 20,000 - - 20,000 Roofing System 2013 15 2028 8,000 - 8,000 - City Hall Community Development Wing-(1992,4,995 sq.ft.,$1,929,003) Remodel Lobby Area 2004 100,000 15 2019 100,000 - 100,000 - Community Development area carpeting 2003 30,000 15 2018 30,000 30,000 - - HVAC Unit Replacement 2010 15 2025 20,000 - 20,000 Roofing System 2010 15 2025 7,000 - 7,000 - City Hall Community Public Works Wing-(1992,4,995 sq.ft.,$1,929,003) Windows on west side of City Hall 2017 15,000 15 2032 15,000 - 15,000 - 15,000 Public Works Gas Furnaces 2002 15,000 25 2016 16,000 16,000 - - - - Public Works area carpeting 2018 30,000 15 2033 30,000 - 30,000 - - - 30,000 HVAC Unit Replacement 2010 15 2025 20,000 - 22,000 - Roofing System 2010 15 2025 7,000 8,000 - Prospect Center Friendship Hall-(1974,4,200 sq.ft.,$751,847) Stanley access control system 2015 40,000 15 2030 40,000 - - - 45,000 Facility furnishings replacement 2016 29,000 10 2026 29,000 29,000 - 30,000 - Dishwasher replacement in Friendship Hall 2009 12,000 15 2024 12,000 - 12,000 - HD Projection system replacement 2014 13,000 10 2024 13,000 - - - - 15,000 - Prospect Center Grace Building-(1961,2,732 sq.ft.,$465,390) Prospect Center Facility Furnishings 2016 13,000 10 2026 13,000 28,000 - 30,000 - Window replacement at Grace Building 2014 30,000 15 2029 30,000 - - - 35,000 HVAC Unit Replacement 2009 15 2024 45,000 50,000 - Roofing System 2009 10 2019 35,000 - 35,000 - - Civic Theater/Council Chambers-(1964,7,436 sq.ft.,$2,606,596) Theater boiler replacement 2016 90,000 20 2036 90,000 90,000 90,000 Theater roof top duct work 2016 90,000 20 2036 90,000 90,000 90,000 Lighting over the Theater seating area 2017 30,000 25 2042 25,000 - 30,000 25,000 Meeting Dias 2018 80,000 15 2033 80,000 - 80,000 80,000 Stairway to Control Booth(remodel) 2017 40,000 20 2037 40,000 - HVAC replacement 2018 60,000 15 2033 60,000 - 60,000 60,000 Install new main electrical panel 2015 97,000 50 2065 100,000 - - 100,000 Roofing System 2020 80,000 15 2035 80,000 - 80,000 80,000 Community Center-(including Senior Center,1968,16,503 sq.ft.,$4,628,191) Hallway carpeting 2016 15,000 15 2031 15,000 15,000 - 15,000 Office carpeting 2016 20,000 15 2031 20,000 20,000 20,000 Kitchen oven 2016 12,000 20 2036 12,000 12,000 12,000 Kitchen dishwasher 2017 20,000 20 2037 20,000 - 20,000 20,000 Hallway light tunnels 2017 8,000 20 2037 8,000 8,000 8,000 Stage 2017 85,000 30 2047 85,000 - - Phase III Stanley access control security system 2015 25,000 15 2030 25,000 30,000 - New cool roof 2015 93,000 20 2035 90,000 - - 90,000 Facility furnishings 2019 69,000 15 2034 69,000 - 75,000 69,000 HVAC replacement 2018 60,000 20 2038 60,000 60,000 60,000 [Path]Facility ISF Funding Schedule 1/21/2015 HD projection and sound in MPR 2016 25,000 10 2026 25,000 25,000 28,000 Whiteboard replacement 2018 15,000 15 2033 15,000 - 15,000 - 15,000 Generator 2017 25 2042 90,000 90,000 - - 90,000 Recreation Portable replacement 1985 40 2025 80,000 - 85,000 - Replace flooring-MPR 2014 20 2034 80,000 - - 80,000 Senior Center-(included with Community Center,1968,16,503 sq.ft.,$4,628,191) Stanley access control system 2015 10,000 15 2030 10,000 12,000 - Kitchen dishwasher 2017 12,000 15 2032 12,000 12,000 - - 12,000 Lobby and Office areas HVAC 2019 18,000 15 2034 18,000 - - 18,000 18,000 Office area hallways carpet 2016 15,000 15 2031 15,000 15,000 - 15,000 Hallways light tunnels 2017 8,000 20 2037 8,000 - 8,000 - 8,000 Preschool Portable-(1985,1,440 sq.ft.,$98,283) Preschool Portable replacement 1985 40 2025 100,000 - 100,000 - Warner Hutton House-(1900,1,838 sq.ft.,$530,800) Facility furnishings replacement 2017 20,000 15 2032 20,000 20,000 - 20,000 Warner Hutton House HVAC unit 2019 15,000 15 2034 15,000 - - 15,000 Roofing System 1990 35,000 30 2020 50,000 - - - - 50,000 - Corporation Yard-(1972,5,340 sq.ft.,$904,216) Equipment Sheds 2020 125,000 25 2045 125,000 25,000 25,000 25,000 25,000 25,000 - 125,000 Solar Panel Replacement 2011 60,000 15 2026 60,000 - - - - - 65,000 - - HVAC Replacement 2012 20,000 15 2027 20,000 - 25,000 - Saratoga Library-(1976,49,947 sq.ft.,$13,968,373) Solar Panel Replacement 2011 230,000 20 2031 100,000 - - 100,000 Boiler Replacement 2009 20 2029 150,000 - 175,000 - HVAC Unit Replacement 2003 25 2028 200,000 225,000 - - Roofing System 2005 25 2030 150,000 - - 175,000 - Village Library(Book-Go-Round)-1927,1,816 sq.ft.,$529,575) Book-Go-Round windows 2019 10,000 30 2049 10,000 - 10,000 - 10,000 Book-Go-Round flooring 2016 12,000 15 2031 15,000 12,000 15,000 HVAC Unit Replacement 2013 10,000 20 2033 10,000 10,000 Roofing System 1928 25 2039 50,000 50,000 Saratoga Museum Building-(1920,1,245 sq.ft.,$319,343) Museum building attic insulation 2017 4,000 25 2042 4,000 4,000 4,000 Museum building lighting 2018 5,000 15 2033 5,000 - 5,000 5,000 HVAC Unit Replacement 2013 20 2033 14,000 14,000 Roofing System 1988 30 2018 75,000 - - 75,000 - - - - Miscellaneous Misc Facility Infrastructure Replacements 2016 - 15 2031 25,000 25,000 25,000 25,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 - Project Totals 2,159,000 3,078,000 $ 402,000 $ 382,000 $ 430,000 $ 288,000 $ 205,000 $ 50,000 $ 50,000 $ 50,000 $ 127,000 $ 317,000 $ 203,000 $ 75,000 $ 283,000 $ 260,000 $ 402,000 $ 1,612,000 CIP Project Funding $ 233,000 $ 240,000 $ 325,000 $ 25,000 ISF Replacement Projects 3,078,000 $ 169,000 $ 142,000 $ 105,000 $ 263,000 $ 205,000 $ 50,000 $ 50,000 $ 50,000 $ 127,000 $ 317,000 $ 203,000 $ 75,000 $ 283,000 $ 260,000 $ 402,000 Funding Sources,Uses&Carryforward Annual Funding 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Additonal Funding Sources(tbd) - - - - - - - - - - - - - - - Less ISF Projects 169,000 142,000 105,000 263,000 205,000 50,000 50,000 50,000 127,000 317,000 203,000 75,000 283,000 260,000 402,000 Fund Balance Remainder 31,000 89,000 184,000 121,000 116,000 266,000 416,000 566,000 639,000 522,000 519,000 644,000 561,000 501,000 299,000 [Path]Facility ISF Funding Schedule 1/21/2015 CalPERS Unfunded Accrued liability Unfunded Accrued Liability Approximate CalPERS UAL at 6/30/2015: $7.7 Million Option 1: CalPERS Pay-as-you-go 30 Year payment plan: Principal: $ 7,720,000 Interest: $ 10,308,000 (at 7.5%interest rate with mixed bases of 22 and 30 year terms) Total Cost: $ 18,028,000 Year 1 Year 2 Year 3 Year 4 Year 5 "2044/45 FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20$ 301,733 $ 362,702 $ 427,057 $ 494,947 $ 566,527 Note-Ca1PERS payments ramp up($61,000 to 72,000)for 5 years,level off for 20 years,ramp down final 5 years Option 2: Full UAL Pay• Bond 1 Year Term Principal: $ 7,720,000 Interest: $ 5,674,000 (at 4%interest rate with 30 year term) Total Cost: $ 13,394,000 Year 1 Year 2 Year 3 Year 4 Year 5 Total Cost at FY 2015/16 FY 2016/17FY 2017/18 FY 2018/19 FY 2019/20 FY 2034/35 $ 446,500 $ 446,500 $ 446,500 $ 446,500 $ 446,500 111 Option . Bond 1 Year Term �01 Principal: $ 7,720,000 Interest: $ 3,144,000 (at 3.5%interest rate with 20 year term) Total Cost: $ 10,864,000 Year 1 Year 2 Year 3 Year 4 Year 5 "is FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 $ 543,200 $ 543,200 $ 543,200 $ 543,200 $ 543,200 •. . Pay-as-you-go payment Principal: $ 7,720,000 Payoff $ 3,381,000 Balance: $ 4,339,000 (option to payoff or make partial pays on balance at later date) Interest: $ 6,683,000 (at 7.5%interest rate with 30 year term) Total Cost: $ 11,022,000 Year 1 Year 2 Year 3 Year 4 Year 5 Total Cost at FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2044/45 $ 61,029 $ 121,998 $ 186,353 $ 254,243 $ 325,823 1 111 Note-CalPERS payments ramp up($61,000 to 72,000)for 5 years,level off for 20 years,ramp down final 5 years Recommended Partial UAL Payoff Funding Source Option: Fiscal Stability Reserve-Balance of$1.5 million 1,000,000 Working Capital Reserve-Balance of$2.93 million 930,184 Capital&Efficiency Reserve-Current YE Balance of$2.02 million 500,000 FY 2014/15 Budget Adjustment-Estimated Net Operations of$1.6 million 951,010 TOTAL Partial Payoff Amount $ 3,381,194 Z:\Finance Directory\Council-Misc\Council Retreats\2015-Jan\Council Retreat Reports\Forecast,UAL&Policy Attachments\UAL presentation 1/21/2015 CalPERS Unfunded Accrued Liability Pensions are funded by a combination of: 1 Investment earning on the CaIPERS portfolio 2 Contributions by employees 3 Contributions by employers Contribution rates change annually based on a number of factors: 1 Investment returns 2 Benefit changes 3 Changes in actuarial methodology 4 Changes in actuarial assumptions Mortality rates,gender,payroll,retirement trends,staff composition(i.e.ages/no.of working years) UAL BASES UAL Bases(components)represent accumulated pension liabilities vs investment assets,and contribute toward annual payment at different rates 1 SIDE FUND City's share of assumed liability with the creation of Risk Pool in 2000 Paid off in Feb 2013 2 SHARE OF PRE-2013 POOL UAL Accumulated share of pools asset gains/losses and actuarial assumption impacts up to 2013 Payments at flat rate over amortization period 3 ASSET(GAIN)/LOSS Impact of 2013 actuarial change in asset valuation-from actuarial value of assets to market value of assets (more conservative approach) Payments ramp up over 5 years,remain flat for 20 years,ramp down over last 5 years 4 NON-ASSET(GAIN)/LOSS FY 2012/13 Investment return/impact 13.2%ROI exceeds assummed 7.5 ROI-higher ROI than actuarial assumption results in a liability decrease-($592 for 2015/16) 5 NON-ASSET(GAIN)/LOSS FY 2013/14 Investment return/impact 18.4%ROI exceeds assummed 7.5 ROI-higher ROI than actuarial assumption will result in a liability decrease-(tbd) Expected Expected Scheduled Payment Date Amortization Balance Payment Balance Payment Balance Payment for as%of Base Established Period 6/30/13 2013/14 6/30/14 2014/15 6/30/15 2015/16 Payroll 1 SIDE FUND 06/30/13 $ - $ - $ - $ - $ - $ - 0.000% 2 SHARE OF PRE-2013 POOL UAL 06/30/13 22 $ 3,182,123 $ 109,457 $ 3,307,295 $ 167,963 $ 3,381,194 $ 240,704 4.672% 3 ASSET(GAIN)/LOSS 06/30/13 30 $ 3,791,145 $ - $ 4,075,481 $ - $ 4,381,142 $ 61,621 1.196% 4 NON-ASSET(GAIN)/LOSS 06/30/13 30 $ (36,444) $ $ (39,177) $ $ (42,115) $ (592) (0.011%) 5 NON-ASSET(GAIN)/LOSS 06/30/14 30 $ - $ $ - $ tbd tbd tbd TOTAL $ 6,936,824 $ 109,457 $ 7,343,599 $ 167,963 $ 7,720,221 $ 301,733 5.857% Z:\Finance Directory\Council-Misc\Council Retreats\2015-Jan\Council Retreat Reports\Forecast,UAL&Policy Attachments\UAL presentation Prepayment Funding Options/Sources Estimated bond interest rates and costs $3.3 Million Bond Payoff Interest Annual Total Rate Payment Interest 1 10 Year Bond 2.5% $ 386,000 $ 482,000 2 15 Year Bond 3.0% $ 283,000 $ 867,000 3 20 Year Bond 3.5% $ 238,000 $ 1,376,000 $5 Million Bond Payoff Interest Annual Total Rate Payment Interest 1 10 Year Bond 2.5% $ 571,000 $ 713,000 2 15 Year Bond 3.0% $ 418,000 $ 1,282,000 3 20 Year Bond 3.5% $ 352,000 $ 2,036,000 $7.7 Million Bond Payoff Interest Annual Total Rate Payment Interest 1 10 Year Bond 2.5% $ 880,000 $ 1,098,000 2 15 Year Bond 3.0% $ 645,000 $ 1,975,000 3 20 Year Bond 3.5% $ 542,000 $ 3,136,000 4 30 Year Bond 4.0% $ 445,000 $ 5,659,000 6/30/2015 Estimated Fund Balances Estimated 6/30/2015 Balance General Fund Restricted Environmental Services 363,182 Committed Hillside Stability 1,000,000 Assigned Capital & Efficiency Reserve 2,217,896 Facility Reserve 900,000 Unassigned Working Capital Reserve 2,930,184 Fiscal Stabilization Reserve 1,500,000 Development Services 705,459 Compensated Absences 223,846 Other Unassigned 1,057,713 Total General Fund $ 10,898,280 Special Revenue Funds Landscape& Lighting Funds 700,651 Total Special Revenue Funds $ 700,651 Internal Service Funds Liability/Risk Management 274,268 Workers Compensation 232,054 Office Stores Fund 44,371 IT Services 211,344 Vehicle& Equip Maintenance 92,172 Building Maintenance 219,671 Vehicle& Equip Replacement 656,380 IT Equipment Replacement 149,588 Total Internal Service Funds $ 1,879,848 Debt Service Funds GO Bond Debt Service Funds 859,101 Total Debt Service Funds $ 859,101 Capital Improvement Funds Streets Program 2,000,000 Parks&Trails 750,000 Facility Improvements 100,000 Technology&Administrative 100,000 Total Capital Improvement Funds $ 2,950,000 Total All Funds $ 17,287,880 CITY OF SARATOGA INTRODUCTION SECTION BUDGET & FINANCIAL POLICY INFORMATION POLICY CHANGES AND EDITS MADE TO ADOPTED FISCAL POLICIES ARE HIGHLIGHTED IN YELLOW i CITY OF SARATOGA INTRODUCTION SECTION BUDGET PROCESS OVERVIEW he City of Saratoga adopts an annual The City's Governmental Funds consist of the Operating and Capital Budget. The Capital General Fund, Special Revenue Funds, Debt Budget is in effect an annual update to the Service Funds, and Capital Project Funds. five-year Capital Improvement Plan. The Governmental Fund budgets are developed using budgets contain summary level information for the modified accrual basis of accounting. Under revenue and expenditure appropriations for the this basis, revenues are accounted for in the period fiscal year beginning July I st and ending June 30th. collected, or accrued if revenue amounts can be The budget documents are prepared on the same determined and collected within sufficient time for basis as the City's financial statements, and in use in paying current period expenditures. Under accordance with generally accepted accounting governmental accounting, principal and interest on principles(GAAP). general long-term debt are budgeted as expenditures when due — the liability for long term debt is not BUDGET PURPOSE included. The Operating and Capital Summary Budget serves Proprietary fund budgets are adopted using the full as the City's financial plan, as well as a policy accrual basis of accounting whereby revenue budget document, a communications tool, and an operations guide. Developed with an emphasis on projections are developed recognizing revenues long range planning, service delivery, and program expected to be earned during the period, and management, a fundamental purpose of these expenditures budgeted for expenses anticipated to documents is to provide a linkage between the be incurred in the fiscal year. The City maintains services and projects the City intends to accomplish, one type of proprietary fund: Internal Service and the resources committed to get the work done. Funds. The format of the budget facilitates this linkage by Fiduciary funds are also budgeted under the clearlyidentifying program purpose, keyprojects, modified accrual basis. Trust funds are subject to Yi g l g p o p trust agreement guidelines, and Agency Funds are and workplan goals, in relation to revenue and expenditures appropriations. held in a custodial capacity involving only the receipt, temporary investment, and remittance of BASIS OF BUDGETING AND ACCOUNTING resources. Saratoga administers two agency funds. Developed on a program basis with fund level SUMMARY OF BUDGET DEVELOPMENT authority, the operating and capital budgets represent services and functions provided by the The City develops it budgets with a team-based City in alignment with the resources allocated budgeting approach. City Management guides the during the fiscal year. process through budget development; however program budgets and workplans are developed with Basis of Budgeting and Accounting refers to the each department program manager's oversight and timing factor concept in recognizing transactions. expertise. This approach allows for hands-on This basis is a key component of the overall planning,and creates a clear understanding for both financial system because the budget determines the management and staff of a program's goals and accounting system. For example, if the budget functions to be accomplished in the next budget anticipates revenues on a cash basis,the accounting year. system must record only cash revenues as receipts. If the budget uses an accrual basis,accounting must THE DEVELOPMENT PROCESS do likewise. The City's budgeting and accounting Typically both the Operating and Capital Budget systems both use a hybrid of modified accrual and processes begin in January with the City Council full accrual basis in the accounting and budget and City Manager's development and refinement of systems. initiatives and directives for the upcoming budget year. Initiatives and directives are developed in 2 CITY OF SARATOGA INTRODUCTION SECTION conjunction with a review of the current year's Council as to the conformity of the plan with the budget status and the Five-Year Financial Forecast City's Adopted General Plan. at the annual Council Retreat. The forecast Final council-directed revisions to the proposed provides an overview of service level operations as budget are made and the budget documents are it assesses funding sources and uses,and guides the resubmitted to the Council for adoption, again in a discussion for the upcoming budget direction. publicized public hearing prior to the beginning of the fiscal year. The CIP is also reviewed during this time to determine funding capabilities, project priorities, Section 2-20.050(i) of Saratoga's City Code and to refine project workplans. Although the CIP requires the City Manager to prepare and submit an Budget and five year work plan is a stand-alone annual budget to the City Council. This is body of work, CIP projects may impact the City's accomplished in June, when the final proposed ongoing operations through increases in budget is formally submitted to the Council in the maintenance costs, and therefore must be subsequent public hearing. incorporated into the Operating Budget's service level requirements. The approved resolutions to adopt the CIP and operating budgets and the appropriation limitation In February, the budget preparation process begins (Gann Limit)follow later in this section. officially for staff. Budget assumptions, directives and initiatives are provided to set the City's overall BUDGET AMENDMENTS objectives and goals. Over several months, staff During the course of the fiscal year, economic and identifies and analyzes program revenue and workplan changes or unanticipated needs may expenditure projections in coordination with necessitate adjustments to the adopted budgets. The Finance/Budget staff and City management. City Manager is authorized to transfer Capital improvement projects are assessed and appropriations between categories, departments, refined, and CIP funding and appropriation