HomeMy WebLinkAbout02/07/2000 BAKERSFIELD
Patricia J. DeMond, Chair
Mike Maggard
Mark Salvaggio
Staff: Darnell Haynes
SPECIAL MEETING NOTICE
BUDGET AND FINANCE COMMITTEE
of the City Council - City of Bakersfield
Monday, February 7, 2000
12:00 noon
City Manager's Conference Room
Second Floor- City Hall, Suite 201
1501 Truxtun Avenue, Bakersfield, CA
AGENDA
1. ROLL CALL
2. APPROVAL OF DECEMBER 20, 1999 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS
A. UPDATE AND POSSIBLE COMMITTEE RECOMMENDATION REGARDING REQUEST
FROM KERN COUNTY FOR AIRPORT TERMINAL FUNDING
B. DISCUSSION AND POSSIBLE RECOMMENDATION REGARDING PROPOSAL
RECEIVED FROM DAVID TURCH AND ASSOCIATES, WASHINGTON D.C. LOBBYIST-
Rojas
5. NEW BUSINESS
A. DISCUSSION AND RECOMMENDATION REGARDING ACCEPTANCE OF THE 1998-99
CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS FINANCIAL
STATEMENT - Rojas
B. DISCUSSION REGARDING THE EQUIPMENT MANAGEMENT FUND - Rojas
C. DISCUSSION AND RECOMMENDATION OF FY 2000- 01 COMMUNITY DEVELOPMENT
BLOCK GRANT (CDBG), HOME AND EMERGENCY SHELTER GRANT (ESG) ANNUAL
SPENDING PLAN - Wager
D. SET FUTURE MEETING DATES - Haynes
6. ADJOURNMENT
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DRAFT
BAKERSFIELD
~~'~~ Patricia J. DeMond, Chair
Alan Tandy, Cit~, ~ger Mike Maggard
Staff: Darnell Haynes Mark Salvaggio
AGENDA SUMMARY REPORT
SPECIAL MEETING
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
12:00 p.m.
City Manager's Conference Room
1. ROLL CALL
Call to Order at 12:05 p.m.
Present: Councilmembers: Patricia J. DeMond, Chair; and Mark Salvaggio
Mike Maggard arrived at 12:10 p.m.
2. ADOPT OCTOBER 13, 1999 AGENDA SUMMARY REPORT
Adopted as submitted with one typographical correction. Strike the words "City Attorney Alan
Tandy" and replace with "City Manager Alan Tandy."
3. PUBLIC STATEMENTS
None
4. DEFERRED BUSINESS
A. UPDATE AND POSSIBLE COMMITTEE RECOMMENDATION ON AGREEMENT AND
SECOND DEED OF TRUST wITH THE BAKERSFIELD MUSEUM OF ART
Approximately a year ago a request was received from the Museum to review the agreement that
had been entered into between them and the City. They were interested in a major expansion at
a cost of approximately $2 million. The reverter clause in the agreement was preventing them from
securing financing. City staff work with Museum staff and reached an acceptable alternative to
include language involving a second trust deed with the City having the first right of refusal. With
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
Page -2-
that came the issue of an appraisal should the City decide to exercise its option. Initially it was
proposed there would be three appraisals done, one at the cost of the City (Beneficiary), and two
at the cost of the Museum (Trustor), but the option of which appraisal would'be used was left open.
Museum representatives expressed concern if you have three appraisers and they cannot agree,
whose appraisal would be used. Through Mr. Werdel it was proposed if the three appraisers
cannot agree that we would use the middle appraisal and the high and Iow appraisals would be
discarded.
Before the Committee could meet on this issue, Mr. Werdel sent the City a letter dated December
15th with another alternative. This second alternative incorPorated language in the event the
Beneficiary and Trustor are unable to agree on the selection of an appraiser.
The City Attorney's Office reviewed both proposals and indicated either one is acceptable. In
further explanation, the second alternative includes language that as long as the difference in the
two appraisals does not exceed 5%, the purchase price shall be an average of the two. If the
difference exceeds 5% of the lower of the two appraisals, the two appraisers shall select a third
appraiser and that appraisal shall be the purchase price..
After discussing the proposals from the Museum, the Committee unanimously recommended
accepting the second alternative and forwarding it to the Council for approval Committee Chair
DeMond.thanked everyone for all the hard work that staff, the Museum and the Committee
contributed to resolving this issue.
