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Home My WebLink About08/30/2013 Staff: Committee members: Steven Teglia, Assistant to the City Manager Willie Rivera, Chair Ken Weir Terry Maxwell SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Friday, August 30, 2013 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA 93301 First Floor, Conference Room A A G E N D A 1. ROLL CALL 2. ADOPT JULY 29, 2013 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion Regarding Funding for TRIP Projects – Smith / Tandy 5. NEW BUSINESS A. Discussion Regarding a Possible Ballot Measure – Tandy 6. COMMITTEE COMMENTS 7. ADJOURNMENT Committee Members: Staff: Steven Teglia Willie Rivera, Chair Assistant to the City Manager Ken Weir Terry Maxwell AGENDA SUMMARY REPORT REGULAR MEETING OF THE BUDGET AND FINANCE COMMITTEE Monday, July 29, 2013 12:00 p.m. City Hall North – Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 The meeting was called to order at 12:00 PM 1. ROLL CALL Committee members present: Councilmember Willie Rivera, Chair Councilmember Ken Weir Councilmember Terry Maxwell Staff present: Alan Tandy, City Manager Ginny Gennaro, City Attorney Rhonda Smiley, Asst. to the City Manager Josh Rudnick, Deputy City Attorney Steven Teglia, Asst. to the City Manager Raul Rojas, Public Works Director Nelson Smith, Finance Director Nick Fidler, Asst. Public Works Director Don Anderson, Property Manager Ted Wright, TRIP Manager Kristina Budak, TRIP Engineer Tera Ortiz, TRIP Accountant Others present: Bill Knoetgen, Parsons Program Manager Greg Gharib, Parsons Consultant Ahron Hakimi, Kern COG Director Theo Douglas, Bakersfield Californian AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, July 29, 2013 Page 2 2. ADOPT FEBRUARY 25, 2012 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Discussion Regarding Funding for TRIP Projects – Smith / Tandy City Manager Tandy stated Vice Mayor Weir requested the Committee discuss the issue of funding for the balance of road projects such as TRIP. Finance Director Smith started a workshop presentation which included the review of the following: Estimated costs and funding for TRIP projects Four potential projects needing financing: - State Route 178 Widening: $30 million needed; - Hosking Interchange: $31 million needed; - 24th Street Improvement Project: $28 million needed; and - The Centennial Corridor Project: $317 million needed. The total estimated funding cost for the projects is $867 million. There is currently $442 million of federal and state funding allocated for the projects and $18 million local funding. An additional $407 million local funding is needed. The basis for the estimated borrowing amount After contributions from the County of Kern and Kern Council of Governments, an approximate $348 million of City funding is needed. Long term borrowing is expected to occur in 2017, considering the annual cash flow of the next four years of approximately $19.5 million, the estimated local long term borrowing need is $270 million. The financing plan is to pursue a federal TIFIA loan. There are three specific revenue sources planned to be pledged for repayment purposes: Gas Tax, Transportation Development Fees, and Utility Surcharge/Franchise Fees. The estimated annual debt service payment is $14 million per year. Costs estimating practices and guidelines City Manager Tandy stated the engineer’s estimating policy, established in the Caltrans Project Development Procedures Manual (CPDPM), updates unit pricing twice a year, and is validated annually by the Federal Highway Administration. At various stages of project development, safety contingencies that range from 5% to 50% of the cost estimates are required to be included. The right-of-way cost estimating, also established by CPDPM, requires safety contingency ranging from 20% to 25% with an additional 3% per year for project delays. Traditional cost for AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, July 29, 2013 Page 3 projects include environmental phase items, Right-of-way items, design/engineering items, and construction items. Recent actual bid results for two projects An analysis of recent projects indicates that CPDPM’s required estimate contingency is higher than the actual bid document requirements. As a result, savings are greater. Recent bids received for the State Route 178 Project and the State Route 58 project were approximately 19% and 6% below the engineer’s estimate. Committee member Maxwell asked what local benefits are associated with the construction of the Westside Parkway and the Centennial Corridor. He also requested staff provide commuter usage estimates at the next meeting. City Manager Tandy stated several benefits include relief of traffic on Rosedale Highway; reduction in pollution issues, as regional traffic will move through faster reducing pollution; safety improvements connecting Rosedale Highway with State Route 58; and reduction of traffic congestion on Rosedale Highway, Stockdale Highway, Coffee Road, Gosford Road, and Brimhall Road. Public Works Director Rojas added that several of the previously mentioned streets will see a significant improvement to traffic flow during high commuter hours. Kern COG director Hakimi stated there would be great improvement to the air quality. Kern County consistently does not meet several requirements of the Clean Air Act; the Centennial Corridor project will reduce the lengths of trips for all residents in Kern County. Funding options are lost when it cannot be collectively demonstrated that efforts are being made to comply with the air quality rules. The project also improves the level service of State Route 99 by removing trucks from the state route and providing a more direct alternate which also reduces the length and time of travel, therefore, reducing the impact to the air quality. Committee member Maxwell asked if any funding is lost if the modeling was inaccurate and commuter usage habits do not change or improve. Kern COG director Hakimi responded it was possible if traffic continued to be congested and there were a significant increase to air pollution. It can take several years to be able to adequately make this kind of determination. Committee member Maxwell also inquired if the County had provided the City any kind of documentation committing them to their contribution of $57 million. City Manager Tandy stated the Board of Supervisors had recently voted recommitting a $60 million contribution and requested their staff provide them an estimated timeline for when they would need to bond. No formal documentation has been received. Committee member Maxwell asked for additional information regarding the validation action process. City Attorney Gennaro stated the corporation is in the formation process. After a response is received from the Secretary of State, the corporation would then need to AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, July 29, 2013 Page 4 adopt bylaws. This is expected to be done at the first Council meeting in September. The City Council would then move to approve the form of the loan documents and direct staff to move forward with the validation action. This is expected to be presented to Council no earlier than the second meeting of September. Committee Chair Rivera asked why a TIFIA loan is preferred over an alternative funding source. Finance Director Smith stated a TIFIA loan is preferred due to its flexible as well as being less expensive. Committee Chair Rivera also asked why there are three specific revenue sources planned for pledging and what is the estimate annual repayment amount per year. City Manager Tandy stated both, public and private sector funding sources require an entity to identify revenue sources in order to analyze the ability to repay. The City can spend the pledged revenue sources annually when not needed for the bond repayment. Finance Director Smith stated the estimated annual repayment amount will total approximately $14 million. Committee Chair Rivera asked how pledging the three revenue sources affect regular street maintenance, curbs and gutters, resurfacing, etc. within the City limits. Chair Rivera also asked if any money from the General Fund is utilized to pay for TRIP projects. City Manager Tandy stated funding for street maintenance, curbs and gutters, resurfacing, etc. mainly comes from Federal grants, Capital Outlay funds, and the General Fund. Public Works Director Rojas stated revenues from the Transportation Development Fees and Utility Surcharge Franchise have been utilized since 2006- 2007 and 2008-2009 respectively to pay for the TRIP projects. Committee Chair Rivera asked staff to research previous practices to implement a Council contingency to assure future funding will be available for all street maintenance and improvements needs and report back to the Committee. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting adjourned at 1:25 PM cc: Honorable Mayor and City Council DOCUMENTS HANDED OUT AT THE COMMITTEE MEETING