projects,and programs within a fund in the adopted requirements are finalized. budget, whereas the City Council holds the authority for budget increases and decreases and Through rounds of budget briefings and revisions, transfers between funds. staff's final program budget and workplan are developed by the end of April; operational and capital workplans are finalized, and the Finance/Budget staff prepares financial summary information for City Council review in addition to departmental budgets and workplans. BUDGET ADOPTION During the month of May,the City Council reviews the proposed Operating and Capital Summary Budget, and the Capital Improvement Plan for the five year period in a public hearing. Notice of the hearing is published in a local newspaper at least ten days prior to the Council's public hearing date. The public is invited to participate and copies of the proposed budgets are available for review on the City's website, in the City Manager's office and at the budget hearing. Under requirements established in Section 65401 of the State Government Code, the City's Planning Commission also reviews the proposed Capital Improvement Plan and reports back to the City 3 CITY OF SARATOGA INTRODUCTION SECTION BUDGET CALENDAR December Budget Office to begin development of financial forecast and budgets for following fiscal year, including: Draft operating budget revenue and expenditure projections Prior fiscal year-end fund balance available for CIP January Budget Office to prepare Mid-Year Budget Report and Five-Year Financial Forecast for Council review at annual retreat For Operating Budget: Budget Office to provide budget information to staff on budget assumptions,directives,initiatives,and goals Budget Office and Program Managers to prepare Internal Service and Equipment Replacement Fund analyses and schedules,finalize internal service rates Budget Office to prepare operating budget worksheets for updates, including departmental/program narratives, staffing and financial worksheets,asset and staffing requests. For Capital Budget: Budget Office to prepare updated five-year CIP project worksheets February Budget Office and departments to review current User Fee Schedule for appropriate changes in preparation of annual updates process For Operating Budget: Budget Office to finalize Internal Service Fund program workplans Budget Office to prepare budget worksheets for departments,including staffing and internal service program costs Departments to prepare draft revenue expenditure workplans For Capital Budget: Project Managers to finalize funding estimates, scope of work,and cost estimates for new proposed projects March For Operating Budget: Departments to finalize budget work plans Review proposed budgets with City Manager Departments and Budget Office to finalize budget changes For Capital Budget: Project Managers to determine year end CIP project estimates City Manager to approve recommended proposed CIP projects 4 CITY OF SARATOGA INTRODUCTION SECTION April For Operating Budget: Departments to finalize program narratives and Performance Measures Budget Office to compile final program narratives, financial and supplemental schedules, and financial budget summaries and charts for City Council Budget Study Session For Capital Budget: Project Managers to finalize new project information for CIP submittal Public Works Manager to bring new projects to Planning Commission meeting for General Plan conformance review City Council to hold Public Hearing for Annual User Fee Update City Council to hold Budget Study Session May For Operating&Capital Budgets: Final budget briefing with City Manager Budget Office to incorporate Council directed changes into proposed budgets and prepare final documents for Public Hearing presentation City Council to hold Proposed Budget Hearing June For Operating&Capital Budgets: City Council revisions incorporated into budget documents City Council adoption of Operating and Capital Budget City Council adoption of Gann Appropriation Limit July/ Final document preparation of financial and supplemental schedules,charts, August/ reference materials, etc. September Adopted Operating and CIP Budget documents finalized,posted on website, and distributed 5 CITY OF SARATOGA INTRODUCTION SECTION o 6 CITY OF SARATOGA INTRODUCTION SECTION FISCAL MANAGEMENT POLICY STATEMENTS As a general philosophy to practice fiscal responsibility, the City of Saratoga's conservative and cautious financial management is achieved through responsible, sustainable, and enforceable fiscal policies and internal controls to ensure prudent and efficient use of resources. These policies and controls represent long-standing accounting, budgeting, debt, investment, and reserve principles and practices, and are the foundation which guides the City in maintaining its financial stability. The following general fiscal management policy statements provide an overview of financial, operational, and budgetary management and provide a guideline for fiscal operations. As many fiscal policies are administrative in nature, detail level policy direction are not included in the budget document. However, fiscal policies that rise to Council review and approval standards are incorporated into the budget document for annual adoption by Council. Council approved detail fiscal policies include the Fund Balance Reserve Policy and the Capital Project Process Policy. Others will be added as approved. The Council approved detail fiscal policies follow the Fiscal Management Statements within this policy section. General Financial Principles The City's fiscal policies are structured to ensure fiscal responsibility, accountability, transparency, and efficient use of resources. Fiscal policies are to be reviewed,updated,and refined as necessary,with general policy level decisions brought to City Council for review and approval, and operation level functions approved by the City Manager. The City Council's financial based goals, objectives, and policies, are incorporated into and implemented with the development of the City's Operating and Capital Budgets. Efforts will be coordinated with other governmental agencies and joint power associations to achieve common policy objectives, share the cost of providing governmental services, and support legislation favorable to cities at the state and federal level. The City will seek out, apply for, and effectively administer federal, state, local, and foundation grants which address the City's current priorities and policy objectives. Appropriations and Budgetary Control The City Council adopts an annual balanced operating budget and the first year of an integrated five-year capital improvement plan budget on an annual basis, to be effective for the fiscal year running from July 1St through June 301. Balanced budgets present budgeted sources in excess of budgeted uses. Budgeted "Sources" include Revenues, Transfers In, and Appropriated Uses of Fund Balance. Budgeted "Uses" include Expenditures and Transfers Out. Operating and capital budgets are to align with the City's long- term financial goals. The City's budget practices utilize long-range planning as a decision making tool, and annually adopts a structurally balanced fiscal plan that retains the City's fiscal health, preserves essential services, and supports short and long-term goals in a financially judicious manner. Each year the Finance & Administrative Services Department provides an updated five year financial forecast to the City Council at the Annual Council Retreat(scheduled in late January or early February) 7 CITY OF SARATOGA INTRODUCTION SECTION to assist Council with formulating direction for long-range planning, operating budget development, and capital funding appropriations. Budgets are prepared on the same basis of accounting used for financial reporting: governmental fund types (General, Special Revenue, and Debt Service) are budgeted according to the modified accrual basis of accounting; proprietary funds (Internal Service Funds) and fiduciary funds are budgeted under the accrual basis of accounting. The Operating Budget is generally funded with current year revenues. Dedicated fund balance reserves, such as the Carryforward Reserve,the Environmental Reserve, or the Fiscal Stabilization reserve may be used with Council approval to fund current operational expenses that extend beyond the annual fiscal year, or were funds collected and dedicated for longer term use. Council may also approve the use of long-term debt for operational liabilities if fiscally prudent. City policy is to fund the Capital Budget with surplus and dedicated capital funding resources. Dedicated funding sources include: Gas Tax(HUTA)revenues;road assessment revenues;grants;community benefit assessments; and federal,state,local,and private grants. In practice, budgeted revenues are conservatively stated and budgeted expenditures are comprehensive, allowing for the annual operational and capital improvement goals to be completed. With effectively managed revenue streams and efficient use of resources, fiscal year-end operational budget surpluses are available to fund future capital improvement projects and contribute to the City's fiscally responsible reserve accounts. The City Council maintains budgetary control at the fund level; any changes in total fund appropriations during the fiscal year must be submitted to the City Council for review and Council majority approval. Operating Budget appropriations lapse at the end of each fiscal year unless specifically re-appropriated by the City Council in the following fiscal year. Capital Budget appropriations are structured as a multi-year workplan;therefore project expenditure balances are carried forward to the following fiscal year as part of the annual budget adoption until funding is exhausted or the project is completed. The City Manager is authorized to implement the City's workplan as approved in the adopted budget. Within a specific fund, the City Manager may transfer appropriations between categories, departments, programs,and projects as needed to implement the adopted budget,provided the total appropriation amount provided for any one fund does not change. Recurring expenditures are to be funded with recurring revenues, or revenues specifically designated for operational use. One time expenditures may be funded with one-time revenues or fund balances. Fund balance reserves are to be used for non-recurring one-time and capital projects. The City Council has established a $50,000 annual `Council Contingency' appropriation for Council approved unplanned expenditures. Unexpended appropriations are carried forward into the following fiscal year. The Recreation Department cost recovery rate goal is to exceed the California Parks&Recreation Society's (CPRS) average cost recovery rate for all California recreation departments as established in the current CPRS benchmarking report(approximately 65%). The Community Development Department cost recovery rate strives to attain close to full cost recovery as development and building services are primarily for individual enrichment rather than as a community enrichment function. As some aspects of the department's function provides community benefit, the general fund offsets the shortfall between revenues and expenditures. The Annual Operating Budget will inelude a General Fund transfer of$100,000 to the Faeility impfovement CIP for minor faeflity improvement projeets outside of typieal maintenanee and repair-work ftmded thrott the Building Maintenanee pragfam. 8 � ' MMM - CITY OF SARATOGA INTRODUCTION SECTION The CIP Street Resurfacing/Pavement Management project has an established minimum annual funding goal of$1,000,000,with Gas Tax Revenues and Road Impact Fees as dedicated funding sources. Project expenditures are restricted to street resurfacing/rehabilitation work in support of attaining an average 70 PCI rating for Saratoga's streets Council has designated the following capital projects as fundamental to maintaining City infrastructure on an ongoing basis, and are therefore directed to have priority for available Capital Project funding in the amount of$50,000 each year: 1. Annual Sidewalk Repairs 2. Annual Storm Drain Repairs 3. Roadway Safety and Traffic Calming 4. Risk Management Projects Auditing and Financial Reporting California State statutes require an annual financial audit of the City's financial records and transactions by independent Certified Public Accountants. The City shall comply with Generally Accepted Accounting Principles(GAAP)and produce annual financial reports pursuant to Governmental Accounting,Auditing, and Financial Reporting(GAAFR)guidelines. The Finance Division shall prepare required annual financial reports on a timely basis. The Comprehensive Annual Financial Report(CAFR) shall be prepared upon completion of the fiscal year close for review by the City's auditors. Following the Auditor's issuance of an opinion letter,the CAFR shall be presented to Council. Additional financial reports issued by the Auditor's may include: Singe Audit Report (annual report of federal grant expenditures if in excess of$600,000 is expended in a year), a Transportation Development Act (TDA) report (annual report of TDA fund expenditures), an Appropriations Limit review report (to establish tax revenue appropriation limit), and a Management report on the City's Internal Controls. A State required Annual Cities Report, and Annual Streets Report are also completed in conjunction with the year-end close. Weekly check registers and monthly Cash and Investment Reports will be submitted for review and approval at City Council meetings. Quarterly financial reports will provide a status update on General Fund revenues and expenditures for the first,second,and third quarters. A year-end recap is to be provided after the City's annual financial audit is completed. At mid-year, a budget status report is presented at the City Council retreat which includes a more comprehensive review and includes proposed budget adjustments as appropriate. Development Related Financial Policies The Development Reserve was established to provide stability for multi-year project services. The reserve is funded by development revenues in excess of development expenses at fiscal year-end. The reserve is available for use in those years where a shortfall occurs; when development revenues fall below development expenses. Use of the reserve is limited to a maximum of 1/3 of the reserve balance in any given fiscal year; with planned use of the reserve rescinded up to the amount development revenues are sufficient to cover General Fund net operations. Additional information on this Development Reserve is located in the Fund Balance Reserve Policies section. 9 CITY OF SARATOGA INTRODUCTION SECTION The Williamson Act, also known as the California Land Conservation Act,was passed by the California Legislature in 1965 to encourage rural&agricultural land owners to keep their land undeveloped. When land owners enter into a contract under the act, they benefit from lower property taxes, which are based on the property's current use,rather than paying market value based tax rates. In exchange,the property is to remain undeveloped and continue to function in the same manner for the duration of the contract. Contracts run for 10 years and are automatically renewed unless the farmer or rancher cancels it. The City does not limit the number of Williamson Act contracts entered into each year. The Mills Act is State-sponsored legislation granting local governments the authority to enter into an agreement with property owners to allow reduced property tax payments in return for the restoration and continued maintenance of their historic property. Since the agreement reduces property tax assessment, the City receives a smaller share of property tax revenue in comparison to a property that is assessed at market value. The City will allow approval of up to three Mills Act Contracts per year. Expenditures and Purchasing All expenditures shall be in accordance with the City's purchasing policy,travel policy,credit card policy, or any other applicable guidelines. Expenditures are managed at the program level. Program managers are to ensure expenditures do not exceed the budgeted workplan and must take immediate action if at any time during the fiscal year an operating deficit is projected at year-end. Corrective actions may include expenditure reductions, or with Council approval,budget adjustments, service reductions, or service fee increases. The City's current purchasing policy, (effective date of 4/23/2007)establishes purchasing authority levels, purchasing procedures, and procedural requirements, for the procurement of supplies, equipment, and services,in conformance with Federal and State codes and regulations,and City Ordinance No.2-45. Public Work projects governed by the State's Public Contract Code are excluded from provisions of the City's purchasing policy. The contract authority limit is established at the State level, and adjusts per State code. Guidelines established by the City's Purchasing Policy directs the City's departments to purchase the best value obtainable, securing the maximum benefit for funds expended,while providing all qualified vendors an equal opportunity to do business with the City. Services and supplies purchases which exceed$5,000 require written quotes,and must be approved by the Purchasing Officer or designee, typically through the Purchase Order process. Documentation is to be retained by the department in accordance with the records retention policy and schedule. Services and supplies purchases exceeding$25,000 must be authorized by the City Council,unless purchase type is excluded under the Purchasing Policy. Fixed Assets and Infrastructure Tangible assets with a cost equal to or greater than $10,000 and a useful life of more than one year are considered fixed assets and added to the capitalization schedules. Repairs and maintenance of infrastructure assets will generally not be subject to capitalization unless the repair extends the useful life of the asset. The City will sustain a long-range fiscal perspective through the use of a five-year Capital Improvement Plan designed to maintain the quality of City infrastructure, including streets, sidewalks, curbs