5. NEW BUSINESS
A. DISCUSSION REGARDING THE CITY OF BAKERSFIELD INVESTMENT POLICY
The City modified its Investment Policy some time ago which placed lower caps on the
percentages invested, as well as restricting the type of investment. These restrictions currently
hamper the City Treasurer from maximizing interest earning rates. Staff is requesting the following
changes:
1. Current - Obliqations issued bv the United States Government Agencies:
"At the time of purchase no more than 10% of the portfolio may be invested in any
single agency name."
Recommendation - 10% be increased to 20%.
2. Current. Repurchase Agreements (Commonly Called Repos):
"The maturity of Repos shall not exceed 30 days."
Recommendation - 30 days be increased to 90 days.
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
Page -3-
3. Current. Local Agency Investment Fund (State Local Investment Pool)'
"Investment may be up to the maximum permitted by State Law or 30% of the portfolio
whichever is less."
Recommendation - 30% of the portfolio whichever is less be changed to 40%.
4. Current - Time Certificates of Deposit (-rCD's):
"No more than 30% of the portfolio may be invested in this category."
Recommendation - No more than 30% of the portfolio may be invested in this category
be.changed to 40%.
5. Current - Mutual Funds:
"No more than 15% of the portfolio may be invested in-this category."
Recommendation - No more than 15% of the portfolio may be invested in this category
be changed to 20%.
6. Current - Fireman's Disability Retirement Fund:
"Up to 25% of the retirement fund may be invested in securities of a single agency of
the four triple A rated United States Government agencies authorized in this policy."
Recommendation - Up to 25% of the retirement fund be changed to 40%.
In many instances, the requested percentage changes are still more restrictive than what is
currently allowed in the State Government Code.
In response to a question regarding our cash investments and if the City has any protection, Bill
Descary responded that we are protected in terms of the rating. All four federal agencies listed
in the Policy used by the City have a triple A rating. For large CD's we revert to collateralization,
which is required by the State Government Code.
After discussion about the concentration of risk and protection, the Committee unanimously.
approved staff's requested changes be forwarded to the Council for adoption.
B. DISCUSSION AND POSSIBLE RECOMMENDATION REGARDING THE CITY OF*
BAKERSFIELD SELECTING A SINGLE INVESTMENT FIRM FOR CUSTODY OF CITY
INVESTMENTS
This item was referred to the Committee at the request of Council member Couch concerning why
the City does not use one custody agent, as does the County. Mr. Klimko explained the City's
Investment pool is $100,000,000 versus the County's pool of approximately $1 billion, allowing
them to absorbs wire transfer and other administrative costs with minimal impact. The three banks
with whom the City has custody agreements provide their service free of charge.
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
Page -4-
Due to a change in the State Government Code, it was necessary for the City to secure a
separate custody agreement to handle other securities that are not dealt with through our existing
agreements. To channel all of our transactions through one institution would require an increased
internal workload, as well as additional administrative costs.
As part of this issue, Committee Chair DeMond stated there also was concern in not placing our
business with local banking institutions. Bill Descary responded that while two of the three banks,
Bank of Amedcan and Union Bank of California have a local presence, all of their corporate trust
departments are located in a major city, e.g., Los Angeles and San Francisco. Even by utilizing
one institution, the actual trust work would still be handled outside of Bakersfield.
The Committee directed staff to reflect in the minutes how the concerns were addressed.
C. DISCUSSION AND POSSIBLE RECOMMENDATION REGARDING PROPOSAL
RECEIVED FROM DAVID TURCH AND ASSOCIATES, WASHINGTON D.C. LOBBYIST
Alan Tandy stated that at the Council goal setting session, strong emphasis was placed on street
work and the need for more funding. In 1999 grants and internal fund transfers were utilized to
address part of that need. While the Council has seldom retained a lobbyist, staff suggested
utilizing a single-purpose lobbyist. In the current budget $50,000 has been set aside for this
purpose.
Raul Rojas said the next STP Federal money cycle is in 2002. In order to get the Cityls projects
in line, the groundwork needs to be started soon. Generally Federal dollars are allocated to the
State and redirected. The idea is to get a project attached to funding at the Federal level. Staff
has researched and recommends a lobbyist the City could obtain for a $30,000 annual fee.
