9 Fiscal Year 2016-2017 Budget Presentation: Workshop #2 – Review of Street, Public Safety and Other Special Revenue and Enterprise Operating Funds. (TGS: That means Water, WasteWater, and Garbage Funds too!)

Note from TheGardeningSnail: This page may have been produced by running a PDF Image File through a program that Converts Image to Text. My apologies for any Textual Gremlins that may have crept in. I may also have broken up larger paragraphs to make them easier to read. I have also inserted a map to show where Wells are located

Meeting Date: September 06, 2016

STAFF REPORT

AGENDA ITEM: Fiscal Year 2016-2017 Budget Presentation: Workshop#2-Review of Street, Public Safety and Other Special Revenue and Enterprise Operating Funds.

MEETING DATE: September 6, 2016

PREPARED BY: Odi Ortiz, Interim City Manager/Finance Director, City Management and Consulting team

REVIEWED BY: Odi Ortiz, Interim City Manager/Finance Director

RECOMMENDATION:

City Council to review budget projections for fiscal year 2016-17 and provide staff with recommendations and/or direction.

BACKGROUND:

SECTION ONE: Street Revenue Funds (pages 1-4)

No significant changes in Street Fund operations. MCAG will start allocating TDA (Transportation Development Act) funds to local agencies after suspending revenue allocations for over six years. Projected TDA revenues are $138,000.

Approximately $590,000 has been committed to improve traffic congestion at the 99 South Bound ramp at Winton Parkway.

The Downtown Street Beautification project will continue through 2016-17 and is expected to be completed by September/October 2016.

Approximately $790,000 in project expenditures is projected in 2016-17. Another $150,000 has been budgeted for anticipated minor street improvements like slurry seal. A couple of outstanding federal grant projects (CMAQ) are expected to go out for bid in September. Both of these grants are sidewalk improvements; $400,000 is committed to sidewalk and bike-lane improvements at "F" and Winton Parkway and $234,000 are for sidewalk infill for ADA compliance at the South City areas near Foster Farms.

A total City match of $73,000 has been dedicated under these street funds. Our engineers have completed a Street Pavement Management Plan that soon will be incorporated as a planning tool document in efforts at maintaining and improving City streets. $95,000 has been dedicated towards street equipment to consider in-house street maintenance projects.

SECTION TWO: Public Safety and Other Special Revenue Funds (pages 5-8)

The City dedicates 100% of the annual $100,000 law enforcement grant funding towards police related operations primarily in salaries and benefits. Livingston formed a Special District known as the Community Facilities District in the mid 2000’s to generate additional property tax revenues for public safety (police and fire) and park operations and needs.

Livingston has collected an annual average of $465,000 in the last four years from this special district tax. Approximately 90% of these annual revenues have been dedicated to police and about 10% towards fire operations since district was created. Our police department has been participating in the MAPS program in which Livingston’s great performance was highly recognized this year. This program funds related salary and benefit projected costs of $100,000.

Modest development activity is expected in 2016-17 which would generate development impact fees for public safety.

Our fire department has evaluated a need to improve and possibly modify the existing fire building. Approximately $300,000 is available and has been committed from fire protection development impact fee reserves for this project.

$150,000 has been dedicated for park related improvements (restroom/facility repairs & equipment).

SECTION THREE: Enterprise Funds (pages 9-17): Water Operating Fund:

Per the 2014 adopted water rates, the City’s finances and operations have improved to reasonable levels. User revenues have more than doubled from $1.3 million to $2.8 million per year despite the water drought fiscal impacts. The City has managed to comply with the water conservation mandate by working closely with State officials and achieving great cooperation from the community. The fiscal impact associated with the drought has been manageable in last two years, management has been able to control or reduce costs to offset these impacts and still meet the overall goals projected on the recent utility rate study. The City has achieved good levels of operating surpluses in last two fiscal years $981,000 in FY14-15 and $958,000 in FY15-16 (preliminary results).

City’s cash on hand as of June 30, 2016 in the operating water fund is positive with a $1.1 million balance. This is equivalent to 42% or 5 months of annual expenditures. The City has met the projected goal outlined on the rate study by improving its cash reserves to over four months of annual expenditures.

The City continues with strong efforts at improving its water supply and water quality. In last three years, the City has invested over $5 million into Capital Improvement Projects. These investments have been primarily in City’s water well systems.