and storm drains, lighting, building, parks, and trees, and through Internal Service Fund programs to both maintain and replace City buildings,vehicles,and equipment on an ongoing basis 10 CITY OF SARATOGA INTRODUCTION SECTION Asset information is retained to provide information for preparation of financial statements in accordance with GAAP,with emphasis placed on completion of GASB 34 requirements. Internal Service Funds Internal Services Funds are established to both allocate operating costs to departments for support and maintenance services,and to spread the City's replacement and operational costs equitably over fiscal years for the purpose of providing an accurate and balanced long-range fiscal perspective of the use of services and assets. Vehicles,Equipment,and Building asset replacement and maintenance types of Internal Service Funds are structured to provide a consistent level of funding for asset and equipment replacement and to ensure sufficient funding is available for the regular maintenance, repair and replacement of the City's vehicles, fixtures, equipment,and buildings in an ongoing manner. Technology and Office Equipment replacement and maintenance Internal Service Funds are structured to provide a consistent level of funding for the replacement of assets and projects, and to appropriately distribute replacement, support,and maintenance costs to departments. The Liability and Workers Compensation Insurance Internal Service Funds are to maintain adequate reserves to pay all valid self-insured claims and insurance deductibles, including those incurred but not reported,in order to keep the insurance funds actuarially sound. Each Internal Service Fund will set recovery charges at rates sufficient to meet all operating expenses, depreciation, and fund balance reserve policy objectives. Long-Term Debt Long-term Financing Debt is typically incurred for capital improvements or special projects that cannot be financed from current revenues, or for large liabilities resulting in significant financial impacts. In principal, long-term debt is to be used only if the debt service requirements do not negatively impact the City's ability to meet future operating,capital, and cash reserve policy requirements. The term for repayment of long-term financing shall not exceed the expected useful life of the project, or extend beyond functionally appropriate payment terms. Revenues The City will encourage a stable revenue system to mitigate the impacts of short-run fluctuations in any one revenue source. Designated and legally restricted tax and revenue funding sources will be accounted for in the appropriate funds. General taxes and revenues not allocated by law or some other contractual agreement to other funds are accounted for in the General Fund. Capital revenues are to be directly accounted for in the appropriate capital project fund,within a designated project. The City typically establishes user charges and fees at levels that recover direct and indirect activity cost of providing a service or product. The City also considers market rates and charges levied by other municipalities of similar size for like services in establishing rates, fees, and charges. As some services have partial cost recovery objectives, cost recovery ratios will vary in accordance with policy objectives. A master schedule of User Fees is reviewed and updated each year to adjust fees to the established level. The City will follow an aggressive policy of collecting local taxes and revenues due to the City through persistent follow-up procedures, and external resources as necessary. 11 CITY OF SARATOGA INTRODUCTION SECTION Unrestricted donations,gifts,and bequests to the City in excess of$5,000 must be brought to Council for approval and acceptance. All restricted donations, grants, gifts and bequests must be submitted to the Council for approval prior to acceptance. Risk Management Policy The City is insured for up to$25 million of general liability,auto,and property damage claims through the Association of Bay Area Government's (ABAG) Pooled Liability Assurance Network (PLAN) Corporation. The City is self-insured for the first $25,000 for general liability and auto claims; property damage after$5,000 and third party auto claims after$10,000. Workers Compensation claims are insured for the first $250,000 of coverage through the City's participation in a Workers Compensation risk pool,known as SHARP (Shared Agency Risk Pool). After the $250,000 limit is met, an excess coverage policy is activated. The excess coverage provides an employer liability limit of $5,000,000 per occurrence, and workers' comp per occurrence limit of $100,000,000. Workers'Compensation claims are managed by a third party administrator. The City's role in managing both its risk management and workers comp programs is to be preventative in nature which is accomplished through careful monitoring of losses, working closely with the third party administrator,and designing and implementing programs to minimize risk and reduce losses. Treasury Management California Government Code Section 53600; City of Saratoga Municipal Code Section 2-20.035; and Section 16.0 of the City of Saratoga Investment Policy require the City Council to annually review and approve the City's Investment Policy. It is the policy of the City of Saratoga to invest public funds in a manner which will provide the maximum security with the highest investment return, while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of funds. The City practices conservative and cautious investment practices through limiting its investments to the State's Local Agency Investment Fund (LAIF). LAIF's extensive professional investment staff and conservative investment practices ensure prudent financial management of the City's fiscal reserves. The Finance Division shall prepare a monthly report to the City Council that has sufficient detail to present the financial condition of the City at month end, the cash and investments balance by fund, and fund balances by fund type. 12 CITY OF SARATOGA INTRODUCTION SECTION FUND BALANCE RESERVE POLICY Prudent financial management dictates that the City reserve a portion of its funds for future use to: maintain fiscal stability; ensure the continued orderly operation of government and provision of services to residents; and to mitigate current and future risks. As a general budget precept,the City Council decides when and whether to appropriate available funds to and from a reserve account. Use of reserve funds must be authorized by either specific direction in the annual budget, or by a separate City Council action unless specifically noted in policy. Responsible fiscal stewardship also requires adequate reserve be maintained for all known liabilities and established City Council and community directed initiatives. In the following Fund Balance/Reserve Policy overviews, the descriptions include identification of the fund type and classification, the purpose of the reserve, minimum and maximum funding goals if appropriate, guidelines on utilization of the reserve and by what authority, and the procedure for funding the reserve initially,on an ongoing basis, or after utilization. Fund Balance and Net Position In 2009, Governmental Accounting Standards Board ("GASB") Statement No. 54 revised fund balance classifications for"Governmental Funds"into five specific classifications of fund balance with the intent to identify the extent to which a specific fund balance reserve is available for appropriation and therefore spendable,or whether the fund balance reserve is constrained by special restrictions. Government Funds for which these new rules apply include: the General Fund, Special Revenue Funds, Capital Project Funds, and Debt Service Funds. For "Non-Governmental Funds", equity classifications are classified as "Net Position" with sub- classifications of Restricted or Unrestricted Net Position. A third component of a Non-Governmental Fund's equity is"Net Investment in Capital Assets,"which for the City refers to the non-monetary portion of equity such as vehicles and equipment, net of depreciation. Non-Governmental Fund types include Proprietary Funds(Enterprise and Internal Service Funds)and Fiduciary Funds(Trust Funds). Currently,the City's non- governmental fund types are limited to Internal Service Funds. Governmental Fund Type Reserve Classifications The Governmental Reserve classifications are defined as follows, including the applicable reserves that fall into the classification: Non-Spendable Fund Balance Represents resources that are inherently non-spendable from the vantage point of the current period. The City does not presently hold Non-Spendable Reserve funds Restricted Fund Balance Represents fund balance that is subject to external enforceable legal restrictions. The City maintains the following restricted fund balances under this designation: General Fund: Environmental Services Fund Balance Reserve Special Revenue Funds: Landscape&Lighting Assessment Districts Fund Balance Debt Service Fund: Library General Obligation Bond Debt Service Fund 13 CITY OF SARATOGA INTRODUCTION SECTION Committed Fund Balance Represents fund balance constrained by limitations the government imposes upon itself at its highest level of decision making and remains binding unless removed in the same manner. The City maintains the following fund balances under this designation: General Fund: Hillside Stability Reserve General Fund: Facility Reserve Capital Improvement Plan Funds: Capital Project Reserves Assigned Fund Balance Represents fund balance identified by Council for an intended use;however as no legal obligations exist, the funds may be re-designated and utilized for another purpose if Council chooses. The City maintains the following General Fund reserves under this designation: General Fund: Future Capital Improvement&Efficiency Project Reserve General Fund: Carryforward Reserve Unassigned Fund Balance Represents funding which may be held for specific types of uses or operational funding/stabilization purposes, but is not yet directed to a specific purpose. Only General Fund reserves can be designated under the"Unassigned"fund balance classification. Other fund types are by nature structured for specific purposes,hence the fund balances are therefore considered"assigned"for that purpose. General Fund: Working Capital Reserve General Fund: Fiscal Stabilization Reserve General Fund: Development Services Reserve General Fund: Other Unassigned Fund Balance Reserve Fund Balance Ratios To ensure the City maintains available working cash flow at all times,the collective total of the General Fund's Unassigned Reserves is to be sustained at a minimum of 20%of General Fund appropriations. General Fund Year-End Allocations After the City's financial records are finalized and audited,with legal obligations and liability reserves funded, revenues in excess of expenditures are closed out to the Other Unassigned Fund Balance Reserve. Funding in excess of the$500,000 that is to remain in the Other Unassigned Fund Balance Reserve will be distributed in the following order: I. Working Capital Reserve interest allocation. 2. Repayment of Fund Balance Reserve loans-back to established levels (e.g. borrowing from the Fiscal Stabilization or Hillside Stability Reserves). 3. Annual contribution of$100,000 to the Hillside Stability Reserve,until reserve balance reaches $1,000,000. 4. Annual contribution of$300,000 to Facilities Replacement Reserve. 5. Remaining funds are allocated to the Future Capital Improvement and Cost Efficiency Fund Balance Reserve. 14 CITY OF SARATOGA INTRODUCTION SECTION GENERAL FUND-FUND BALANCE RESERVE POLICIES Environmental Services Reserve Under the Restricted Fund Balance classification, the Environmental Services Reserve represents revenues collected under a prior funding structure for environmental purposes, and is therefore restricted for use in funding environmental program costs such as clean water programs,street sweeping,and storm drain cleaning services. The Environmental Service Reserve is being utilized through annual budget appropriations of $50,000. The Environmental Services Reserve originated from a one-time funding structural change and therefore will not be replenished when depleted. Hillside Stability Reserve Under the Committed Fund Balance classification, a Hillside Stability Reserve of$1,000,000 is reserved to provide funding for unanticipated or unforeseen emergency or extraordinary costs related to hillside degradation,inclusive of slide prevention and mitigation,slide repair,and associated drainage and roadwork. The reserve is to be increased by$100,000 each fiscal year from General Fund year-end net operations until a$1,000,000 reserve cap is reached. Use of the reserve requires an analysis be prepared and presented to Council for approval,or in the event of a landslide requiring immediate emergency work,the Public Works Director may direct use of up to 10%of the reserve to make emergency repairs and mitigate further damage until Council takes action. Reserve funding is to be used for emergency work which exceeds operational funding provided for in the Operating Budget. Upon use,refunding of the reserve shall again resume at$100,000 each fiscal year until the$1,000,000 reserve cap is reached. Facility Replacement Reserve The Facility Replacement Reserve is established to accrue funding for the major rehabilitation or replacement of City Buildings. Eligible uses of this reserve to finance the construction of critical City facilities include direct funding of public facility improvements, and the servicing of related debt. An initial contribution of $300,000 was established in FY 2012/13 with Council's recommendation to continue funding at this level as available. Annual contributions, reserve goal amount, and utilization shall be determined by Council as the City's economic situation changes. Future Capital Improvements&Efficiency Projects Reserve Under the Assigned Fund Balance classification, the Reserve for Future Capital Improvement &Efficiency Projects shall reserve funding for as yet undefined capital and efficiency improvement projects. Reserve funding is derived from General Fund accumulated net operations(as available)and is therefore considered a "one-time funding source". Funds are held in this reserve account until Council reviews funding requests and approves a use or transfer to a capital project fund. Use of the reserve funding is at the Council's discretion,but typically occurs in conjunction with the annual budget adoption after Council conducts a comprehensive review of capital and efficiency improvement needs. Reserve replenishment is dependent upon net operational savings in subsequent fiscal years. Carryforward Reserve Under the Assigned Fund Balance classification,the Reserve for Carryforwards represents funding held at the end of each fiscal year for critical unexpended operating budget appropriations to be purchased in the following fiscal year. The reserve is reconciled at the end of each fiscal year to both release prior year carryforward funding and reserve current year carryforward funding into the following budget year. 15 CITY OF SARATOGA INTRODUCTION SECTION Staff determines the year-end reserve amount after all fiscal year payments are finalized;the reserve amount is conceptually appropriated by Council each year in the budget adoption resolution. Working Capital Reserves In accordance with the City's cautious and conservative fiscal philosophy, the City's general prevailing financial policy holds that the City should fund daily operations with current resources in order to avoid use of short-term Tax Revenue Anticipation Notes(TRANS). To support this policy a Working Capital Reserve is established to meet cash flow requirements and prevent short-term borrowing,which in turn ensures the continuance of services to the public while also maintaining the City's credit worthiness. To provide adequate working capital,the City shall maintain a minimum reserve of 60 days of the following year's General Fund budget expenditures and up to a maximum reserve amount equal to 90 days of the following year's General Fund budget expenditures. This reserve falls under the Unassigned Fund Balance classification. A Working Capital Reserve of$2,000,000 was established in April 1994. Effective June 30, 2000, interest earnings accrue to the reserve at the end of each fiscal year based on the annual LAIF rate,with the intention to increase the reserve balance amount in proportion to Operating Budget increases. Fiscal Stabilization Reserve Under the Unassigned Fund Balance classification, a Fiscal Stabilization Reserve of $1,500,000 was established to provide temporary financing for budget stabilization caused by fiscal downturns,unanticipated extraordinary expenditures related to a natural disaster or calamity,or from an unexpected liability or funding decreases created by a legislative action. Fiscal stabilization needs may occur from revenue declines(over one or more years)of more than 5%of either property tax, the combined total of other taxes, or General Fund revenues in total, or from unanticipated extraordinary operational increases of more than 5% such as from a natural disaster or unexpected Federal, State,County or Ca1PERS funding changes. Council may utilize funding at budget adoption, by adoption of a budget adjustment resolution during the course of the year, or after a Federal, State, or locally declared emergency. In the event a locally declared emergency takes place,the City Manager has the authority to spend funds until such time as the City Council takes action. Reserve appropriations are to be replenished from year-end net operations, as available, on a priority basis. Development Services Reserve Under the Unassigned Fund Balance classification,the Development Services Reserve provides fiscal stability for the Community Development Department's planning and building programs. Development projects are often multi-year activities in which revenues may be collected in one year, while project expenditures may extend over several years. This reserve represents accumulated planning and building funds from years when revenues exceeded expenditures. The reserve is subsequently utilized to offset excess planning and building program expenditures through annual budget appropriations in the years where revenues are not sufficient, thereby acting as an overall funding stabilizer for multi-year development activities. Use of reserve funding is restricted to 1/3 or the reserve balance in any given fiscal year, with Council approval. Budgeted use of the Development Reserve is to be rescinded if and to the point where development revenues are sufficient to cover General Fund net operations at year-end. Funds are added to the reserve in years where Community Development Department revenues exceed Development expenditures. 