Committee member Salvaggio indicated he was not in favor of hiring a lobbyist. As non-partisan
local government, we should be able to access both Congressman Dooley and Thomas for
assistance in connection with such matters. Council and staff could redouble efforts in this regard.
Mr. Salvaggio also requested that meetings be scheduled on a regular basis with our district
representatives.
Committee Chair DeMond had additional concerns. Staff needs to check the manner in which any
lobbyist conducts business. We have had fairly good results from working with our State
representatives and should be working on the same type of relationship with our elected officials
on the national level.
Due to the Committee's concerns, and as he is undecided, Committee member Maggard
requested staff'to explore whether a lobbyist could be hired on a contingency basis. The matter
was deferred to another meeting.
DRAFT
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
Page -5-
D. DISCUSSION AND POSSIBLE RECOMMENDATION REGARDING EXCESS FUNDS
FROM WILSON PARK PLAYGROUND EQUIPMENT PROJECT
(This item heard first to accommodate attendees)
Approximately $114,500 of Community Development Block Grant (CDBG) funds from project
savings were reallocated to be used for Wilson Park improvements and playground equipment.
There will be funds remaining after the completion of that project in February 2000. Committee
member Salvaggio requested that such funds anticipated to be $25,000 to $30,000 be used for
related purposes in Planz Park.
The estimate for Planz Park will require additional funds which will be addressed during the FY
2000 -01 budget proceedings. The Committee directed staff to start the amendment process
(Council member Maggard was absent for this item).
E. DISCUSSION OF FINANCIAL REPORTS: CITY OF BAKERSFIELD COMPREHENSIVE
ANNUAL FINANCIAL REPORT CONTENT/ACCOUNTING POLICY PROCEDURES AND
BAKERSFIELD CENTENNIAL GARDEN AND CONVENTION CENTER FINANCIAL
STATEMENTS AND AUDITOR LETTERS
The City uses governmental accounting standards for its audit and Ogden Entertainment uses
private sector accounting standards for their audit. Private sector standards adjust revenues to
the time frame in which the service is provided. The City's accounting methodology treats them
on a cash basis, which puts revenues into the time frame corresponding to when the money is
received, as opposed to when the service is provided. There is agreement on cash balances, the
amount of Ogden's incentive, and the interpretation as it relates to the incentive. Staff prOposed
exchanging a letter of understanding with Ogden acknowledging the differences and stating both
parties use the appropriate accounting standards and agree on the contract issues. Committee
member Maggard reiterated he does not think it is of any consequence that they do not match and
there is no reason to reconcile the two financial statements.
Gregory Klimko stated that his concern had to do with the public's perception. This in not a one-
time occurrence as there's going to be a difference in the timing of revenue recognition every
year. Mr. Paulden on behalf off Ogden believes the issue has been addressed, been disclosed
and and is understandable. The only way to eliminate the difference is for the City to change it's
accounting method. There are pros and cons on reporting this as a government fund or on a
proprietary (enterprise)basis.
Committee member Maggard said he wanted to discuss the issue of handling this as an enterprise
fund. It may be that municipalities will be required to report all of their operations by taking into
account matching .the debt service and depreciation that goes along with an activity. These are
two of the main components that affect whether this is governmental fund accounting or enterprise
fund accounting. His current concern is that in reviewing our financial statements, the public will
believe we operate the Garden at about a $300,000 loss. He feels it should be made clear there
is approximately $2 million in annual debt payments (principal and interest), which will be shown
in the Transportation Occupancy Tax (TOT) fund until the debt is retired.
D AFT
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
Page -6-
The original facility, the Convention Center, was built with general obligation bonds. The
operations of the facility were accounted for in the General Fund. This practice could have been
continued, but in this current year a TOT fund was established where revenues and expenses of
Centennial Garden are recor~led in addition to TOT revenue and related expenses.
There was some discussion regarding the accounting/reporting for the operations of Centennial
Garden. It is known that such facilities provide a community service but do not generate sufficient
income for debt service and depreciation. Staff suggested an enterprise fund would be
appropriate if the Council chooses to set aside monies to cover the annual depreciation from
general revenues.