Well Locations with Local Landmarks

Over $2 million was invested on well#8 for TCP treatment, another $1.3 million was invested on well# 13 to add arsenic water treatment, $2 million has been dedicated to the new well# 17 currently in progress and expected to be online by November 2016.

Other well improvements have been performed to address water drought related impacts like sand filtration systems. The City has applied for a $1.5 million CDBG grant to address the aging underground water line pipes in the Central Southern areas of Livingston.

If awarded, this project will be categorized as phase III of the underground water line improvements project.

The City has joined efforts with Merced County, MID and other water agencies to explore other alternatives at improving City’s water supply, water management and to overall comply with the Sustainable Groundwater Management Act (SGMA). $50,000 has been budgeted as SGMA Compliance Contribution for anticipated joint cost for 2016-17.

revenue projections include $2.9 million in water sales, and approximately $155,000 in other types of revenues including $138,000 from water meter replacement fees for a total of $3.05 million in water revenues.

Proposed annual operating expenditures in the water enterprise fund are estimated at $2.7 million including depreciation (non-cash expense). Personnel cost is expected to increase by 17% or $88,000, overhead operation costs are increasing by 6% or $76,000 primarily due to recent improvements in water well treatment systems.

The City will continue its efforts at improving the quality of potable water in 2015-16.

Approximately $320,000 will be invested in Water Wells Operations and Maintenance to account for media treatment system recently added on several wells.

This anticipated expenditure did not occur in 2015-16 and, therefore, the need to re-budget. As usual capital projects normally take a few years to complete therefore related water well activities for wells# 13 and # 17 will carry on to 2016-17.

The City has dedicated $700,000 towards proactive efforts at addressing the anticipated 2017 State TCP MCL limit. This funding will cover the preliminary engineering and design of possible future TCP projects. These efforts will assist in preparing Livingston for grant and loan opportunities as early as 2017.

Assumptions: Minor growth, no significant changes in personnel/staffing levels and no further significant changes related to the water drought.

Wastewater Operating Fund:

The new sewer rates adopted in 2014 have improved sewer finances and overall sewer domestic operations. Customer revenues have increased from $1.5 million to just over $2 million. Sewer cash balance as of June 30, 2016 is $668,000 and fund balance of just over $6 million. The State’s water conservation mandate has had a minor impact to City’s sewer revenues.

Losing Fresenius (primary customer) in 2014 has had a significant impact to annual revenues. The impact has been estimated at over $110,000 per year. This 50,000+ square foot industrial site has been vacant since 2014. A new tenant is anticipated to occupy facility soon.

Projected 2016-17 sewer revenues are $2.1 million, same level as preliminary actuals for 2015-16. Personnel cost is expected to increase by 23% or $99,000 from 2015-16, overhead operating costs are increasing by 2% or $10,000, debt service payments and annual depreciation expenses to remain consistent in 2016-17.

City management is currently evaluating a refinancing opportunity of existing USDA bonds. City’s finances have improved and refinancing cost savings are estimated at $1.8 to $2 million during the remaining 27 years to mature.

Council is expected to review and possibly take action on loan documents as early as September/October 2016.

$129,000 has been dedicated for possible unexpected emergencies, equipment, network and other minor infrastructure needs.

Projected annual expenditures are estimated at $2.2 million including depreciation. A net sewer plant operating surplus of $65,000 is expected in 2016-17. Preliminary results for 2015-16 reflect a possible surplus of just over $200,000.

Assumptions: Minor growth, no significant changes in personnel/staffing levels and no significant changes related to the water drought.

Sanitation Operating Fund:

The City adopted new garbage/sanitation rates in January 2014. Annual revenues have increased from $959,000 in 2013 to $1.33 million by 2015-16. Personnel cost is expected to increase by 9% or $16,000 in 2016-17. Overhead operating expenditures are expected to increase by 17% or $145,000 in 2016-17. Increase is primarily in the areas of contractual cost.

Proposed 2016-17 annual expenditures are $1.2 million with a net operating surplus of $168,000.

The cash balance as of June 30, 2016 is $456,000 which is equivalent to 38% or 4.6 months of annual expenditures. Fund balance at the end of 2015-16 is estimated at $350,000.

Assumptions: Minor growth, no significant changes in personnel/staffing levels.

Fiscal Impacts: Outlined on Proposed 2016-17 Budget

ATTACHMENTS:

Proposed Street, Public Safety, Special Revenue and Enterprise Operating Fiscal Year 2016-17 Budgets

 

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

Advertisements