16 CITY OF SARATOGA INTRODUCTION SECTION Compensated Absences Reserve Under the Unassigned Fund Balance classification, the Compensated Absences Reserve is established to smooth expenditure fluctuations resulting from the payout of accrued leave to employees at service separation and distribution payouts. Initial reserve funding is to be established at$200,000,with a targeted goal of one- third of the compensated absences liability established at year-end. Reserve funding in excess of one-third of the liability is to be returned to the General Fund Other Unassigned Reserve. Use of the reserve occurs when total annual compensated absences payouts exceed budgeted salary funds. Large payouts decrease the compensated absences liability at year-end, thereby supporting the practice of utilizing the reserve as needed. The reserve may be replenished over a three year period. Year-end reconciling allocations to and from the reserve are approved though Council's budget resolution adoption each fiscal year,with the liability and resulting reserve amounts determined as part of the year-end close process. Council Discretionary Reserve Under the Unassigned Fund Balance classification, the Council Discretionary Reserve represents unspent funds from the Council's annual appropriation. The reserve provides a mechanism to roll forward remaining Council Discretionary Funds as reserve funds are immediately re-appropriated into the following fiscal year. This allows Council the flexibility to take advantage of unforeseen opportunities or needs without the restriction of fiscal year boundaries. Use of the reserve funding requires Council approval. The reserve exists at year-end only when there are remaining unspent Council Discretionary funds at the end of the fiscal year. Other Unassigned Reserve Other Unassigned Reserve represents accumulated net operations not yet allocated to other fund balance reserves, and by definition, fall into the Unassigned Fund Balance classification. In the General Fund, a baseline of $500,000 of accumulated net operations is to remain in the Other Unassigned Fund Balance Reserve at year end to provide a buffer for unanticipated operational shortfalls and unforeseen needs. Other fund's accumulated net operations are typically accounted for in an undefined reserve account — typically just called fund balance reserve. As the other types of funds are structured for specific uses or commitments,their fund balance already has a directed purpose,whereas the General Fund is used for multiple operational purposes thereby requiring a distinction of purpose for each reserve. Council may utilize reserve funding at budget adoption or by adoption of a budget adjustment resolution during the course of the year. Reserve funding is replenished from year-end net operations,as available. SPECIAL REVENUE FUND-FUND BALANCE RESERVE POLICIES Landscape&Lighting Assessment District Funds Assessment District Funds are Special Revenue Funds, which is a type of governmental fund. As a governmental fund, the Landscape and Lighting Assessment District Funds comply with GASB 54 fund balance classifications, and by nature of the fund's purpose, fund balance reserves are classified as restricted reserves. Special Revenue Funds account for and report the proceeds of specific revenue sources that are restricted or committed to specified purposes (other than for debt service or capital projects.) For the City, Landscape & Lighting District Special Revenue Funds were established to account for each individual assessment district; thereby each fund has its own separate fund balance reserve. Each district's fund balance reserve should be sufficient to provide working capital to cover operational expenses through the first half of assessment receipts in January, therefore equitable to approximately one- half of a district's annual expenditure budget. The second half of receipts are received in June. Some districts 17 CITY OF SARATOGA INTRODUCTION SECTION may include capital improvement projects in addition to ongoing regular maintenance resulting in fund balance increasing over the years to accumulate sufficient resources for the improvement projects. As each district's situation is different, a district's maximum fund balance shall be determined by the Public Works Director. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. DEBT SERVICE FUND—FUND BALANCE RESERVE POLICIES Library General Obligation(GO)Bond Debt Fund The Library General Obligation(GO)Bond Debt Fund is a Debt Service Fund established to account for the financial resources accumulated for principal, interest, and cost of issuance expenditures associated with the Library Bond Debt. As Debt Service Funds are a governmental fund type, the fund reserves fall under the GASB 54 fund balance classifications. Debt Service Fund reserves are classified as Restricted as funding can only be spent for specific purposes as stipulated by the bond covenants. The Library GO Bond Debt Fund was established to ensure receipts are tracked separately, and funding is available for the GO Bond debt service requirements. At a minimum,the year-end fund balance reserve shall be sufficient to provide working capital to cover the semi-annual principal and interest debt payment due on August 1St as GO Bond tax receipts are received after the 1st debt payment is due. December receipts provide for the February payment. As bond assessments are collected as a percentage of property values, reserves should provide sufficient funding to compensate for tax fluctuations. The fund's reserve maximum should be no more than one-year of budgeted annual expenditures. The reserve balance is increased(or reduced)through establishing assessment rates at more(or less)than the semi-annual payments and bond services require. Therefore,replenishment(or use)of the reserve is approved by Council through budget adoption and implemented through an increased(or reduced)assessment rate as a result of the fund's net operations. CAPITAL IMPROVEMENT PROJECT FUNDS—FUND BALANCE RESERVE POLICIES Overview Capital Improvement Project(CIP)Funds account for the acquisition and maintenance of major capital assets other than those financed through special assessments or enterprise funds. Capital Project Funds are a type of governmental fund and therefore comply with GASB 54 fund balance classifications. As Council directs appropriated funding be spent for specific improvement projects,the Capital Project Fund Balance Reserves are classified as Committed Fund Balance. Budgeted capital improvement project funding is determined by the scope of work approved by Council,and remains assigned for that use until completed or reassigned by Council. Fund Balance amounts represent the total remaining funds in the individual projects at year-end. As Fund Balance amounts are determined by the point of project completion at year-end they cannot be standardized for minimum or maximum amounts. Fund Balance is re-appropriated to the capital project in the following fiscal year for the work to be completed. Street Improvement Projects Funds Street Improvement Project Funds provide for a safe and functional roadway and pedestrian street system. Each Street Improvement Fund(CIP Street Fund, CIP Grant Fund, and Gas Tax Fund)has multiple projects which roll up into the overall fund balances,but remain designated for use by project. 18 CITY OF SARATOGA INTRODUCTION SECTION The CIP Street Fund receives annual funding from fees, reimbursements, contributions, and transfers from other funds. The CIP Grant Fund receives federal, state, and local grants which vary in source and amount from year-to-year. On occasion,a private grant may be received. Typically,CIP Grant Funds have a negative fund balance as project work is conducted before reimbursement is received. Gas Tax Funds represent annual Highway User Tax and Transportation Congestion Relief revenue allocations that are to be accounted for separately and are subject to State audits. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. Park&Trail Improvement Project Funds Park & Trail Improvement Project Funds provide for capital improvements to the City's neighborhood and city parks and plaza, the sport fields, bike and pedestrian trails, and open space areas throughout the City. Each of the Park& Trail Improvement Funds (CIP Park& Trail Fund, CIP Tree Fund, and the CIP Park& Trail Grant Fund)have multiple projects which roll up into the overall fund balances,but remain designated for use by project. The CIP Park & Trail Fund receives annual funding from subventions, occasional Park-in-Lieu fees, reimbursements and contributions, and transfers in from other funds. The Tree Fund receives revenue from tree fines and transfers from other funds upon Council direction. The CIP Grant Fund receives federal, state, local and occasional private grants which vary in source and amount from year-to-year. Typically,CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. Facility Improvement Funds Facility Improvement Project Funds provide for capital maintenance and improvements of the City-owned buildings and structures throughout the City. Each of the Facility Improvement Funds (CIP Facilities Fund and the Facility Grant Fund) have multiple projects which roll up into the overall fund balances,but remain designated for use by project. The CII'Facilities Fund receives annual funding from a General Fund transfer,from Theater Ticket Surcharge Fees,and from reimbursements and contributions. The Facility Grant Fund receives revenue from grants that vary in amount from year-to-year. Typically, CIP Grant Funds have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. Administrative&Technology Improvement Funds Administrative&Technology Improvement Project Funds provide for major capital expenditures to improve or enhance administrative, technology, and operational systems, processes, or functions. Each of the Administrative & Technology Improvement Funds (CIP Admin & Tech Improvement Fund and the Admin &Tech Grant Fund)have multiple projects which roll up into the overall fund balances,but remain designated for use by individual project. 19 CITY OF SARATOGA INTRODUCTION SECTION The CIP Administrative & Technology Improvement Fund typically receives funding from a General Fund transfer as administrative and technology improvement focused grants are limited. If grants are received, projects typically have a negative fund balance as project work is conducted beforehand and then reimbursed from expenditure invoices. Year end fund balance represents the remaining unexpended project funds (net of any negative CIP Grant Fund Balance) which are subsequently re-appropriated by Council into the following budget year through budget adoption. INTERNAL SERVICE FUNDS—FUND BALANCE RESERVE POLICIES Overview Internal Service Funds are established to provide centralized cost centers for shared expenses and services in order to efficiently track costs and manage resources. Costs are then allocated back to the operational programs based on usage to more accurately determine cost of services. The City's Internal Service Funds include the two Insurance funds: Risk Management and Workers Compensation,four Service/Support funds: Office Support,IT Services,Vehicle&Equipment Maintenance, and Building Maintenance Funds, and three Equipment Replacement funds: the Vehicle & Equipment Replacement Fund,the Office Technology Equipment Replacement Fund,and the Building FF&E(Furniture, Fixture, &Equipment)Replacement Fund. As each fund is accounted for as a separate entity, operational revenues less expenditures result in either a positive or negative fund balance at any given point in time—Internal Service Funds are similar to the separate checking and saving accounts a person may use for different purposes. At year end, each fund's net balance is represented as the "Fund Balance Reserve". The intent of the Internal Service Funds Reserves is to hold appropriate levels of reserves to support cash flow needs and minimize interfund loans, not to accumulate funds in excess of expected ongoing operational costs. Reserve levels are determined by the specific operational needs of the program,but typically will fall within 25—50%of annual budgeted expenditures. Internal Service Funds are a type of Proprietary Fund; therefore GASB 54 fund balance classification (for Governmental Fund types) does not apply. Instead, Internal Service Fund's financial statement reports are presented similar to private-sector businesses and use"Restricted"and"Unrestricted Net Position"to define net operational balances(equity/fund balance reserves). Unrestricted Net Position allows reserve funding to be used(with Council approval)within the general scope of the fund's purpose. Restricted Net Position reserves are limited to a specific use,narrower than the stated purpose of the fund. For example, grant funding provided for a defined use, as in remaining funds from a Risk Management Training Grant within the Liability/Risk Management Fund, must be used for qualified training purposes. Most Internal Service Funds reserves are held in the Unrestricted Net Position category. Liability/Risk Management Reserve Fund The Liability/Risk Management Fund's Unrestricted Net Position reserve supports cash flow needs and minimizes interfund loans. Appropriate levels are maintained through service chargebacks to the programs, based on operational risk factors. Most claims are covered under the insurance risk pool JPA,the City is self- insured for up to$25,000 per General Liability and City Vehicle Auto Liability occurrence, and up to$5,000 for Property Damage and 3rd Party Auto Liability. Non-covered claims are paid fully by the City. The Liability/Risk Management program receives funding from allocations charged to covered departments, from grant funding, and from claim reimbursements. At year end, unspent funding flows into Unrestricted Net Position or Restricted Net Position for specific purposes. Requests for use of reserve balance are approved 20 CITY OF SARATOGA INTRODUCTION SECTION by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Workers Compensation Fund The Workers Compensation Fund's Unrestricted Net Position reserve supports cash flow needs and minimizes interfund loans. Appropriate levels are maintained through service chargebacks to the programs, based on operational risk factors. The purpose of the Workers'Compensation program is to provide insurance benefit coverage for employee work-related illness and/or injuries through its membership in a shared risk pool. The risk pool provides coverage up to $250,000, and excess insurance provides coverage over this amount up to $10 million. The Workers Compensation program receives funding from allocations charged to covered departments,from grant funding, and from claim reimbursements. At year end, unspent funding flows into Unrestricted Net Position, or Restricted Net Position for grant funding. Requests for use of the reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Office Support Fund The Office Support program provides a centralized cost center for administrative office support expenses, including photocopy machine leases, postage machines, shared office machines, and the associated maintenance and repair services,postage,paper,and copier supplies. For efficiency, office support costs are managed collectively and charged back to departmental programs on a use-basis allocation. Accumulated net operations are held in the Office Support Fund for working capital cash flow. The reserve is funded from the allocations charged to covered departments. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of excess reserve balance are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Information Technology Services Fund Information Technology Services provide for the delivery of technology based services throughout the City's operations, including maintenance of the City's information systems and infrastructure, program implementation, streaming video, internet, landline, and wireless communications systems, cloud based technology, and support of all existing information technology as well as new technology initiatives. For efficiency,information technology costs are managed collectively and charged back to departmental programs on a service-based allocation to fund the program. Funding for the program comes from these allocations charged to covered departments. At year end,unspent funding flows into Unrestricted Net Position. Accumulated net operations are held in the Information Technology Services Fund for working capital cash flow. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Vehicle&Equipment Maintenance Fund The Vehicle & Equipment Maintenance program provides for the fuel, maintenance, and servicing of the City's fleet and major equipment to ensure all vehicles and equipment comply with manufacturer's recommendations and safety requirements. To fund the program,vehicle&equipment replacement costs are charged back to the departmental programs based on assigned usage. Accumulated net operations are held in the Vehicle & Equipment Maintenance Fund for working capital cash flow. At year end, unspent funding flows into Unrestricted Net Position. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved 21 CITY OF SARATOGA INTRODUCTION SECTION budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. Building Maintenance Fund The Building Maintenance program provides for the custodial, maintenance, and non-major repairs and building improvement services for all facilities at the Civic Center, Prospect Center, and Museum Park. Additionally,the program supports the maintenance and repair needs for the tenants of City leased buildings as defined in the lease agreements. To fund the program, total costs are allocated back to departmental programs primarily based on building space usage. General and public use is allocated to the Non- Departmental program. Accumulated net operations are held in the Building Maintenance Fund for working capital cash flow. Funding comes from the allocations charged to covered departments. At year end,unspent funding flows into Unrestricted Net Position. Requests for use of the reserve are approved by Council through budget adoption or by establishing chargeback funding levels higher or lower than budgeted expenditures. The reserve is replenished from the Fund's net operations in subsequent years. Vehicle&Equipment Replacement Reserve The Vehicle and Equipment Replacement Fund Balance Reserve accounts for accumulated funding over an asset's lifespan,to be used for the replacement of the vehicle or equipment at the end of its useful life. Initial purchases are paid for through a department's operational budget. If the purchased item is for ongoing use, the Vehicle&Equipment Replacement program appropriates an annual allocation for the replacement of the vehicles and equipment based on the asset's cost and years of life. Final determination for replacement of the asset is determined through an analysis of whether the cost of maintenance equals or exceeds the cost of replacing the asset. The reserve is funded from allocations charged to covered departments and represents accumulated funding, less amounts expended for asset replacement. At year end, unspent funding is held in Unrestricted Net Position. The reserve is to be maintained at a level sufficient to provide replacement funding of vehicles and equipment in accordance with replacement schedules. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution throughout the year. The reserve is replenished from the Fund's net operations in subsequent years. Office Technology Equipment Replacement Fund The Office Technology Equipment Replacement Fund accounts for accumulated funding over an asset's lifespan to be used for the replacement of office technology based equipment such as desktop computers and monitors,laptops and tablets,network infrastructure,and various other related equipment. Replacement costs are charged back to the departments based on assigned equipment costs. Initial purchases are paid for through a department's operational budget. If the purchased item is for ongoing use, the Office Equipment Replacement program appropriates an annual allocation for the replacement of the equipment based on the asset's cost and years of life. The reserve represents accumulated funding, less amounts expended for replacements. The reserve shall be funded to provide replacement funding in accordance with replacement schedules. Funding for the reserve comes from the allocations charged to covered departments. Requests for use of the reserve are approved by Council through budget adoption or by a Council approved budget adjustment resolution during the year. The reserve is replenished from the Fund's net operations in subsequent years. 22 CITY OF SARATOGA INTRODUCTION SECTION Facility Furniture,Fixtures&Equipment(FFE)Replacement Fund The Facility FF&E Fund accumulates funding over an asset's lifespan to be used for the replacement of furniture — such as tables, chairs, and cubicle partitions; for fixtures - such as kitchen appliances, sound equipment, lighting, for equipment - such as HVAC units, boilers, and generators; and for facility infrastructure —such as roof,door,window,and floor/carpeting replacement. Initial purchases for new assets may be paid for through the Operating Budget or through the Capital Budget. Annual replacement charges are then charged-back to the supported department programs with full replacement funding to be accumulated over the asset's estimated lifetime. Final determination for replacement of the asset is determined through an analysis of whether the cost of maintenance equals or exceeds the cost of replacing the asset. The reserve is intended to be maintained at a level sufficient to provide replacement funding in accordance with replacement schedules. Requests for use of the accumulated reserve funding are approved by Council through budget adoption,or, if an unplanned situation occurs,by a Council approved budget adjustment resolution throughout the year. The reserve is replenished by replacement charge allocations in subsequent years. 23 CITY OF SARATOGA INTRODUCTION SECTION o., 24 CITY OF SARATOGA INTRODUCTION SECTION CIP PROJECT PROCESS POLICY This procedural policy defines how a project moves through the CIP Budget Funding process: from the initial project idea,through project development,nomination, and project approval process,and if successful, into the Capital Budget as a funded project. The CIP project development stage of the policy takes different tracks,depending upon whether the project idea is staff driven or Council nominated. These two paths are discussed separately below,until the tracks converge for CIP project assessment preparation. STAFF PROJECT DEVELOPMENT 1. CIP Project Initiation As a function of staff s day-to-day work, infrastructure improvements and large-scale repairs and maintenance are identified as potential capital improvement projects. These are often highly-visible tangible public assets such as street repaving, or park and trail improvements. However,many CIP projects are less noticeable, including facility roof repairs, tree planting, or ADA enhancements. Projects may also be administrative or technology improvements, and hence invisible to the general public, such as code updates/revisions,process improvements, software implementations,or economic vitality programs. Staff is to discuss the CIP project idea with the appropriate staff or City Manager for feedback and refinement. Ultimately, projects need clearly defined boundaries to identify project requirements, specifications, and resources. While this is not always feasible in the initial stages of project development, the understanding that a project will eventually require a clear and specific scope will encourage better preparation for discussing the project idea and moving it through the nomination process. After receiving initial approval, staff moves into the idea development stage. 2. Idea Development To move the idea forward, staff will need to analyze and articulate the project's scope, political impacts, priority factors,resource requirements,and any other relevant considerations. a. Project Scope — Scope may include the description, project size and location parameters, project purpose, and goals or deliverables, such as products, services or results. Project justifications and assumptions should support the project's purpose and definition,and may include cost-benefit analysis, risk assessments, funding availability, or even community desirability factors. The scope should clearly state if a project is to be funded and/or completed in phases rather than as a singular body of work. If the project is ongoing infrastructure maintenance or a program project, this too should also be clearly noted. In some cases,project scope may be defined by exclusions—statements about what the project will not accomplish or produce. Additionally, constraints or restrictions may identify project limitations. Project Scope defines a commitment to produce a body of work or end-product with the resources provided under the stated assumptions. The written scope helps to manage expectations and provide clarity to the involved parties, reduce confusion and failure, prevent scope creep, and provide transparency to the community. 25 CITY OF SARATOGA INTRODUCTION SECTION b. Political Considerations - Knowledge of historical information, which attests to the necessity of Council/staff communication is of vital importance in project development. Determine whether this project has come up for consideration before,or why was it not completed previously. Are there lessons to be learned from a past project proposal? Another consideration includes knowing whether a project might be controversial. Is there a segment of the community strongly opposed to,or strongly supportive of this specific project? Will this project prompt demand for further funding or resources? Have similar projects been completed in another part of the city? Determine why this project should be considered a priority over others, and whether the project's cost or benefits would be supported by the community. c. Priority Factors - Project priority is an important consideration in the CIP approval decision factor. Council's role is to determine which projects are of higher priority than others since there will never be enough money or resources to do every project. Decision criteria may include factors such as: Health and Safety Issues Imminent failure of structure/system Short-term cost of repair vs. long-term cost of replacement Availability of external or dedicated funding Federal or State mandates Business or community support Impacts if project is not completed A project's priority is also affected by the severity of the criteria. For instance,a project that falls under the "Imminent Failure of Structure/System" criteria may be an extremely dangerous situation in need of immediate repair, or low danger of minor importance and simply remedied by removal. Another example would occur with Federal or State mandated projects. There may be little impact as to whether the mandate is met, or there may be severe fines for lack of timely completion. As a result, project priority is based on the overall assessment of the circumstances; many factors contribute to priority decisions and Council cannot rely upon a clear hierarchical order upon which to base their decisions. d. Project Resources-In the City's project development discussions,resources typically refer to financial funding. However, resources may also refer to staff time, equipment and materials, community/stakeholder participation or support, space requirements, information technology services, or some other type of support or contribution. Funding plays a critical role in project development. In many cases, lower priority projects may be approved ahead of higher priority projects simply because there is designated funding available for the lower priority projects. The ability to bring designated funding(such as a grant award)with a project proposal greatly increases the likelihood that the proposed project is approved. Overall, projects that request undesignated Capital Project Reserve funding are more competitive due to funding limitations and the number of projects competing for the same pot of funds. An additional component of project resource considerations are the unstated resources(identified above) required in project construction or implementation. For instance, staff time is limited and time spent working on one project prevents staff time being spent on another project. Project timing and staff time requirements are therefore an important component of the project that Council may wish to review. 26 CITY OF SARATOGA INTRODUCTION SECTION e. Other Considerations-There are numerous other factors not mentioned above that are also taken into consideration when assessing a project idea. For example, can the City afford the ongoing operating budget increases to maintain or implement the project? Does the project contribute toward economic vitality? Are there environmental concerns? Does it enhance the community's art,education,or cultural resources? Does the project provide operational efficiencies or cost savings? Are there risk management or legal liability issues? Does this project require development be staged in phases? Is there strong community interest in this project? Each project will differ,meaning analysis is specific to the circumstances, and diligent research and thought should be put into developing project scope and justification. In summary, the overall goal of idea development is to identify, quantify, and assess the project comprehensively. This effort is intended to ensure that a proposed project is well-thought-out, developed, and articulated thereby enabling the City Manager and Council to make educated and rational decisions. 3. City Manager Approval Staff is to propose the project idea to the City Manager for approval. If approved,the project is moved onto the CIP Project Candidate List. Staff is to notify the Administrative Services Director of the project's approval and provide pertinent project information. Staff will prepare written narratives with project scope,justification,fiscal impacts,cost estimates,timelines, etc. as necessary for Council Retreat assessment package. City Council Project Development Council Members are often the recipients of residents' suggestions for capital project work. Depending on the topic, Council Members can take these opportunities to: 1)educate the residents on why a project may not be feasible; or 2)provide residents with information on how to contact City staff with their requests to determine feasibility;or 3)Council may support the project suggestion and decide to act as a proponent for the project by guiding it through the Capital Project Nomination process: 1. Nomination-To move a project idea onto the CIP Candidate List,a Council Member is to propose the idea to fellow Council Members at the end of a City Council Meeting during the Council Items session and request that it be put on the CIP Candidate List for review during the next upcoming CIP budget cycle. The deadline for Council project nominations is the last City Council meeting in December. 2. Idea Concurrence-A second Council Member must concur with the request to move the project idea onto the Capital Project Candidate List. 3. Follow-up-A nomination to the Capital Project Candidate List is to be recorded in the City Council minutes, and acted upon as a follow-up item for staff to complete Candidate List step requirements. Staff will prepare written narratives with project scope,justification,fiscal impacts,cost estimates,timelines,etc.as necessary for Council Retreat assessment package. CIP Project Assessment 1. Assessment Package In preparation for the annual Capital Project Assessment, Finance will consolidate the CIP Project Candidates, along with proposed changes to current CIP projects, and the current year's CIP Unfunded Project List into an assessment package for Council's review. The Capital Project Assessment review provides a forum to assess all projects at one time. These assessment package will include: 27 CITY OF SARATOGA INTRODUCTION SECTION A review of available funding Existing projects in the current year's CIP Proposed changes to existing projects The current CIP Unfunded List Proposed changes to projects on the CIP Unfunded List New projects on the CIP Candidate List Review of requests in conjunction with funding sources 2. Council Retreat The Capital Project Assessment is to be held annually, prior to the start of the budget development cycle, typically at the Council Retreat Meeting that occurs in late January or early February. During the assessment review, Council will review available funding and all project requests. In their review,Council may request revisions to a project's scope,funding,or other component. However, changes that redefine a proposed project must be Council's consensus direction. As projects are assessed, they are either: Rejected Accepted,or Modified and Accepted At the conclusion of the assessment review, Council will prioritize accepted projects and designate project funding. Projects placed on the Funded List will be brought forward to the upcoming Budget Study Session. The remainder will be placed on the CIP Unfunded Project List. NOTE: Unsuccessful project ideas may be nominated for another attempt to become an approved project in the following year(s),but must again go through the project development and assessment process. 3. Budget Study Session Updated CIP funding availability and project revisions will be reviewed a final time with Council. Council will conduct a final assessment and provide consensus direction to staff for inclusion in the upcoming Proposed Budget Hearing to be held in May. CIP Project Funding 1. Proposed Budget Hearing The final Proposed Capital Budget with the recommended project funding will be brought to the City Council Budget Public Hearing in May for final review. New funded projects will be presented,along with summary level budget information. Council is to provide any final comments or direction for budget adoption. 2. Budget Adoption The Operating and Capital Budgets are brought to Council in June with all final direction incorporated into the final summaries. Council is requested to adopt the budget at this time,with budget funding effective on July 1St of that year. Funding Process Follow-up Approved and funded CIP projects will be incorporated into the Proposed Capital Budget. 28 CITY OF SARATOGA INTRODUCTION SECTION Projects that do not receive funding allocations in the current year but are scheduled for adoption in a future year within the five year CIP will be incorporated into the Proposed Capital Budget summary schedules, but are not included in the current funding allocations or issued individual project sheets. Scheduled projects will be reviewed as a proposed project in the following Capital Budget development cycle. Capital Projects which were approved but not funded or scheduled in future years,will be included on the new CIP Unfunded List, and published as a list in the Capital Budget document. Projects which were not approved will not be displayed in the Capital Budget document. These unsuccessful project ideas may be nominated for another attempt to become an approved project in the following year(s) in their current proposed form, or with modifications, but they must again compete through the project development and comprehensive assessment process. 29 CITY OF SARATOGA INTRODUCTION SECTION o 30 1 u �A.