Committee Chair DeMond stated that during the public/council budget review, it is evident a good
portion of the total annual debt is effectively serviced by Redevelopment monies. She questioned
that if an enterprise fund is set up but monies are not allocated to cover depreciation, it could also
be construed as being misleading.
The Committee will continue to discuss accounting standards and the City's depreciation reserve
policy and deferred the.matter to another meeting..
Gregory Klimko stated that related to the Comprehensive Annual Financial Report (CAFR), this
is the last year of a five-year contract with the current auditing firm. In the past staff have sent
cards to all the CPA's in town asking for a response if they were interested, and sent them out a
packet. Then staff would review the proposals, conduct interviews, and make a recommendation
to the Council for their approval. The Committee recommended staff to go forward with the audit
firm search.
The Committee requested future CAFR's (Comprehensive Annual Financial Report) be reviewed
by Budget and Finance Committee pdor to being forwarded to the Council for approval. Sufficient
time should be allowed to meet state mailing requirements. The Committee recommended the
CAFR be forwarded to the Council for acceptance.
6. ADJOURNMENT
The meeting was adjourned at 1:33 p.m.
Staff'present: City Manager Alan Tandy; Assistant City Manager Alan Christensen; City Attorney Bart
Thiltgen; City Treasurer Bill Descary; Assistant to the City Manager Darnell Haynes; Public Works
Director Raul Rojas; Community Development Coordinator George Gonzales; Finance Director Gregory
Klimko; Recreation and Parks Director of Operations Greg Cronk; Recreation and Parks Business
Manager Jane Gardner; Public Works Fleet Superintendent Emie Medina; and Public Works Operations
Manager Joe Lozano;
Others present: Jim Foss, Executive Director, Centennial Garden; Steve Womack, Director of Finance,
Centennial Garden; Andy Paulden, Brown Armstrong; Charles Meyer, Bakersfield Museum of Art;
Attorney Terrence Werdel, Bakersfield Museum of Art; and Gene Tackett, Bakersfield Museum of Art.
DRAFT
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Monday, December 20, 1999
Page -7'-
cc: Honorable Mayor and City Council
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S:/Damell/B Fggdec20summary.wpd
TALKING PAPER
ON
Bakersfield Municipal Airport, L-45
10 January, 2000
This paper formulates an outline for discussions between the County and the City regarding
the City's transfer of Municipal Airport to Kern County.
· The County has asked the City to participate in financing the new Meadows
Field terminal scheduled for 2003/4.
Current financing plans commit the County to $9M, and the FAA participation
is estimated at over $1 OM. The County has asked the City to participate with a
$3M contribution. Currently, we estimate that more than 60% of all BFL
travelers are Bakersfield City residents, or business travelers doing business
within the City.
The Chairman of the BOS letter dated October 12, 1999, to the City Council asks the
decision be rendered NLT 1 March 2000. The City asked the County to consider
assignment of the Bakersfield Municipal-Airport as a part of the overall package.
Areas of discussion:
· Terminal update and financing.
· What happens if the bids come in below estimates? Rebate to the
percentages, i.e., and 75% -25%.
· Shared financing. Bond origination cost savings for City approximate
$150,000.
· Financial liability of Municipal Airport.
· We estimate current operations at minus $57,000 annually. We estimat~
that $-32,000 of this amount is covered by interest from the $500,000
balance. The remaining $25,000 of loss is uncovered operational losses.
· Clear audit difficult. However, estimate that Kern County Airports could
operate Municipal Airport more efficiently, (economies to scale) for
approximately $-20,000 annually. Naturally, the $500,000 would be
consumed for the terminal'.
· Maintenance backlog approximates $28,000.
· Safety concems
· Cultural. FAA violations. HAP, liability issues.
· Historically, a very dangerous airport.
· Could become near-term volatile issue. Like annexation.
· Infrastructure. ILS crossing traffic, huge liability. Long term strategy is
closure.
.. · Could become a long-term volatile issue. Like annexation
·Local, FAA (2016) and AOPA resistance.
· Final decision is a political decision. Clearly, an unpopular move because of
enforced discipline, and long-term closure.
Need a decision prior to I March 2000. Architectural design at the commitment point.
Asking for a City Council vote in February.
