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HomeMy WebLinkAbout11/24/2014 B A K E R S F I E L D Staff: Committee members: Chris Huot, Assistant to the City Manager Willie Rivera, Chair Ken Weir Terry Maxwell REGULAR MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Monday, November 24, 2014 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA 93301 First Floor, Conference Room A AGENDA 1. ROLL CALL 2. ADOPT AUGUST 25, 2014 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Continued Discussion regarding Funding for TRIP Projects – Fidler/Gennaro/ Smith 5. NEW BUSINESS A. Discussion regarding the Thomas Roads Improvement Program Name – Tandy B. Discussion regarding TRIP Right-of-Way - Smith C. Discussion regarding the General Fund Balance Policy – Smith 6. COMMITTEE COMMENTS 7. ADJOURNMENT B A K E R S F I E L D         /s/ Steven Teglia Committee Members: Staff: Chris Huot Willie Rivera, Chair Assistant to the City Manager Ken Weir Terry Maxwell AGENDA SUMMARY REPORT REGULAR MEETING OF THE BUDGET AND FINANCE COMMITTEE Monday, August 25, 2014 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 p.m. 1. ROLL CALL Committee members: Councilmember Willie Rivera, Chair Vice Mayor Ken Weir Councilmember Terry Maxwell City Staff: Alan Tandy, City Manager Steven Teglia, Assistant to the City Manager Virginia Gennaro, City Attorney Josh Rudnick, Deputy City Attorney Andy Heglund, Deputy City Attorney Nelson Smith, Finance Director Tera Loveless, Finance Accounting Supervisor Nick Fidler, Public Works Director Ted Wright, Assistant Public Work Director Kristina Budak, Thomas Roads Improvement Program (TRIP) Engineer Dave Hecht, Assistant Information Technology Director Jeff Shealey, Information Technology Network System Technician Others present: Theo Douglas, The Bakersfield Californian Chuck Dennis, KGET Joey Titus, City Resident AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, August 25, 2014 Page 2 2. ADOPT JULY 28, 2014 AGENDA SUMMARY REPORT The Report was unanimously adopted as submitted. 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Discussion and Committee Recommendation regarding the Local Vender Bid Policy - Smith Committee Chair Rivera requested this item be deferred to the next committee meeting. 5. DEFERRED BUSINESS A. Continued Discussion regarding Funding for TRIP Projects – Tandy/Smith Finance Director Smith provided the following responses to several questions made by Councilmember Maxwell regarding funding for TRIP projects at a previous meeting: 24th Street The total of expenditures incurred from July of 2013 to March of 2014 is $534,881. Actual costs expended through June 30, 2013 were $10,796,296 of which $5,734,313 was paid to Parsons for environmental work and $5,047,472 was paid to RBF Company for environmental work. The remaining balance of $14,511 was paid to other miscellaneous vendors for supports costs related to the environmental study like printing, public advertising, etc. Future years estimated cost of $32,800,00 is for construction. The cost of landscaping is included in the estimated cost of construction and is estimated to be $2 million. The long term expense to maintain landscaping is difficult to estimate because it has not been designed. Based on current concept ideas, Parks staff roughly estimates the annual maintenance cost to be $13,000 per year. Centennial Corridor The total of expenditures incurred through June 30, 2013 is $46,506,041 for environmental and design work. Of which $37,217,231 was paid to Parsons for environmental and advanced preliminary engineering work and $9,090,882 was paid to HNTB Company for environmental work. The remaining balance of $194,928 was paid to other miscellaneous vendors for support costs related to the project. Expenses incurred from July 1, 2013 through March 25, 2014 is $6,005,486 for environmental and design work. The future years estimated cost is $344,051,525. Of which $321,604,203 is for construction and the remaining balance of $22,447,502 for design and right-of-way. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, August 25, 2014 Page 3 Funding Sources Three revenue streams proposed for future debt obligation related to completion of the TRIP projects are the Gas Tax, Transportation Impact Fees, and Utility Surcharge funds. These funds have been spent on either road maintenance or road construction. Staff would propose that over the next three years these funds be used for local matching requirements associated with the TRIP program projects. The chart below summarizes the revenues received over the past three years: Actual Actual Actual Source 2010-11 2011-12 2012-13 State Gas Tax Revenues 8,255,992 9,257,404 7,445,569 Transportation Development Fee 6,897,147 10,159,883 16,783,185 Utility Surcharge /Additional Franchise Fees 4,493,024 4,633,602 4940,134 Total Summary of Road Funds 19,646,163 24,050,889 29,168,888 A graph displaying a ten year history of the same funding sources was also presented. Finance Director Smith also stated that KernCOG had increased their contribution to the TRIP Program to $33 million. The County of Kern also approved to contribute $40 million to the TRIP program this year. City Manager Tandy stated four bids were opening over the next few months and staff would be able to will re-calculate the estimate future borrowing needs of the City shortly thereafter. Finance Director Smith stated they would utilize the cost estimates in those bids to re-calculate the projected costs of the other projects and the balance of the remaining federal monies available. Committee member Maxwell asked what was causing the increase in transportation fee revenues. Finance Director Smith stated residential and commercial development is the main source. Public Works Director Fidler stated that transportation fees are paid at the time residential permits are issued and that there has been a significant increase in the number of permits issued. Committee member Maxwell asked if there were any projections on how an increase of solar panel installation projects would affect the utility surcharge revenues. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, August 25, 2014 Page 4 Finance Director Smith stated he did not have any projections but that it may not have an effect on the utility surcharge revenues as it could be offset with any increases PG&E may impose on their overall customer base. Committee member Maxwell asked if any portion of the $165 million available for right-a-way and acquisitions for the Centennial Corridor was being used for any other project. Finance Director Smith stated the $165 million was exclusively for the Centennial Corridor project and would not be used on any other project. Committee member Maxwell asked if the City had received funding from the Federal Government to begin the right-of-way portion of the 24th Street project. City Manager Tandy stated the City had received that funding. Committee member Maxwell asked if the estimated $2 million budgeted for the cost of landscaping on the 24th Street project was enough to construct what has been previously proposed to the surrounding residents. Public Works Director Fidler stated the street layout was currently being developed. After its completion, several community meetings will be held with the residents to discuss the landscape standards. City Manager Tandy added that the same landscape designer who provided the renderings during the environmental process would also be used for this phase of the project. Committee member Maxwell asked to be provided with a total cost estimate to expand 24th Street, between M and F Streets, from two lanes to four lanes. The cost estimate is to include costs for resurfacing and leveling 24th Street, correcting any drainage problem, and should be prepared as if this was an isolated project. Committee member Maxwell than asked when the $33 million contribution from KernCOG would be received. He also asked how the City would be funding the Hosking Road project. Finance Director Smith stated it would be received during KernCOG’s 2016 State Transportation Improvement Program (STIP) cycle. City Manager Tandy stated the Hosking Road project was fully funded with local revenues which were budgeted in the 2014-15 fiscal year. Committee member Maxwell asked how much local revenues from the three revenue streams discussed above, were being allocated towards the 24th Street project, the Centennial Corridor project, and other projects. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, August 25, 2014 Page 5 Finance Director Smith stated that not a significant amount local funding has been utilized on TRIP projects. He stated that the majority of revenues budgeted every year are spent on several non-TRIP related projects including road maintenance and street resurfacing. Mr. Smith provided the following example of what future funding needs will be needed: the estimated cost for the 24th Street project is $25 million of local funding and is expected to be completed in two years. Therefore, $12.5 million of local funding would be needed for each year for two years. City Manager Tandy stated that at least $25 million a year would need to budgeted for 24th Street and Centennial Corridor projects. Although, recent costs estimates have lowered the projected funding amounts to between $14 million and $19 million. The projected borrowing amount has also been lowered to $240 million. That amount could decrease if future bids continue to show a decrease in costs. Committee member Maxwell expressed concern stating that those costs could increase, resulting in an increase to the borrowing amount. He was also not in favor of decreasing funding for local projects because it could result in poor street conditions. Mr. Maxwell also asked if the $40 million contribution from the County of Kern would be used for non-TRIP projects and if the City Council would be made aware of what that funding was used for. City Manager Tandy stated that the $40 million contribution would not be used on non-TRIP projects. Finance Director Smith stated that the contribution would need to be appropriated for a particular project by the City Council. It would appear as an item on the consent calendar portion of a City Council meeting agenda. The administrative report would provide bid award information, as well as the appropriation amount and sources. City Manager Tandy stated it could appear in the next budget cycle or the mid budget cycle if a project is progressing quicker than expected. Committee member Maxwell asked if he could be provided with a list of expenditures and their total costs associated with a project that would require repayment to the Federal Government if the City determined it were unable to continue construction on it. City Manager Tandy stated there are several bases for a granting agency to ask for projects to be refunded if they are not completed. Unfortunately, there are no exact circumstances to determine what would require a refund or not, it would be considered on a case by case basis. He stated that without knowing the technical basis for terminating a project, it would AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, August 25, 2014 Page 6 be difficult to prepare a report describing the costs the City would incur for terminating it. Committee Chair Rivera asked if the $35 million budgeted for the environmental phase of the Centennial Corridor project was spent on the environmental impact report. City Manager Tandy stated that the budgeted amount also included costs of several support studies. City resident Joey Titus had several questions for staff which were handled through a sidebar at the adjournment of the meeting. 6. COMMITTEE COMMENTS None 7. ADJOURNMENT The meeting adjourned at 12:50 p.m.