�.J L SARATOGA CITY COUNCIL ` �CIFOik"� MEETING DATE: January 23, 2015 DEPARTMENT: Public Works PREPARED BY: John Cherbone, Public Works Director SUBJECT: Roadway Conditions & Pavement Management Program RECOMMENDED ACTION: Receive report and provide direction to staff regarding the City's Roadway Conditions & Pavement Management Program BACKGROUND: MTC Pavement Management System Pavement conditions in the City are tracked by Public Works using both visual inspection and a computer program titled the MTC Pavement Management System (PMS). This program is administered, and continually being improved by the Metropolitan Transportation Commission. The Pavement Management System for the City of Saratoga provides a pavement network inventory, network conditions, maintenance recommendations, and forecasting. This program combined with resident requests, engineering judgment, and available budget determines the year-to-year priorities of streets to be addressed by the City's annual Pavement Management Program. The City's street network is inspected every two to three years. The grading system used to determine a pavement's condition is a numerical scale from zero to one hundred(0-100), with 0 being completely failed and 100 indicating a new street. This scale is known as the Pavement Condition Index (PCI). PCI's for the City's pavement network are based on a distress rating calculated by an algorithm the MTC modified from the Army Corps of Engineers. For the purposes of mapping and general summarization of condition, the classifications are simplified to four categories: PCI 100-70 Pavements which have little or no distress. A pavement in this category may be described as "Excellent" or"Very Good". 70-50 Pavements which have a significant level of distress. A pavement in this category may be described as "Good" or"Fair". 35 50-25 Pavements which have major distress. A pavement in this category may be described as "Fair" or"Poor". 25-0 Pavements which have extensive amounts of distress. A pavement in this category may be described as "Very Poor" or"Failed". The Metropolitan Transportation Commission's recommended deterioration curve takes into account the nonlinear behavior of asphalt roadway surface deterioration. A typical pavement section will deteriorate approximately 40% in the first 75% of its lifespan. The same pavement section, if untreated, will experience another 40%reduction in overall quality in only the next 12% of its lifespan. This amounts to an equal level of deterioration in only 1/6 the time. A typical street section has a useable life of approximately 20 years, if left untreated. Saratoga's Pavement Network The pavement network within the City of Saratoga is approximately 141 centerline miles or approximately 1 square mile of paved area with a replacement value of approximately$125 million. The network is composed of approximately 94 miles of residential streets, 24 miles of collector streets, and 24 miles of arterial streets. Residential streets comprise 64% of the network. The overall Pavement Condition Index (PCI) value of the City's pavement network is classified as "Good" with a network average of 69. The average PCI by street classification is as follows: CLASSIFICATION AVERAGE PCI Arterial 80 Collector 68 Residential 66 TOTAL NETWORK 69 The current PCI of 69 is 5 points lower than what was reported in the 2011 network survey. The drop can be attributed to a combination of reduced funding during the recession and a change in engineering consultants performing the survey. The lower PCI values for residential and collector streets compared with arterial streets can be attributed to Federal and State grant funding restricted to arterials only. Pavement Network Funding &PCI Level Pavement network funding and PCI level are directly connected, but can be used in different ways to develop policy. The City can set an annual budget that will support a particular level of PCI or set a PCI goal that can be obtained over time. The PCI goal can be set for the whole network or individual street classifications. The City's pavement network has a reported$24 million of deferred maintenance. If deferred maintenance was eliminated the City would have PCI network level of 84. 36 Currently the City expends over$1 million a year on maintenance of the street system; however the net amount available for resurfacing was significantly reduced during the recession to accommodate other street system related expenditures. Those expenditures included traffic light repairs, striping and signage, curb & gutter repairs, street materials, and miscellaneous repairs. In order to keep the City's PCI from further decline, staff proposes the following CII'project budget for street maintenance in FY 2015/16. The current fiscal year budget is shown for comparison. FY 2015/16 FY 2014/15 Pavement Network Resurfacing: $1,000,000* $650,000 Pavement Network Reconstruction: $300,000 $300,000 Annual Curb & Gutter Repair: $50,000 $0 Roadway Maintenance &Repair: $375,000** $0 *Approximately 20%will be expended on preventative maintenance (streets with a PCI level in the 70's). **Includes failed street repairs, shoulder work, signage and striping, traffic light repairs, and miscellaneous repairs Isolating resurfacing into a separate CIP project will provide a clearer understanding of the amount invested in pavement maintenance and its correlation to the PCI value of the City's street network. The following revision to the Council's financial policy related to street resurfacing is also be being recommended to add clarity on the use of funds and to establish a performance target: The CIP Street Resurfacing/Pavement Management pnegra rp oiect has an established minimum annual funding goal of$1,000,000, with Gas Tax Revenues and Road Impact Fees as dedicated funding sources. Project expenditures are restricted to street resurfacing/rehabilitation work in support of attaining an average 70 PCI rating for Saratoga's streets. FISCAL STATEMENT: Transfers from the General Fund reserve for street resurfacing and maintenance in FY 2015/16 would increase over the current year budget by$775,000. FOLLOW UP ACTION: Staff will incorporate Council's direction in the upcoming FY 2015/16 budget process. 37 1 ,J SARgT SARATOGA CITY COUNCIL 1e56 MEETING DATE: January 23, 2015 DEPARTMENT: Finance Department PREPARED BY: Anthony McFarlane, Finance Manager SUBJECT: 5-Year Capital Improvement Plan Development RECOMMENDED ACTION: Review and provide direction on the proposed projects to be included in the development of the 5-Year Capital Improvement Plan effective Fiscal Year 2015/16 BACKGROUND: Capital Improvement Plan (CIP) projects, such as infrastructure improvements or large-scale repairs, are either developed as a function of staff's day-to-day operations, or as proposals from members of Council. In either case,potential projects need a comprehensive assessment in order to determine priorities, scope, resources and any other considerations. Staff will be presenting the following for Council consideration; Schedule of Currently Funded CIP Projects Schedule of proposed changes to Currently Funded CIP Projects Schedule of current Unfunded and Unscheduled CIP Schedule of Proposed CIP Projects Schedule of Funding Availability Council will be requested to review and prioritize proposals to determine which projects will be brought forward to the Council Budget Study Session for funding consideration in the FY 2015/16 Capital Budget. ATTACHMENTS: Attachments will be made available to Council at the January 21, 2015 Council Meeting. 38 Schedule 1 CIP Funding Availability FY 2015/16 Future Capital Project Reserve Total FY 2015/16 Available Funding 2,217,896 Priority CIP Projects: 9141-001 (Annual Sidewalk Repairs) (50,000) 9141-002 (Annual Storm Drain) (50,000) 9121-001 (Roadway Safety&TC) (50,000) 9491-001 (Risk Mgmt ADA Mitigation) (50,000) Available Funding for CIP 2,017,896 Proposed Changes to Current Projects 9122-008 (Big Basin Way Turnaround) 50,000 9142-016(Saratoga Hills Storm Drain Improvements) 10,000 9322-010 (Civic Theater Master Plan Improvements) 64,900 Available Funding for CIP 2,142,796 Proposed Funding Requests Current Projects 9277-001 (Saratoga Creek Trail- Design &Environmental) (80,000) Proposed Projects CIP Candidate List (1,457,000) Available Funding for CIP 605,796 Revision Date: 1/21/2015 Schedule 2 CIP-Current Project List FY 2015/16-2019/20 Prior Estimated Roll Planned Over Project Project No. Project Description Changes Requested Years FY 2015/16 FY 2016/17 FY 2017/18 1 FY 2018/19 FY 2019/20 Cost COUNCIL NOMINATED PROJECTS TOTAL COUNCIL NOMINATED PROJECTS - - - - -STREETS - PROJECTS Street Repair&Resurfacing Projects 11 9111-001 JAnnual Street Resurfacing 18,441,055 1 1,146,722 1,000,000 1 1,000,000 1 1,000,000 1 1,000,000 Roadway Safety Improvements 2 9121-001 Roadway Safety&Traffic Calming 478,974 62,381 50,000 50,000 50,000 50,000 3 9121-003 CDBG-ADA Signal Lights 61,759 9,578 - - - 4 9122-001 Highway 9 Safety Improvements-Phase II 1,477,399 156,350 5 9122-004 Highway 9 Safety Improvements-Phase III 525,297 24,514 6 9122-005 Highway 9 Safety Improvements-Phase IV - 1,000,000 o•• ••• 7 9122-006 Prospect/Saratoga OBAG Improvements - 4,750,825 81 9122-007 Citywide Signal Upgrade Project Phase II 5,000 495,000 ••• 9122-008 Big Basin Way Turn Around Reduce$50K and remove from list Street Landscape&Beautification 91 9133-001 IFruitvale Avenue Median 1 143,894 101 9138-001 IVillage LED Streetlights 1 431,626 17,637 Sidewalks,Curbs&Gutters 11 9141-001 Annual Sidewalk Repairs 435,984 96,702 50,000 50,000 50,000 50,000 12 9141-002 Annual Storm Drain Repairs 321,570 101,942 50,000 50,000 50,000 50,000 13 9142-004 Village S/W&Pedestrian Enhancemts 1,128,735 114,875 - - - - • 14 9142-005 Saratoga Avenue Sidewalk 210,292 3,552 15 9142-011 Village SW/C/G Phase II Construction 1,118,463 138 .• 16 9142-013 Quito Road/Paseo Olivos Storm Drain - 40,000 ••• 17 9142-014 OBAG SCG Sidewalk Repair 183,990 ••• 18 9142-015 EI Camino Grande Storm Drain Pump 150,000 • ••• 9142-016 Saratoga Hills Storm Drain Improvements Reduce$10K and remove from project list due to change - in scope and propose new project 19 9142-017 LT Trash Plan Storm Drain Improvements 30,000 1 ••• 20 9142-018 Wildcat Creek Outfall Repair - 40,000 •• Bridges&Retaining Walls 211 9152-001 14th Street Bridge 1,078 585,922 •• 221 9152-002 lQuito Road Bridges 917,492 97,897 Utility Undergrounding 231 9171-001 IRule 20A Fund Project 1241 9171-002 lQuito Road Undergrounding Project I 98,744 Revision Date: 1/21/2015 Schedule 2 CIP-Current Project List FY 2015/16-2019/20 Prior Estimated Roll Planned Over Project Project No. Project Description Changes Requested Years FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Cost TOTAL STREETS PROJECTS 15,698,618 9,206,769 1,150,000 1,150,000 1,150,000 1,150,000 :1. City Wide 25 9211-001 Annual Park&Trail Repairs 286,987 6,387 26 9211-002 CityWide Tree Replanting 229,910 39,895 27 9211-003 Playground Safety Improvements 44,644 5,356 1 oil 28 9212-001 Tree Dedication Program 7,500 21,125 29 9212-002 SMSCF Tree Donation Fund - 1,750 Park 30 9213-001 AB 8939 Beverage Container Grant 20,305 10,065 31 9222-001 Hakone Gardens Match Contribution - 400,000 32 9222-004 Hakone Gardens UMH Foundation - 125,000 oil 33 9226-001 Quarry Park Master Plan Implementation 105,092 468,984 1 . 34 9226-002 Quarry Park/ROW/Property Acquisition 100,000 H oil Trail 35 9274-001 Joe's Trail at Saratoga De Anza 21011,163 202,822 36 9274-002 Guava Ct/Fredericksburg Entrance - 345,880 Increase$80K due to change in scope as a result of 12,000 107,000 oil environmental review and application for additional grant 37 9277-001 Village Creek Trail-Design&Environ funding 38 9277-002 j Village Creek Overlook 480 26,520 oil 39 9277-003 1 Village Creek Trail-Construction 50,000 1 oil TOTAL PARKS&TRAILS PROJECTS 2,718,081 1,910,784 - FhL City Wide 40 1 9312-002 Electronic Door Lock System-Phase II 84,512 63,611 rA 411 9312-002 1 Emergency Power Backup 90,030 31,400 Civic Center Improvements 42 9321-014 Master Switch Gear-Electrical Board 96,357 43,643 1 oil 9322-010 Civic Theater Master Plan Improvements Reduce$250K and remove project from list due to change - - in facility improvements budget from CIP to ISF and identify priority improvements as CIP Candidates 43 9331-002 Cool Roofs 4,583 85,417 •41 oil 44 9334 003 Pre-school Play Structure 24,999 15,001 41 oil Village Historical Buildings 44 9364-001 McWilliams House Improvements 6,297 3,703 Revision Date: 1/21/2015 Schedule 2 CIP-Current Project List FY 2015/16-2019/20 Prior Estimated Roll Planned Over Project Project No. Project Description Changes Requested Years FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Cost Library Building 45 9372-001 Library Exterior Maintenance Projects 29,030 10,970 i oil TOTAL FACILITIES PROJECTS 335,808 253,745 Information Technology 46 9411-001 Financial System Upgrade 67,200 3,534 471 9412-004 1 Document Imaging-Combined 10,0001 68,673 481 9415-001 1 Development Technology Management 16,000 1 14,0001 1 1 1 1 off Community Programs 49 9442 001 L&L District Initiation Match Program 49,000 Development 50 9451-002 lGeneral Plan Update 100,000 511 9452-001 IVillage Fa4ade Program 20,657 20,321 Administrative 52 9461-001 lCommunity Wildfire Protection Plan - 25,000 53 9491-00 1 Risk Management ADA Program 85,808 114,192 50,000 50,000 50,000 50,000 TOTAL ADMINISTRATIVE PROJECTS 199,665 394,720 50,000 50,000 50,000 50,000 Revision Date: 1/21/2015 Schedule 3 CIP-Unfunded List FY 2014/15 Project Project Title Project Descriptions Changes Requested Cost LA • • 1 Quito Road Sidewalk Improvements The project would fund sidewalk improvements on Quito Road between Highway 85 150,000 and Allendale Avenue. 2 Big Basin Way Turn Around Design and construction of a turn around at the end of the Village to improve Remove project from list 500,000 circulation through the Village. The budget increased due to the expected cost of a Caltrans report and approval process. 3 1EI Quito Curb&Gutter Ongoing project for the repair and replacement of curbs and gutters in the EI Quito 150,000 neighborhood. TOTAL STREETS UNFUNDED PROJECTSIII I Jill 11 800,000 • pil i I lJill • 4 Saratoga Creek Trail Construction of a pedestrian trail along Saratoga Creek behind Village businesses.The Decrease$50,000 and move project to CIP Candidate-Future Years as design and 250,000 trail would start at SS Rd and continue to Wildwood Park.A potential grant would fund environmental work is currently underway construction. Design of the trail is currently in process and funded by a SCVWD grant and City match 5 Village to Hakone Trail Design and construction of a trail along Big Basin Way from Village to Hakone Gardens. 120,000 6 Congress Springs Park North Side Entrance Construct a trail connecting residential neighborhood around Cox Avenue east of 100,000 Highway 85 to northside of Congress Springs Park. 7 Via Regina Trail Construct a Pedestrian-Equestrian trail that would connect Via Regina and Villa Oaks 60,000 Lane. 8 Norton/Villa Montalvo Emergency Route Construct an emergency access road connecting the parking lot of Montalvo Arts 1,000,000 Center and Norton Road. 9 Joe's Trail at Saratoga de Anza Develop a trail from Saratoga-Sunnyvale to Arroyo de Arguello,includes costs for 600,000 design,environmental,acquiring easements and construction. TOTAL PARKS AND TRAILS UNFUNDED PROJECTS 2,130,000 10 Theater Improvements Theater improvements include:design and construction of:ticket/concession area in Remove project from list and focus resources on theater improvements that are a 1,000,000 lobby;backstage dressing room;restroom annex;relocation of control booths;and priority replacement of boiler and plumbing. 11 Solar Panels at City Hall Install solar panels on City Hall Admin Bldg to provide increased efficiency and energy 120,000 savings.Quarterly preventative maintenance will be included as part of regular staff duties.Pay back on this installation will be possibly 20 years. Revision Date: 1/21/2015 Schedule 3 CIP-Unfunded List FY 2014/15 Project Project Title Project Descriptions Changes Requested Cost 12 Windows at Public Works install double pane windows in the west facing windows in Public Works offices.This 40,000 project will improve temperature efficiencies,reduce sound,and increase energy savings.Current windows are recycled single pane windows which were installed when the buiding was originally built,and are no longer operable. 13 Renovate Existing Stage at Community Center This project would provide ADA accessibility and improve storage and safety at the Increase cost$15,000 to$85,000 and move project to CIP Candidate List for 70,000 Community Center Multi-Purpose Room Stage.There are no ongoing costs for this consideration in FY 2016/17 project.Rotary may provide$10K grant. 14 Community Development Lobby Remodel A lobby redesign to allow customers to remain at a single location while appropriate Move project to CIP Candidate List for consideration in FY 2018/19 100,000 staff members respond to customer's location during the planning and building customer process,resulting in improved efficiencies and customer service. 15 Corporation Yard Gate Replace existing front gate with security gate system and access controls for the gate Remove project from list 60,000 and doors at the Corporation Yard.Improvements would increase the security and accountability of the Corporation Yard. TOTAL FACILITY UNFUNDED PROJECTS 1,390,000 Revision Date: 1/21/2015 Schedule 4 CIP-Candidate Project List FY 2015/16-2019/20 Proposed Planned Future Project Project Title Project Description FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Years Cost TOTAL COUNCIL NOMINATED PROJECTS Street Repair&Resurfacing 1 Annual Roadway Maintenance and Repairs To address failed street repair$50K,signage and striping$75K,Roadway repair 375,000 375,000 375,000 375,000 375,000 contingency$150K,Traffic Street Light Repair$50K throughout the City 2 Residential Street Reconstruction To continue to address the reconstruction of residential streets whose condition has 300,000 300,000 300,000 300,000 300,000 deteriorated beyond the scope of annual maintenance and repairs. Roadway Safety Improvements 3 Kirkmont Traffic Signal To erect a traffic light signal at the corner of Kirkmont and Saratoga-Sunnyvale.Traffic - 150,000 - - - at this intersection is heavy throughout the day,primarily during school hours. 4 Beaumont Traffic Circle To install a traffic circle at the intersection of Beaumont Avenue and Saratoga Vista 30,000 - Court due to the continued high speeds of vehicles traveling Beaumont Avenue. 