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
January 7,2000
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM' ALAN TANDY, CITY MANAGER/~ '~
SUBJECT: AIRPORT TERMINAL FUNDING REQUEST UPDATE
Copies of past communications on this issue, dated August 27, 1999, September 1, 1999,
and September 24, 1999 are enclosed as background information, along with a letter to
Council from the Board of Supervisors, dated October 12, 1999.
New information, updates, and comments follow:
.,County Budget Information
Please see the attached memo from John Stinson. It appears that the tobacco payment
of $9.24 million will be received by the County between February and June of this year~
and that legislative efforts to restrict use of the money have failed. The County will then
receive $8 million in unrestricted funds each year thereafter. The County also received
$1.5 in 'ERAF payments. Based on today's oil prices, they stand to do very well next year,
generating seemingly millions to their General Fund. See the attached memo from John
Stinson.
.City Demands for Capital
When the County was previously asked why they did not use the tobacco money for the
airport, they indicated:
1) they had not yet received it;
2) efforts were being made to restrict its use, and
3) they had massive needs in other areas for capital projects.
It appears the money will be received very shortly, unrestricted. We have also run a list,
copy attached, of some $260 million dollars in real capital needs of the City. Among the
many are no money for street repair (we have loaned out our future gas tax for five years),
Honorable Mayor and City Council
January 7, 2000
Page 2
the-Fairfax Interchange, White Lane bridge widening at 99, many traffic signals, Hageman
flyover, beautification of medians and entrances to the City, and fire station construction.
A memo summarizing some of these needs is attached.
.Traded Off Benefits
In the past, staff and councilmembers have raised the question of"trading off" on projects
benefitting the metro area. If the City should pay $3.0 million for the terminal, perhaps the
County should pay for major needs that the City handles, which benefit County residents
outside the City - Centennial Garden, a new-stadium, the Hageman fly over, etc.
So far, we have not received a positive response to such inquiries. Nonetheless, we
mention a new one.
The City and County each have 50% responsibility to cap the Panorama .Landfill. It may
run $5.0 million to $7.0 million each.
If the County billed Bakersfield for commercial garbage on a tonnage basis, which is done
for another Kern County city, the City would have a revenue stream to pay its share of that'
common problem. Since the billing would be for actual use, it seems a simple enough, yet
meaningful, reciprocal action, should we help finance the terminal.
City Financial Position
Our position too, has improved since September. We received $714,000 in booking fee
reimbursement and $512,000 in .ERAF funds and some other revenues, year to date,
exceed budget projections. Because of the extremely critical nature of the budget and gas
tax loan leaving no street repair money for five years, staff is preparing a recommendation
to substitute these funds for the loan, so that we will maintain road repair monies in future
years.
Summary
None of this information means that we can not, or should not, make a contribution to the
terminal project. Certainly, there are benefits to the City and our economic development
efforts, community pride, symbolism of intergovernmental cooperation, and other factors,
as well.
Honorable Mayor and City Council
January 7, 2000
Page 3
The County has, to date, asked for $3.0 million without the City Airpark and Airpark Fund
balance transfer.
City Staff recommended, prior to the new information above, a total of $1.5 million, plus the
Airpark and Airpark Fund balance transfer of $500,000. City Council's discretion ranges
from letting the County handle it, to the full $3.0 million requested. The issue is before the
Budget and Finance Committee.
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
January 7,2000
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: ALAN TANDY, CITY MANAGER /~ ~
SUBJECT: AIRPORT TERMINAL FUNDING 'REQUEST UPDATE
Copies of past communications on this issue, dated August 27, 1999, September 1, 1999,
and September 24, 1999 are enclosed as background information, along with a letter to
Council from the Board of Supervisors, dated October 12, 1999.
New information, updates, and comments follow:
County Budget Information
Please see the attached memo from John Stinson. It appears that the tobacco payment
of $9.24 million will be received by the County between February and June of this year,
and that legislative efforts to restrict use of the money have failed. The County will then
receive $8 million in unrestricted funds each year thereafter. The County also received
$1.5 in ERAF payments. Based on today's oil prices, they stand to do very well next year,
generating seemingly millions to their General Fund. See the attached memo from John
Stinson.
City Demands for Capital
When the County was previously asked why they did not use.the tobacco money for the
airport, they indicated:
1) they had not yet received it;
2) efforts were being made to restrict its use, and
3) they had massive needs in other areas for capital projects.
