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HomeMy WebLinkAboutCity Council Resolution 16-013 - Amending Annual Budget for FY 1516 SARATOGA CITY COUNCIL MEETING DATE: February 17, 2016 DEPARTMENT: Finance & Administrative Services PREPARED BY: Mary Furey SUBJECT: FY 2015/16 Mid-Year Budget Status Report and Budget Adjustment Resolution RECOMMENDED ACTION: Review the FY 2015/16 budget status report and proposed budget adjustments, and adopt the attached resolution approving the City’s FY 2015/16 mid-year budget amendments. REPORT SUMMARY: General Fund Revenues After a mid-year assessment, projections indicate General Fund revenues will again significantly exceed budget. This surplus will come from a number of sources, including Property Tax, Sales Tax, various city based taxes, and assorted operational functions. The largest source of revenue surplus will come from Property Taxes ($538,000 over budget). With the reinstatement of TEA Property Tax funding, the City will receive approximately $140,000 more in this first year, (20% of the TEA shortfall), with revenues increasing in 20% increments over the following four years until the City is returned to the full 7% TEA funding level. In addition, property turnover in the City has resulted in an additional $100,000 over budget in Document Transfer Tax revenue and assessed valuation increases contributed another $250,000 over budget. The City will receive a one-time ERAF allocation of approximately $50,000 this year from the State’s educational fund surplus. Sales Tax will end the year roughly $226,000 higher than anticipated due to both an increased level of taxable sales, and a one-time true-up payment with the close of the State’s Triple Flip. The end of the Triple Flip means the City will again receive the full 1 cent of the 8.75 cents our citizens pay on their taxable sales in Saratoga. The Triple Flip temporarily swapped Property Tax dollars for Sales Tax dollars (as well as permanently swapping vehicle license fee revenue for property tax revenue) to allow the State to purchase bonds during the economic downturn of FY 2004/05. With the bonds paid off, the temporary Sales Tax/Property Tax funding swap ends, and the State will reallocate funding sources back to their original source and timing. The timing change results in a one-time pay-out of around $160,000 of Sales Tax revenue. Other notable budget surplus revenue is expected to come from higher than expected Solid Waste fees ($35,000), Plan Check fees ($100,000), Subdivision fees ($26,000), and State Mandate reimbursements ($34,000), as well as a number of small revenue upticks, and most remarkably, a long awaited interest income increase. However, these surpluses are offset in part by unexpected Building Permit and Use Permit shortfalls ($109,000). Revenue increases on the planning side suggests this shortfall is more of a timing difference than a decreasing revenue stream. General Fund Expenditures On the expenditure side, operations are going along as planned, so only limited variances are expected between budget and actuals. Even with staff turnover of two positions, consultant and temporary staff backfill will be funded by current year budget allocations, and operational program savings will help to balance out any areas where there are overages. The remaining expenses, for Public Safety services, grant awards, and Internal Service Fund support charges are very predictable and in line with their budgets. In summary, there are no General Fund mid-year expenditure budget adjustments requests. The City expects to end the year $200,000 plus under the expenditure budget due to conservative spending practices. Other Funds The remaining operating funds, including the 26 Landscape and Lighting District Funds, 9 Internal Service Funds, and 1 Debt Service Fund are more limited in focus, and therefore typically operate within restricted financial resources. Financial activity is more structured, and workload and expenses do not fluctuate significantly with changes in the economy. Revenues and expenditures are determined at budget adoption, and as a result, financial activity generally follows along a planned path. Capital Funds While capital project funds are structured to reflect a particular body of work and can be very precise, many capital projects include unknown factors and estimates at the time a budget is prepared and adopted that may subsequently require changes in funding or timing. This year, there are a few budget adjustments requested: Quito Road Bridges The Quito Road Bridge Replacement project has moved from the initial design work of Phase I, into the Right of Way Acquisition work in Phase II. Together with Los Gatos and the Santa Clara Valley Water District, the City of Saratoga entered into a cooperative funding agreement to provide $45,880 in matching funds to a $354,120 Department of Transportation grant to complete Phase II on this project. Council has already approved acceptance of the grant and agreement, however the project funding for a total of $400,000 in revenues and expenditures must now be appropriated in the budget. Hakone Gardens Upper Moon House Foundation Repairs / Infrastructure Improvements The Hakone Gardens Upper Moon House Foundation Repairs CIP project received $125,000 of funding in FY 2009/10. No work has been completed to date. While foundation improvements are needed, the Hakone Foundation has determined there a number of higher priority projects that would make better use of the funding. The proposed budget adjustment would both rename the project to Hakone Gardens Infrastructure Improvements, and expand the project scope to include the numerous infrastructure and maintenance projects listed on the attached CIP worksheet. Theater Master Plan Improvements / Senior Center Restroom Improvements After initial design work was completed, the Theater Master Plan Improvement capital project has $39,700 of Capital Reserve funding and $77,472 of Community Development Block Grant (CDBG) ADA funding remaining. As the project will not move forward in the near future, the Coun ty requested the City repurpose the CDBG funds for another ADA project. Closing the Theater