5 Hwy 9 Safety Improvement-Phase V To continue Hwy 9 Safety Improvements.Majority of funding made through grants 2,000,000 from CalTRANS with a local match component. Street Landscape&Beautification Sidewalks,Curbs&Gutters 6 Annual Curb and Gutter To address curb and gutter repairs throughout the City 50,000 50,000 50,000 50,000 50,000 oil Sol 7 Village Stormwater Facilities To mitigate environmental damage as a result of trash,grease and sediment from - 150,000 150,000 75,000 - entering into Saratoga Creek by installing Storm Water treatment devices in the storm drain lines within Saratoga Village. 8 Saratoga Hills Storm Drain Improvements To improve the existing storm drain system at the corner of Saratoga Hills Road and 44,000 - - - Pontiac Drive.This project was approved in FY 14/15,however the scope of the project has changed significantly enough to propose a new project 9 Saratoga Village Curb&Gutter Project-Phase To continue improvements made to curbs and gutters in Saratoga Village. Majority of - - 105,000 204,000 148,000 IV funding through grants from CalTRANS with a local match component. Bridges&Retaining Walls 10 Bridge Repair and Maintenance CIP To address recommended bridge repairs and needed maintenance based on inspection 50,000 50,000 50,000 50,000 50,000 reports from CalTRANS 11 Wardell Road Bridge Replacement To replace the Wardell Road Bridge over Calabazas Creek erected in 1926.Grant - 50,000 - 100,000 - funding will be pursued,however,there will be a local match component TOTAL STREETS PROJECTS 849,000 3,125,000 1,030,000 1,154,000 923,000 - City Wide Revision Date: 1/21/2015 Schedule 4 CIP-Candidate Project List FY 2015/16-2019/20 Proposed Planned Future Project Project Title Project Description FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Years Cost 12 Playground Replacement To replace playgrounds at the following parks;Beauchamps,Gardiner,Bellgrove and - 100,000 100,000 100,000 100,000 Kevin Moran 13 Pathways and Sports Courts To address maintenance and repair of pathways and sports courts located in parks 50,000 50,000 50,000 50,000 50,000 0 oil throughout the City 14 Sustainable Landscape Project To replace exisitng landscaping with drought tolerant plants to reduce water 25,000 25,000 25,000 25,000 25,000 off consumption Park 15 Congress Springs Park Netting Replacement To replace the netting at Congress Springs Park 100,000 16 Quarry Park Master Plan-Phase II ITo address anticipated iplementation of Final Management Plan 1,000,000 Trail TOTAL PARKS&TRAILS PROJECTS 75,000 175,000 1,175,000 175,000 275,000 City Wide • Civic Center Improvements 17 City Hall-CDD Lobby Remodel To redesign the CDD Lobby area to allow customers to remain at a single location while - 100,000 i appropriate staff members respond to customer's location during the planning and building customer process,resulting in improved efficiencies and customer service. 18 Community Center-HD Audio/Visual To purchase and install a HD projection system - 25,000 - 19 Community Center-Generator To purchase and install a generator at the Community Center 90,000 - 20 Community Center-HVAC Replacement To replace the HVAC system - 60,000 21 Community Center-Stage To provide ADA accessibility and improve storage and safety at the Community Center - 85,000 - - Multi-Purpose Room Stage.There are no ongoing costs for this project.Rotary may provide$10K grant. 22 Corporation Yard- Equipment Sheds To construct equipment sheds in the Corporation Yard for security 25,000 25,000 25,000 25,000 25,000 23 Council Chambers-Dais To purchase a new dais for Council meetings - - 80,000 - - 24 Museum-Roofing System To replace the roofing system on the Museum - 75,000 25 Prospect Center Furnishings To replace furnishins and equipment at Prospect Center 28,000 - - 26 Senior Center-Portable Replacement To replace the portable building between the Theater and the Senior Center - 100,000 27 Theater-Boiler Replacement To replace the boiler located in the Theater 90,000 - - •0 off 28 Theater-Concession and Ticket Booth To make improvements to the Concession and Ticket Booth area as part of the Theater - 25,000 off Master Plan 29 Theater-Control Booth Stairway To make improvements to the stairway to the Control Booth as part of the Theater 40,000 - Master Plan 30 Theater-HVAC Replacement To replace the HVAC system - - 60,000 - 31 Theater-Roof Top Duct Work To replace worn duct work on the roof of the Theater 90,000 - - •0 Ms Revision Date: 1/21/2015 Schedule 4 CIP-Candidate Project List FY 2015/16-2019/20 Proposed Planned Future Project Project Title Project Description FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Years Cost 32 Theater-Roofing System To replace the roofing system on the Theater - - - - 80,000 •• 33 WHH-Storage Building To construct an exterior storage building adjacent to the Warner Hutton House 45,000 - oil 34 WHH-Roofing System To replace the roofing system on the Warner Hutton House 50,0001 off Village Historical Buildings Library Building TOTAL FACILITIES PROJECTS E 278,000 265,000 1 325,000 1 125,000 1 255,000 - Information Technology 34 Park and Facility Security Improvements To install security cameras and key code/card access doors in City parks and facilities - 20,000 20,000 20,000 - 35 Recreation registration software To purchase a new Recreation program registration software 20,000 - - - - 36 Trak-IT Software system upgrade To upgrade existing Trak-IT software in CDD 60,000 - 37 City Website/Intranet Redesign To update the City's website and implement an intranet system 75,000 - - off 38 GIS Enterprise Software To purchase GIS software 15,000 oil Community Programs Development Programs 38 Village Vision 100,000 - W lot Administrative TOTAL ADMINISTRATIVE PROJECTS 255,000 35,000 20,000 20,000 - - 1 oil • �•� .•� •�� • ��� rg,K§1111 11111 1 oil Revision Date: 1/21/2015 1 u �A.�.J L SARATOGA CITY COUNCIL ` �CIFOik"� MEETING DATE: January 23, 2015 DEPARTMENT: City Manager's Office PREPARED BY: Brian Babcock, Administrative Analyst I SUBJECT: Community Engagement RECOMMENDED ACTION: Receive presentation and provide direction. BACKGROUND: Local jurisdictions have historically communicated with the public in formal ways, such as legal advertising in the back of newspapers, legal notices mailed to property owners, and posting agendas and notices. These methods are still legally required for various actions. However, cities have over time utilized additional communication methods to improve community involvement in local government. Saratoga has implemented a number of measures in the past ten years to increase engagement with the community. The following list highlights the more significant ones: • 2004 — The City Council began meeting with community groups through joint sessions before each Council meeting • 2007 — The City's quarterly newsletter "The Saratogan" was re-instituted and mailed to every household • 2009 — A comprehensive update to the City's website incorporated new features, including email subscriptions and customized pages for major City projects • 2012—The City created a Facebook profile • 2013 — The City became an early supporter of Nextdoor, and began using Vimeo and YouTube to publish informational videos • 2014—The City created a Twitter account It is important that the City continue monitoring advances in communication technology. This will ensure that the City's communication methods are reaching and engaging Saratoga residents. However, the City does not plan on dropping any traditional methods of communication that many residents still rely on for information. 39 There are opportunities to further upgrade the City's communication methods to increase the City's reach. This could include using online crowdsourcing and messaging platforms, a comprehensive update to the City website, enhanced email messaging tools, or increasing opportunities to engage residents in person. During the City Council Retreat, staff will be presenting information on current and possible future communication tools and how each is used to engage the public. 40 1 u �A.�.J L SARATOGA CITY COUNCIL ` �CIFOik"� MEETING DATE: January 23, 2015 DEPARTMENT: City Manager's Office PREPARED BY: Crystal Bothelio, City Clerk SUBJECT: Commission Roles & Work Plans RECOMMENDED ACTION: Provide direction on Commission roles and work plans. BACKGROUND: Traditionally, the City Council has reviewed and provided direction on the Planning Commission work plan during the annual City Council Retreat. At the direction of the Mayor, this year's retreat will include Council review of the work plan and objectives for all of the City's Commissions. Staff has collected work plans from each of the Commissions (attached) and requested that staff liaisons and a representative of each Commission attend the retreat to present their work plans and address Council questions. Staff has included information about the membership and purpose of each of the City's Commissions in the attached Commission work plans. Additionally, a tentative Commission recruitment schedule for 2015 is attached as a reference. ATTACHMENTS: Attachment A- Heritage Preservation Commission Work Plan, Membership, and Duties Attachment B - Library Commission Work Plan, Membership, and Duties Attachment C -Parks and Recreation Commission Work Plan, Membership, and Duties Attachment D -Planning Commission Work Plan, Membership, and Duties Attachment E - Traffic Safety Commission Work Plan, Membership, and Duties Attachment F - Youth Commission Work Plan, Membership, and Duties Attachment G- Tentative 2015 Commission Recruitment Schedule 41 HERITAGE PRESERVATION COMMISSION WORK PLAN, MEMBERSHIP, DUTIES WORK PLAN Short Term — Remainder of FY 2014/15 1. Add properties to the Heritage Resources Inventory including Landmark and Mills Act properties 2. Add new trees to the Heritage Tree Inventory 3. Evaluate heritage resources along Big Basin Way 4. Update website design, resource links, and add FAQs 5. Community outreach efforts: • Participate at Blossom Festival, Arbor Day, and America in Bloom • Continue to liase with the Saratoga Historical Foundation and their events • Articles for the Saratogan and Saratoga News on the importance of being listed on the City's Heritage Resources Inventory and Heritage Tree Inventory Long Term— FY 2015/16 1. Evaluate heritage resources in the City 2. Develop and HPC Handbook that includes mission, goals, procedures, training resources and reference links 3. Evaluate creation of a Cultural Landscape Inventory (i.e. Katheryn Kennedy Vineyards and the cactus garden on Bountiful Acres Way) 4. Community outreach efforts: • Develop standard information articles to appear 3 or 4 time a year in the Saratoga News • Continue participation in appropriate community events • Create flyers on the Heritage Preservation Commission, Heritage Trees, and a Heritage Resources Inventory & Historic Landmark Q&A • Create photo album on Heritage Trees and Big Basin Properties CURRENT MEMBERSHIP Name Term Ending Elig. for Reappointment Other Marilyn Marchetti 12/31/15 Yes Paul Conrado 12/31/16 Yes Architectural/Building Professional Alexandra Nugent 12/31/16 Yes Historical Foundation Representative Larry Schuck 12/31/17 Yes Architectural/Building Professional Annette Stransky 12/31/17 Yes Paula Cappello 12/31/18 No Rina Shah 12/31/18 Yes Architectural/Building Professional 42 CITY CODE 13-10.050— POWERS AND DUTIES The Heritage Commission shall be advisory only to the City Council, the Planning Commission and the agencies and departments of the City, and shall establish liaison and work in conjunction with such authorities to implement the purposes of this Chapter. The Heritage Commission shall have the following powers and duties: (a) Conduct, or cause to be conducted, a comprehensive survey of properties within the boundaries of the City for the purpose of establishing the Heritage Resource Inventory. To qualify for inclusion in the Heritage Resource Inventory, a property must satisfy any one or more of the criteria listed in Section 13-15.010 of this Chapter. The Inventory shall be publicized and periodically updated, and a copy thereof shall be kept on file in the Planning Department. (b) Recommend to the City Council specific proposals for designation as a historic landmark, heritage lane or historic district. (c) Recommend to the appropriate City agencies or departments projects and action programs for the recognition, conservation, enhancement and use of the City's heritage resources, including standards to be followed with respect to any applications for permits to construct, change, alter, remodel, remove or otherwise affect such resources. (d) Review and comment upon existing or proposed ordinances, plans or policies of the City as they relate to heritage resources. (e) Review and comment upon all applications for building, demolition, grading or tree removal permits involving work to be performed upon or within a designated historic landmark, heritage lane or historic district, and all applications for tentative map approval, rezoning, building site approval, use permit, variance approval, design review or other approval pertaining to or significantly affecting any heritage resource. The Commission's comments shall be forwarded to the City agency or department processing the application within thirty days after receiving the request for such comments. (f) Investigate and report to the City Council on the availability of federal, state, county, local or private funding sources or programs for the rehabilitation and preservation of heritage resources. (g) Cooperate with county, state and federal governments and with private organizations in the pursuit of the objectives of heritage conservation. (h) Upon the request of a property owner or occupant and at the discretion of the Heritage Commission, render advice and guidance on the conservation, rehabilitation, alteration, decoration, landscaping or maintenance of any heritage resource; such voluntary advice and guidance shall not impose any regulation or control over any property. (i) Participate in, promote and conduct public information and educational programs pertaining to heritage resources. (j) Perform such other functions as may be delegated to it by resolution or motion of the City Council. 43 LIBRARY COMMISSION WORK PLAN, MEMBERSHIP, DUTIES WORK PLAN PROJECT DESIRED OUTCOME Work with library staff in brainstorming Commissioners to assist with the current programs and give sessions on current and upcoming programs. input to library staff on other possible opportunities. Work with the Saratoga Library to get the To bring further recognition to the Saratoga Library, thus library building categorized as a California elevating its status even further and gaining more library Heritage Building. memberships. Increase the amount of marketing for the Increase community's knowledge of the library's resources, library by collaborating with the library staff as well as grow the number of Saratoga Library cardholders on ways to communicate to the community. who could take advantage of these resources. Create a Library Resources Template or one- page flyer, to simplify the amount of resources Engage the community further on what the library has to the library offers. This will make offer. Gain more library memberships. communication of resources easier. Identify local organizations and community groups that could benefit from connections with the library. The next step is to Identify and contact leaders of local contact leaders of these organizations. Commissioners and organizations and community groups. library staff would invite leaders to informational meetings to discuss library resources. Project would help expand membership with local leaders. CURRENT MEMBERSHIP Name Term Ending Elig. for Reappointment Other Jill Whitcomb 9/30/15 Yes Robert Gulino 9/30/16 Yes Vacant 9/30/17 N/A Monte Sereno Representative Lauren Marty 9/30/17 Yes Stephen Kispersky 9/30/18 Yes RESOLUTION NO. 2031—BASIC RESPONSIBILITIES & DUTIES BASIC RESPONSIBILITIES The Library Commission shall serve as a senior advisory and liaison body. Its basic responsibilities shall include the following: 1. Provide counsel and recommendations on Library policies, budgets, plans and procedures to the Saratoga City Council, the City staff, the Santa Clara County Library staff, and the Saratoga Library Supervisor. 44 2. Identify and bring to the attention of the City Council, the City staff, the Santa Clara County Library staff, and the Saratoga Library Supervisor (as appropriate) present and prospective issues and questions relating to Library operation. 3. Participate, along with other appropriate governmental units, in explaining and interpreting matters pertaining to Library operation to Library users, Library support groups, and the general public. 4. Perform such other activities as may be directed by the Saratoga City Council. DUTIES In carrying out its basic responsibilities, the Library Commission shall perform the following duties: 1. Hold formal meetings as required (see preceding Section on "Administration"). 2. Maintain communications with the City Council, the City staff, the Santa Clara County Library staff, and the Saratoga Library Supervisor on matters that have a significant impact on the Library's budget and operation. 3. Receive information and suggestions on Library operation from the public, through public hearings and through less formal channels of communication such as correspondence and discussion sessions. 4. Maintain within the Commission a continuity of knowledge of the Library, its operation and its problems. 5. Keep generally informed on technical developments that could have a bearing on the Library's operation. 6. Participate in the general planning of the library's operation and in the planning of events related to the Library. 7. Promote good public relations concerning the Library and its activities. 8. Work with "Friends of the Saratoga Libraries" and other support groups as may be desirable in the planning of their activities. 9. Promote optimal utilization of the library facilities and staff, and encourage service mindedness on the part of all having to do with providing Library service to the public. 10. Encourage the preservation of the Saratoga Library plant through proper upkeep and preventive maintenance. 