It appears the money will be received very shortly, unrestricted. We have also run a list,
copy attached, of some $260 million dollars in real capital needs of the City. Among the
many are no money for street repair (we have loaned out our future gas tax for five years),
Honorable Mayor and City Council
January 7, 2000
Page 2
the Fairfax Interchange, White Lane bridge widening at 99, many traffic signals, Hageman
flyover, beautification of medians and entrances to the City, and fire station construction.
A memo summarizing some of these needs is attached.
Traded Off Benefits
In the past, staff and councilmembers have raised the question of "trading off" on projects
benefitting the metro area. If the City should pay $3.0 million for the terminal, perhaps the
County should pay for major needs that the City handles, which benefit County residents
outside the City - Centennial Garden, a new stadium, the Hageman fly over, etc.
So far, we have not received a positive response to such inquiries. Nonetheless, we
mention a new one.
The City and County each have 50% responsibility to cap the Panorama Landfill. It may
run $5.0 million to $7.0 million each.
If the County billed Bakersfield for commercial garbage on a tonnage basis, which is done
for another Kern County city, the City would have a revenue stream to pay its share of that'
common problem. Since the billing would be for actual use, it seems a simple enough, yet
meaningful, reciprocal action, should we help finance the terminal.
City Financial Position
Our position too, has improved since September. We received $714,000 in booking fee
reimbursement and $512,000 in ERAF funds and some other revenues, year to date,
exceed budget projections. Because of the extremely critical nature of the budget and gas
tax loan leaving no street repair money for five years, staff is preparing a recommendation
to substitute these funds for the loan, so that we will maintain road repair monies in future
years.
Summary
None of this information means that we can not, or should not, make a contribution to the
terminal project. Certainly, there are benefits to the City and our economic development
efforts, community pride, symbolism of intergovernmental cooperation, and other factors,
as well.
Honorable Mayor and City Council
January 7, 2000
Page 3
The County has, to date, asked for $3.0 million without the City Airpark and Airpark Fund
balance transfer.
City staff recommended, prior to the new information above, a total of $1.5 million, plus the
Airpark and Airpark Fund balance transfer of $500,000. City Council's discretion ranges
from letting the County handle it, to the full $3.0 million requested. The issue is before the
Budget and Finance Committee.
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
January 6,. 2000
TO: Alan Tandy, City Manager
FROM: John W. Stinso~stant City Manager
SUBJECT: Update on status of Kern County .budget revenues
This memo is to provide you with updated information on the status of Kern County budget
revenues for the current year as well as the upcoming 2000-01 fiscal year. There are several
significant increases in county revenues that you should be aware of.
In the current year .the County will receive an additional $1.5 million as part of the ERAF relief
included in the state budget package as part of AB 1661. I am not aware if the county has
appropriated these funds for any purpose yet since they were approved by the state at the end of
last fiscal year and the first portion of the payment was transmitted to local government by the
state on September 16. The second portion will be released to the County by February 1. 2000.
These funds are unrestricted as to their use and are essentially a return of property taxes captured
by the state to fund educational programs. It should be noted that counties had a larger share of
property taxes taken than cities by the state, however they also received a much larger share
(95%) of Proposition 172 Sales tax thnds than cities which were intended to offset the impacts of
the state capture.
In addition to these funds. I have received information regarding the tobacco settlement from the
State Attorney General's Office. The tobacco settlement was finalized on November'l 2. 1999
with court approval of the agreement by 45 states. This resulted in the tobacco companies
beginning to make payments to the states in December 1999. The Attorney General's Office
explained that California has already begun to receive payments. Pending a court ruling
regarding the interpretation of the IVlOU scheduled for January 18.2000 related to distribution of
the funds and approval of a resolution by the County Board of Supervisors to receive.the funds.
payments will begin to be made to the County. The Attorney General's Office does not expect
any issues with the interpretation of the MOU and also noted that there are currently no
restrictions on how the funds may be used. that' it is up to each county. Several pieces of
legislation were introduced to restrict the uses of these funds, however, none were approved by
the legislature. As indicated in the Legislative Analyst's report, the county anticipates receiving
approximately $9.24 million on or before June 30. 2000 and approximately. $8 million each year
for the next 20 to 25 years. The county has not committed any of these funds that I am aware of
as .of this time.