Improvement project will both release the CIP Reserve funds and the CDBG grant. The CIP Reserves would go back to the reserve, and the CDBG grant would be redirected to a new ADA compliant accessible restroom project at the Saratoga Senior Center. The County has verbally agreed to reallocate the prior year CDBG funds, and to allocate the new FY 2015/16 CDBG funds for this project. The attached budget adjustment closes the Theater Master Plan and creates a new Senior Center ADA Accessible Restroom CIP project, and then appropriates the prior year CDBG funding to this purpose. The CDBG contract and new allocation will be brought to Council later this fiscal year. The following schedule identifies all of the requested budget adjustments with item name, account numbers, and amount: Quito Road Bridges Budget Impact Cooperative Agreement Funding 411.9152-00x 4xxxx 45,880 411.9152-00x 8xxxx 45,880 Federal HBBR Grant Funding 431.9152-00x 4xxxx 354,120 431.9152-00x 8xxxx 354,120 Hakone Gardens Upper Moon House Foundation (Title and Project Scope Change only ) New Title: Hakone Gardens Infrastructure Improvements 412.9222-004 4xxxx no $ change 412.9222-004 8xxxx no $ change Theater Master Plan Improvements (Project Closed ) Eliminate CIP Reserve Fund expense appropriations 412.9322-010 8xxxx (39,700) Eliminate CDBG revenue and expense appropriations 432.9322-010 4xxxx (70,100) 432.9322-010 8xxxx (70,100) Senior Center Restroom Improvements (Project Opened ) Appropriate Prior Year CDBG Grant Funds in new project with updated amount 432.9322-01x 4xxxx 77,472 432.9322-01x 8xxxx 77,472 Proposed Capital Project Budget Adjustments FISCAL IMPACTS: Upon Council approval, the proposed revenue and expenditure CIP budget appropriations will be amended. ATTACHMENTS: Attachment 1 – Budget Adjustment Resolution Attachment 2 – Quito Road Bridges Attachment 3 – Hakone Gardens Infrastructure Improvements Attachment 4 – Senior Center ADA Restrooms BRIDGE AND RETAINING WALL PROJECTS Project Name Quito Road Bridges Phase II – ROW Acquisition Project Number 9152-XXX Department Public Works Project Manager John Cherbone Description This project funds the fair market value acquisition of a minimal amount of right of way easements. Location This project is located on two sections of Quito Road along the border of Saratoga and Los Gatos . Project Background The California Department of Transportation (CalTrans) conducted a structural assessment of the two bridges on Quito Road and rated them in need of replacement. Additionally, the bridges are not wide enough to meet current CalTrans standards for roadway use. This project will rebuild the bridges, bringing the bridge width into compliance with State roadway standards, and ultimately increasing safety for people using Quito Road. Both bridges pass over San Tomas Aquinas Creek, which flows from the San Francisco Bay in Santa Clara, through San Jose, Campbell, Los Gatos, Monte Sereno, and heads in Saratoga. The two bridges cross the San Tomas Aquinas creek along the city limits of Saratoga and Los Gatos, therefore the cities of Saratoga and Los Gatos, along with the Santa Clara Valley Water District all share in the boundaries and responsibilities of bridge maintenance. A cooperative agreement between the three agencies is in place with Saratoga named as the lead agency. Phase I of this project has been ongoing and is nearing completion. Phase II will fund the acquisition of 4,532 square feet of easements from three privately owned parcels adjoining the existing right of way, in order to meet applicable bridge standards. The second phase of the project is estimated to cost $400,000 with funding coming from local match contributions from the three cooperating agencies totaling $45,880 and a Federal Highway Bridge Replacement and Rehabilitation (HBBR) Program Grant in the amount of $354,120. Operating Budget Impacts Project management, engineering oversight and grant reporting staff costs for this project are incorporated in the operating budget. PARK & TRAIL PROJECTS Project Name Hakone Gardens Infrastructure Improvements Project Number 9222-004 Department Public Works Project Manager John Cherbone Description The Hakone Gardens Infrastructure Improvements project involves funding for various infrastructure and maintenance improvements to the existing gardens. Location Projects are located at various locations at Hakone Gardens, just outside of the Saratoga Village at 21000 Big Basin Way, Saratoga. Project Background The Hakone Foundation and staff worked together to identify a number of infrastructure and maintenance projects in addition to the new improvements in the Master Plan. Below are some examples. Infrastructure Improvements  Replace existing well pump for pond  Implement pest control methods for all buildings  Replace existing CEC deck railings  Upgrade fixture upgrade with water saving fixtures  Repair Auxiliary Gate, bottom of Bamboo Garden entrance  Upper Pavilion Restoration  Install pond filtration pump Other maintenance projects requiring attention are those that would mitigate wood damage, improve safety and electrical and lighting efficiencies. Operating Budget Impacts Staff time for project management and oversight is incorporated into the Operating Budget. 1 UNFUNDED CAPITAL IMPROVEMENT PROJECTS FACILITY IMPROVEMENT PROJECTS Project Name Senior Center Restrooms Project Number Department Recreation & Facilities Project Manager Thomas Scott Description Design and construct ADA compliant accessible restrooms for the Saratoga Senior Center Restrooms Location Community Center - 19655 Allendale Avenue, Saratoga, CA Project Background The current public restrooms in the Senior Center are not accessible nor ADA compliant , therefore not suitable for a Senior Center. Prior and current year CDBG Grant funding is available to provide the necessary funds to renovate the existing women and men’s restrooms and bring them into compliance. Operating Budget Impacts Staff time spent overseeing the construction will be incorporated into the operating budget. Maintenance costs are expected to decrease slightly as the new fixtures are more efficiently cleaned, and less likely to need repairs.