45 PARKS AND RECREATION COMMISSION WORK PLAN, MEMBERSHIP, DUTIES WORK PLAN Project Name Objective Tasks Movie Night To build stronger community Continue outdoor movie night series in the relations and gathering families by summer until a community champion volunteers to hosting events at City parks take over the effort. Let's Walk Saratoga To continue promoting a healthy Coordinate guided walks at the Quarry Park and lifestyle by informing residents trails in Saratoga to support the City's Let's Move! about park and trail locations and initiative and continue to build participation rate. amenities. Nesting Boxes To enhance biodiversity and Consider working with West Valley College Parks greater understanding of urban Management Department to monitor the nesting wildlife. boxes beginning in November to prepare for the 2015 calendar. CURRENT MEMBERSHIP Name Term Ending Elig. for Reappointment Renee Paquier 9/30/15 Yes Terence Ward 9/30/16 Yes Ping Li 9/30/17 Yes Rick Pearce 9/30/17 Yes Pallavi Sharma 9/30/18 Yes RESOLUTION NO. 432—POWERS & DUTIES The powers of the Parks and Recreation Commission are advisory only and it shall render all reports and recommendations directly to the City Council, unless otherwise directed by the Council. The Commission does not constitute a planning agency with the terms and meaning of Government Code Section 65100 of the State of California. The Commissions' powers and duties, in such advisory capacity to the City Council, shall include the following: (a) to recommend a parks and recreation program, and the programming and implementation thereof, to the Council; (b) advise the Council specifically on design, use, development, financing, care and maintenance of parks and playgrounds; landscaping along thoroughfares and other City streets; walkways, pathways, equestrian paths, streambeds, protection and promulgation of trees, and such other matters as may be requested by the Council. 46 PLANNING COMMISSION WORK PLAN, MEMBERSHIP, DUTIES WORK PLAN Short Term Work Items Remainder of FY 2014/15 • Story Pole Standardization /Certification o Modify existing story pole regulations to include consistent construction and design methods and certification of accuracy standards • Short Term Rentals (Air BnB) — Home Exchange/Swapping o Reviews issues related to short term residential rentals and consider appropriate regulations Long Term Work Items for FY 2015/16 • Village Design Guidelines o Review and update guidelines and illustrations— last updated in January 1991 • Update Village Parking Regulations o Review surplus parking standards in C-H zoning district • Non-Conforming Structures o Review existing standards which use existing construction cost valuation as a method of limiting modification or expansion of non-conforming structures and simplify these standards • Lawn Signs o Modify sign regulation to minimize the number of lawn signs which can be installed on individual parcels. CURRENT MEMBERSHIP &ATTENDANCE INFORMATION Name Term Ending Elig. for Reappointment Vacant 3/31/15 N/A Pragati Grover 3/31/15 Yes Leonard Almalech 3/31/16 Yes Dede Smullen 3/31/17 Yes Tina Walia 3/31/17 Yes Colleen "Kookie" Fitzsimmons 3/31/18 Yes Wendy Chang 3/31/18 Yes CITY CODE 2-15.030 POWERS & DUTIES The Planning Commission is hereby designated as the planning agency of the City, as described in Section 65100 of the Government Code, and shall exercise the functions of a planning agency as prescribed in Section 65101 of the Government Code. The Planning Commission shall also exercise the powers and perform the duties conferred upon it by this Code and assigned to it from time to time by the City Council. 47 GOVERNMENT CODE 65100 There is in each city and county a planning agency with the powers necessary to carry out the purposes of this title. The legislative body of each city and county shall by ordinance assign the functions of the planning agency to a planning department, one or more planning commissions, administrative bodies or hearing officers, the legislative body itself, or any combination thereof, as it deems appropriate and necessary. In the absence of an assignment, the legislative body shall carry out all the functions of the planning agency. GOVERNMENT CODE 65101 (a) The legislative body may create one or more planning commissions each of which shall report directly to the legislative body. The legislative body shall specify the membership of the commission or commissions. In any event, each planning commission shall consist of at least five members, all of whom shall act in the public interest. If it creates more than one planning commission, the legislative body shall prescribe the issues, responsibilities, or geographic jurisdiction assigned to each commission. If a development project affects the jurisdiction of more than one planning commission, the legislative body shall designate the commission which shall hear the entire development project. (b) Two or more legislative bodies may: (1) Create a joint area planning agency, planning commission, or advisory agency for all or prescribed portions of their cities or counties which shall exercise those powers and perform those duties under this title that the legislative bodies delegate to it. (2) Authorize their planning agencies, or any components of them, to meet jointly to coordinate their work, conduct studies, develop plans, hold hearings, or jointly exercise any power or perform any duty common to them. 48 TRAFFIC SAFETY COMMISSION WORK PLAN, MEMBERSHIP, DUTIES WORK PLAN • Continue to investigate, review and analyze traffic safety issues raised by the Community • Promote education to the Community regarding traffic, bicycle and pedestrian safety • Continue to refine the TSC process to find ways to improve website information and communication to the public. • Establish guidelines for Traffic Calming as needed • Review projects on the Capital Improvement Project list and prioritize for funding CURRENT MEMBERSHIP Name Term Ending Elig. for Reappointment Ray Cosyn 12/31/15 Yes Peggy Guichard 12/31/15 No Elena Musselman 12/31/15 Yes EJ Tim Harris 12/31/16 Yes Mitch Kane 12/31/17 Yes Corinne Vita 12/31/17 Yes John Chen 12/31/18 Yes RESOLUTION NO. 05-032— MISSION The exclusive mission of the Traffic Safety Commission shall be to investigate, review, and analyze issues, and make recommendations to the City Council and City staff regarding traffic safety. The Commission shall work to increase awareness of, and attention to, the traffic safety needs of the community by improving communications and involvement between the community, and the City government on services, needs and programs. 49 YOUTH COMMISSION WORK PLAN, MEMBERSHIP, DUTIES WORK PLAN • Participate and lead a session at the bi-annual YAC Attack, a Northern CA one-day conference for youth commissions. Conference provides an assortment of ideas for commissions to utilize in Saratoga. • Inform more youth about the Youth Commission by working closely with all local schools and improve the community involvement by participating in community based events such as the Witchy Walk, the Tree Lighting Ceremony, Lunar New Year Celebrations, and Arbor Day. • By continuing to offer Walk-One-Week, residents can increase their exercise, help the environment, and mitigate traffic congestion. • To reach out to even more youth and teen residents, the Youth Commission plans to organize and sponsor city-wide middle school dances. • Develop educational forums, similar to Pizza and Politics, during non-election years to help engage teens about other important aspects of adulthood. CURRENT MEMBERSHIP Name Term Ending Elig. for Reappointment School Maya Gupta 7/1/15 No Redwood Middle School Allison Lin 7/1/15 No Saratoga High School Mihir Pandya 7/1/15 No Lynbrook High Summer Smith 7/1/15 No Saratoga High Jeremy Wang 7/1/15 No Monte Vista High Roshan Verma 7/1/16 No Redwood Middle School Alexis Weisend 7/1/16 No Rolling Hills Middle School Malika Singh 7/1/16 No Monta Vista High School Mitali Shanbhag 7/1/16 No Saratoga High School Nupur Maheshwari 7/1/16 No Saratoga High School Daniel Eem 7/1/16 No Saratoga High School RESOLUTION NO. 542-2 SECTION 3— POWERS The Commissioners' powers and duties, in such advisory capacity to the City Council, shall include the following: a) To develop and recommend guidelines involving the concerns of youth, and the programming and implementation thereof, to the Council; b) Advise the Council generally on matters which concern youth and specifically on the various aspects of city matters related to youth as may be requested by the Council. 50 TENTATIVE 2015 COMMISSION RECRUITMENT SCHEDULE Planning Commission Recruitment (2 terms) January 2015 Recruitment Announcement January 14, 2015 Commission Meeting January 28, 2015 Commission Meeting February 11, 2015 Commission Meeting February 24, 2015 Application Deadline February 25, 2015 Planning Commission Meeting March 4, 2015 Applicant Interviews March 18, 2015 Appointment & Oath of Office Youth Commission Recruitment (5 terms) February 2015 Recruitment Announcement March 10, 2015 Commission Meeting April 14, 2015 Commission Meeting May 12, 2015 Commission Meeting May 13, 2015 Application Deadline May 18, 2015 (Mon) Applicant Interviews June 3, 2015 Appointment & Oath of Office Library& Parks and Recreation Commission Recruitment (1 term each) June 2015 Recruitment Announcement June 25, 2015 Library Commission Meeting July 14, 2014 Parks & Recreation Commission Meeting August 26, 2015 Library Commission Meeting September 8, 2015 Parks & Recreation Commission Meeting September 9, 2015 Application Deadline September 16, 2015 Applicant Interviews October 7, 2015 Appointment & Oath of Office Heritage Preservation Commission &Traffic Safety Commission Recruitment (1 term for Heritage Preservation Commission, 3 terms for Traffic Safety Commission) September 2015 Recruitment Announcement September 8, 2015 Heritage Preservation Commission Meeting September 10, 2015 Traffic Safety Commission Meeting October 13, 2015 Heritage Preservation Commission Meeting November 10, 2015 Heritage Preservation Commission Meeting November 12, 2015 Traffic Safety Commission Meeting November 23, 2015 Application Deadline December 2, 2015 Applicant Interviews December 16, 2015 Appointment & Oath of Office 51 TERMS ENDING IN 2015 Members on Term End Commissioner Commission Elig. for Reappointment Commission 3/31/15 Vacant Planning N/A 7 3/31/15 Pragati Grover Planning Yes 7 7/1/15 Maya Gupta Youth No 11 7/1/15 Allison Lin Youth No 11 7/1/15 Mihir Pandya Youth No 11 7/1/15 Summer Smith Youth No 11 7/1/15 Jeremy Wang Youth No 11 9/30/15 Jill Whitcomb Library Yes 5 9/30/15 Renee Paquierft Parks and Recreation Yes 5 12/31/15 Marilyn Marchetti Heritage Preservation Yes 7 12/31/15 Ray Cosyn Traffic Safety Yes 7 12/31/15 Peggy Guichard Traffic Safety No 7 12/31/15 Elena Musselman Traffic Safety Yes 7 52 1 u �A.�.J L SARATOGA CITY COUNCIL MEETING DATE: January 23, 2015 DEPARTMENT: City Manager's Office PREPARED BY: James Lindsay, City Manager SUBJECT: Department Work Plans RECOMMENDED ACTION: Receive report and provide direction to staff. BACKGROUND: At past retreats the Community Development Department and the Planning Commission were the only City department and Commission to highlight their work plans for the year. This year, the Council has chosen to review the annual goals for each of the City commissions at the retreat. Similarly, I will provide the Council an overview of the major work efforts planned in each City Department. This overview will be presented at the retreat with an accompanying attachment distributed to the Council on Wednesday, January 21St, with the remaining retreat materials. 53 Janurary-June 2015 FY 2015/16 Finance I Calendar Year End Payroll Close and Filings 1 Business License Code Updates 2 Calendar Year End 1099 Filings 2 Collection Agency RFP and Contract Negotiation 3 FY 2014/15 Budget Status&Mid Year Budget Adjustments 3 Financial Report Preparations 4 FY 2015/16 Fee Schedule 4 Finance Emergency Operations Preparation 5 FY 2014/15 Year End Accounting Close&Interim Audit 5 Fee Study Preparations Information Technology 1 Agenda Management Software Upgrade 1 Recreation Software Upgrade(if approved) 2 Weblink Public Portal for online public records requests 2 Trak-It Software Add-ons-online payment and IVR module implementations 3 IT Management Software implementation 3 Website/Intranet Implementation/Upgrade 4 Contract Workflow 4 Prospect Center Point-to-Point Network Implementation 5 Finalize Blaney Plaza Wireless system Human Resources 1 MOU/Contract Negotiations 1 MOU Contract Administration 2 Finalize Affordable Care Act policy 2 Regional Area Personnel Programs/Relations 3 Update voluntary reduced workweek policy 3 Organizational Planning 4 Employee safety and wellness initiatives 4 Staff training 5 Recruitment and Selection 5 Recruitment and selection Administrative Services 1 FY 2015/16 Budget Development 1 FY 2015/16 Budget implementation 2 Finance&Administrative Policy Development 2 Finance&Administrative Policy Documentation 3 Budget Document template design/preparation 3 Document template integration 4 Mid-Year Status/Five Year Forecast reporting 4 Arrowhead WD Conduit Bond if approved) 5 Intranet website design/prep 5 Intranet website Implementation City Manager's Office I Online access to City Records l Website update If funded 2 Increased Communications/Engagement through new 2 Update of Records Retention Schedule 3 New City Contract Templates 3 Prepare Saratoga wine trail sign locations for approval by City Council;If approved,creation and display of signs on Wine Trail 4 Electronic Contract Routing Community Development-Planning I Update owner information database in Trakit 1 Annual Code Update 2 Reformat and edit department handouts 2 Update zoning and general plan maps to include recent annexations and amendments to the City's Urban service area Implement the Policy Program of the adopted 2015-2023 3 Housing Element Recreation services Incorporate new layout and features such as referral Develop long-term partnerships with established organizations(e.g.,SUSD 1 information,instructor bios,etc.in the 2015 Spring Activity 1 Marching Band&Saratoga co-op preschool) in order to increase overall Guide. enrollment of program offerings. 2 Increase and improve targeted marketing efforts. 2 Work with Saratoga Library to implement a quarterly wellness workshop series. 3 Seek collaborative opportunities with neighboring cities, 3 Improve the online registration experience and number of participants using the Saratoga Library and West Valley College. Internet to register fora program. Expand enrichment project offerings for in-house camp 4 4 Increase percentage of returnees in-house camps programs such as science experiments,cooking,etc. 5 Great Getaways participants will attend the U.S.premier of the 5 Increase the number of participants in Great Getaway destinations to with the San Francisco Symphony composition of The Godfather. overall goal of filling up every trip offered. Teen Services I Sponsor and host"Fly Me to the Moon,"an intergenerational 1 Participate and lead a session at the bi-annual YAC Attack. youth/senior event including dinner&dancing at Friendship Hall. Participate in the regional YAC Social with other youth Increase awarness of the Youth Commission with all local schools and improve the 2 commissions. 2 community involvement by participating in community-based events such as Witchy Walk the Tree Lighting Ceremony,and Arbor Day, 3 Organize WOW(Walk-One-Week)at the three Saratoga 3 By continuing to offer Walk-One-Week,residents can increase their exercise,help elementary schools. the environment,and mitigate traffic congestion. 4 Recruit teens to join the Leadership-In-Training program. 4 Expand the LIT program beyond serving in-house camps(i.e.,contractors)to accommodate more teenage residents to participate in this leadership program. Find placements for high school volunteers during the school 5 5 Organize and sponsor city-wide middle school dances. year. Facility Rentals 1 Recruit,hire,orient,and train new Facility Attendant. 1 Transfer scheduling of City sports fields from Public Works to Facility Rentals. 2 Update inventory list for Independent Contractors. 2 Update AV systems in all MPRs 3 Develop systems for Sports Field User Groups program. 3 Continue to work with Theater groups to improve facility with construction of concession and ticket booth,etc. Building Maintenance 1 Complete electrical main panel and emergency generator 1 Paint exterior south walls of the Main Library. 2 Remodel CMO,Finance,and Admin Conference Room. 2 Install new flooring in all City hallways. 3 Replace roof system over Community Center. 3 Assist in Senior Center remodel project. 4 Install Stanley security system to doors at Community Center. 4 Build storage building for Warner Hutton House. 5 Construct covering between Theater and dressing room 5 Replace Boiler and roof top duct work at the Theater. Risk Management Update risk management resolutions to reflect current 1 1 Continue prioritization of ADA transition plan. requirements and modern standards. 2 Begin prioritization of ADA transition plan. 2 Through the Risk Management Committee,focus efforts to turn five"red lights"to yellow or yellow lights to green. 3 Continue self-evaluation of Risk Management best practices 3 Assist and guide Administrative Services with updates Risk Management report card. resolutions,ordinances and codes to current requirements and practices. 4 Evaluate Municipal Code for outdated Risk Management 4 Update City contract templates to reflect current standards of insurance and resolutions and ordinances. com liance. Assist Administrative Services with Emergency Operationos and Disaster 5 Response purchase MOUS,etc. Public Works 1 Village Phase I1 Completion 1 Village Creek Trail Construction 2 2014 Pavement Management 2 Beaumont Traffic Circle 3 Quarry Phase I Design Completion 3 Kirkmont Traffic Signal 4 Begin Highway 9 Phase 4 4 Bridge Repair and Maintenance CIP 5 Conduct Public Meetings for Hakone Master Plan 5 Village Storm Water Facilities 6 Prospect Median OBAG Design Comlpletion 6 Annual Roadway Maintenance and Repairs 7 Annual Curb and Gutter Repairs 8 Annual Street Resurfacing 9 Complete Hakone Master Plan