The League of California Cities is working to access a share of the Tobacco settlement for cities.
However, in my discussion with the City Manager of Coalinga who is heading up the effort, it
was his opinion was that any monies that cities would receive would have' to come from the state
share of the settlement not from the county share because of the structure of the settlement MOU.
Therefore. the League's efforts are focused on getting the state to distribute some of their share
of the tobacco settlement to cities. Any monies coming to cities (other than the four large cities
included in the settlement MOU) would have to be granted by the state or individual counties. It
is highly unlikely that either the state or counties will willingly share any of these proceeds with
cities.
Another revenue area of significance for the county is the likely increase in property tax revenues
resulting from notable increases in the price of oil and the associated increase in oil extraction
and related activities. I have attached a chart from the Kern County Assessors office showing
the increases in oil prices over the past year. The price has more than doubled since last March
from $9.00 to 19.75 per barrel in December. While the property tax levy is based upon the price
ofoil on the lien date in March and a complex formula that includes averaging benchmark crude
prices, factoring in oil price trend data. and expected development and exploration activities, it is
clear that there is an upward trend in oil prices and in development actNity spurred by the
increase in price. Since oil revenues make up approximately 31.5% of the County's assessed
valuation, this upward trend will have a considerable impact on County property tax revenues in
the upcoming fiscal year..The County estimated approximately $105 million in property tax
revenue for the current fiscal year. Even a~modest increase in oil prices could generate several
million dollars in additional county funds which would be unrestricted in their use. Once the
price is set this March it will be possible to gain a more clear estimate of the amount of increased
revenue that would be generated. Since the City of Bakersfield has very little oil producing
properties within our jurisdiction we will not experience an equivalent increase in our property
tax revenues.
I have also provided for your information, a fact sheet from.the Cotinty Web site which explains
the sources of county budget ftmding including the distribution of property taxes among local
agencies.
,,Assessor - Information Page ~vysiwyg://3 I/http://~wwv.co.kern.ca.us/assessor/crude.htm
Onh: ., ;i'ssessor County
Kew River Current Price: $ ].9.75 peri*bi
Kern River 13° Crude
A~eF~ce Price per bbl
· ' ' Jamua~ I tham December 31, 1999 :.. ·
1-4 to 1-6 $ 7.00 3 21.00
1-7 to 1,lO $ 750 4 30.130
1-I1 to 1-12 $ 7.75 2 15.50
1-13 to 1-25 $ 7.25 13 94.25
1-26 to 2-24 $ 7.00 30 210.00
2-25 to 3-3 $ 7.50 7 52.50
3-4 to 3-8 $ 8.00 5 40.00
3/9 $ 8.50 1 8.50
3-10 to 3-16 $ 8.75 7 61.25
3-17 to 3-21 $ 900 5 4500
3-22 to 3-28 $ 9.50 7 66 50
3-29 to 4-4 $ 9.75 7 68 25
4-5 to 4-15 $ 10.25 11 112.75
4-16 to 4-18 $ 10.75 3 3225
4-19 to 4-21 $ I1.25 3 3375
4-_.~ to 4-29 $ 11.75 8 94.00
4-30 to 5-11 $ 12.25 12 147.00
5-12 to 5-17 $ 11.75 6 7050
5-18 to 5-31 $ 11.25 14 157.50
6-1 to 6-6 $ 10.50 6 63.00
6-7 to 6-10 $ 11.00 4 44 iq0
6-11 to 6-29 $ 11 50 19 21:8.50
7-2 to 7-8 $ 12.75 7 8925
7-9 to 7.15 $ 1325 7 . 92.75
%16 to 7-19 $ 13.75 4 5500
7-20 to 7-22 $ 1~.~..., 3 39.'75
%23 to 7-28 $ 14.00 6 84.00
7-29 to $-5 $ 14.50 8 116.00
8-6 to 8-10 $ 14.75 5 '73.75
8-30 to 9-6 $ 15.75 $ 126.00
9-7 to 9-$ $ 16.50 2 33.00
9-9 $ 17 00 1 I 7.00
9-10 to %12 $ 17.50 3 5250
9-13 to 9-15 $ 18.00 3 54.00
9-16 to 9-22 $ 18.50 7 129.50
9-23 to 113-3 :I; 1900 11 209.130
10-4 to 10-5 $ 18.50 2 3700
10-6 $ 1825 1 18.25
10-7 $ 17.75 1 17.75
10-3 to 10-11 $ 1650 4 66.00
10-12 $ 1700 1 17.00
10-13 to 10-27 $ 17.50 15 262.50
10-29 to 11-3 $ 1675 7 117.25
