RPVCCA_CC_SR_2015_06_02_02_Draft_FY_2015-16_BudgetCITY OF RANCHO PALOS VERDES
MEMORANDUM
TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS
FROM: KATHRYN DOWNS, DEPUTY DIRECTOR OF FINANCE
DATE: JUNE 2, 2015
SUBJECT: DRAFT FY15-16 BUDGET
REVIEWED: DOUG WILLMORE, CITY MANAGER Mlt4J
RECOMMENDATION
Provide additional direction to Staff for any final modifications to the draft FY15-16 budget,
to prepare for the City Council's public hearing scheduled for June 16, 2015.
DISCUSSION
The draft FY15-16 Budget includes City Council direction from April 7th and May 19tH
Each City Council Member has received a separately bound copy of the draft budget
document, which has been available at City Hall and on the City's website since May 26tH
The following is a summary of the draft FY15-16 General Fund budget.
FY15-16 General Fund Budget
Recurring
One -Time
Total
Revenue
$ 27,882,209
$ -
$ 27,882,209
Transfers From Other Funds
208,000
-
208,000
Estimated Excess General Fund Reserve
2,263,842
2,263,842
Expenditures
(20,748,748)
(188,000)'
(20,936,748)
Transfers to Other Funds
(7,228,100)
(7,228,100)
FY15-16 Net Excess General Fund Reserve
$ 113,361
$2,075,842
$ 2,189,203
City Council Policy No. 45 — Balanced Operating Budget states: "The City Council shall
adopt an annual operating budget where recurring expenditures do not exceed recurring
revenues, and ongoing program expenditures are not funded with one-time revenue
sources." The summary above indicates that the draft FY15-16 General Fund budget is
balanced as required. As noted on page 45 of the draft budget document, the estimated
General Fund Reserve at June 30, 2016 is $12,657,577 ($2,189,203 in excess of the City
Council policy threshold of $10,468,374, or 50% of annual expenditures).
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DRAFT FY15-16 BUDGET
June 2, 2015
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The following items have not yet been included in the draft FY15-16 budget.
• Any changes to employee compensation as a result of employee negotiations.
• The June 2nd agenda includes a proposal from the City's Rate Engineer to review
potential changes to impervious factors and areas to prepare for a potential
extension of the storm drain user fee. A lump -sum engineering fee of $12,500 is
being proposed.
• The June 2nd agenda also includes a discussion of film permit policy and fees. Any
increases of film permit fees may impact the draft FY15-16 budget.
Capital Improvement Prooects (CIP)
The following is a summary of capital spending included in the draft FY15-16 budget.
Projects
FY1546
Landslide Dewatering Well Program
$
520,000
Portuguese Bend Landslide Strategic Plan
75,000
Abalone Cove Sewer System Plan
25,000
.Corporation Yard Resurfacing
90,000
Corporation Yard Safety & Security Improvements
75,000
Corporation Yard Utilization Study
30,000
Storage & Supply Depots
30,000
Civic Center Tennis Court
100,000
PVIC Exhibits
455,000
PVIC Exterior Lighting
50,000
PVIC Sunset Room Acoustical Improvements
80,000
Citywide ADA Transition Plan Implementation
200,000
Traffic Safety Improvements - PVDE at Bronco
500,300
Pavement Management Program Update
120,000
Regional Storm Water Quality Project
100,000
Infrastructure Management Planning Tool
25,000
Engineering & Grant Administration
120,000
Subtotal Capital improvement Projects Fund
$
2,595;300'
Storm Drain Lining
$
340,836
Storm Drain Point Repairs
900,000
'Storm Drain Maintenance & Repairs
245,544
;Contract & Staff Engineering
79,736
Subtotal Water Quality Flood Protection Fund
$
1,566,116
ADA Improvement Projects - Del Cerro Park/Burma Rd.
$
164,408
Subtotal Community Development Block Grant (CDBG) Fund
$
164,408'
Total Capital Spending
$
4,326,824
Note: The Five -Year Capital Improvement Plan includes only projects with cost
estimates of $100, 000 or more.
Summary of Resources Used for Funding Capital Spending FYI5-16
.Use of CIP & General Fund resources $ 1,340,030
.Use of restricted funds and revenue 2,985,794
Total, Resources Used to fund Capital Spending $ 41325,824
If the City Council approves all project allocations as proposed, the estimated balance of
the CIP Reserve at June 30, 2016 will be $17,014,170. All budgeted projects in excess
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DRAFT FY15-16 BUDGET
June 2, 2015
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of $25,000 for non-public projects, or $175,000 for public projects (as defined by Section
22002 of the California Public Contract Code), must be approved by City Council before
proceeding.
The City is in process of developing an Infrastructure Management Plan, with input from
the City's Infrastructure Management Advisory Committee (IMAC). Staff expects that the
IMAC will offer recommendations for project prioritization and programming during 2016.
Therefore, Public Works Staff has limited the amount of new projects proposed for FY15-
16.
Project prioritization is an important step in long-term planning for the City's infrastructure,
as unfunded needs clearly exceed the City's expected available resources. The
estimated cost of unfunded storm drain projects alone exceed $33.6 million. The City's
share of unfunded water quality mandates are currently estimated in the tens of millions.
Projects to comply with the Americans with Disabilities Act (ADA), rehabilitate aging
facilities, and solve the City's landslide issues remain unfunded.
The $17 million CIP Reserve will likely be programmed after the Parks Master Plan is
adopted, the Storm Drain Master Plan is completed, and project recommendations are
received from the [MAC.
Compliance with Legislative Review Requirements
Utility Users Tax Legislative Review
Municipal Code Section 3.30.190 requires that the City Manager submit to the City
Council an analysis of the revenues derived from the Utility User Tax (UUT) annually.
Based on the needs of the City, the City Council shall determine if any modification to the
tax rate is appropriate or if the UUT is unnecessary. The tax rate cannot be increased
without a majority vote of the residents of the City during a Municipal Election.
The current estimate of FY15-16 UUT revenue is $1.9 million (or approximately 7% of
total General Fund revenue). Based upon the operating and capital needs of the City,
Staff recommends that the current UUT rate of 3% continues to be a necessary General
Fund revenue source to provide current program service levels and CIP funding.
The City Council is expected to make a determination when the FY15-16 budget is
adopted (currently scheduled for June 16, 2015).
Golf Tax Legislative Review
Municipal Code Section 3.40.140 requires a legislative review of Golf Tax every four
years, to be completed prior to the adoption of the budget prepared for the corresponding
next fiscal year. The Golf Tax ordinance directs the City Council to determine, based on
the needs of the City, if any modification to the tax rate is necessary or if the tax should
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DRAFT FY15-16 BUDGET
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be repealed. The City Council performed the required legislative review in 2013 and
determined that the Golf Tax is necessary and that the current rate of 10% be maintained.
The next legislative review is required during 2017. The current estimate of FY15-16 golf
tax revenue is $447,900. Based upon the operating needs of the City, Staff recommends
that the current Golf Tax rate of 10% continues to be a necessary General Fund revenue
source to provide current program service levels and CIP funding.
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