11-4 to 11-8 $ 17.25 5 56.25
11-9 $ 1800 1 1800
I 1-10 to 11-11 $ 1850 '2 37.00
11-12 to 11-15 $ 1900 4 7600
1-17 to 11-21 $ 20.25 5 101.25
11-30 to 12-5 $ 19.75 6 118.50
12-6 to 12-9 $ 2050 4 82.00
12-10 to 12-14 $ 19.50 5 97.50
12-15 $ 2 ] 00 1 20 00
12-16 to 12-21 $ 20.50 6 123.00
12-22 to 12.27 $ 20.00 6 120.00
12-2.~ to 1,,-.;9 $ 20 53 2 41 00
~7_..,, ~0., days = $13.3q average pnce perbbl- 1999
I of 2 I/6/00 8:26 AN
,,AssesSor- Int'ormation Page xvysiwyg://3 l.'http://www.co.kern.ca.us/assessor/crude.htm
Back to [tome Pate
2 o1'2 I/6/00 8:26 Akl
SOURCES OF BUDGET FUNDING
The County budget is financed from local property taxes; State and federal funds; and other
revenues and funds, which include service fees and charges, other taxes, and the unspent fund
balances from the prior year. The largest source of income is State Aid; however, most of the money
received from this source is "earmarked" for specific programs, as is most of the funding received
from the federal government. In addition, increasing State and federal mandates have continued
to consume more and more local tax dollars and other revenues available to local government. The
amount of the County Budget over which the Board of Supervisors has total spending discretion
remains historically Iow as depicted in the chart below.
Program Specific vs. Discretionary Use Funds
FY 1999~2000
8oo $768.2 $811.2
$662.5 $682.5 $699.7
~ $621.7
u_ 600
O
400
0
._~ ~00
0
94-95 95-96 96-97 97-98 98-99 99-2000
FISCAL YEAR
Property Taxes - Estimated property tax collections for FY 1999-2000 wilt fund approximately
13.0% of the Budget. The County Assessor annually determines the value of'property in Kern
County- mainly real estate property such as land, oil fields, and buildings- which are taxed at one
percent of the market value. As illustrated in the following graph, the resulting tax revenue is shared
by all local taxing agencies, including school districts, cities, special districts, and the County. Kern
County government receives approximately 28.1% of the total amount of property taxes collected
throughout the County. More than 31.5% of the County's assessed valuation is derived from oil and
gas producing properties. Property tax revenue is the largest source of "non-earmarked",
discretionary use funding for Kern County government.
DISTRIBUTION OF LOCAL PROPERTY TAXES
FY 1998-99
Cities 6.1%
Schools 60.5% i County 28.1%
Special Distrids 5.3%
Other Taxes - A variety of other taxes comprise 2.7% of the budget. The main component of this
revenue category is the County's share of the State-administered Sales and Use Taxes, which is
expected to total $17.5 million this year. Other Taxes also includes proceeds from the Real Property
Transfer Tax and the collection of Transient Occupancy (motel/hotel) Taxes.
State Aid - Various types of financial aid from the State of California comprise the largest source of
funding for Kern County government. State Aid for FY 1999-2000 is expected to fund 32.9% of the
total budget. Most of these revenues are "earmarked" for specific State-mandated programs, such
as welfare, public health, mental health, and other social services. A large portion of the County's
non-earmarked, discretionary use revenues must also be used to pay a share of the costs of these
State-imposed programs. Also included in this category are monies received as the County's share
of Motor Vehicle License Fees and sales tax funds earmarked for local public safety.
Federal Aid - Various sources of financial aid from the federal government will fund 27.0% of the
Budget. Most of this federal aid is earmarked for support of mandated welfare programs, road
construction, juvenile detention/rehabilitation programs, family support programs, Employers'
Training Resource administrative costs, and Community Development Program administrative costs.
Service Fees and Charges - Fees and user charges for various services provided by County
departments are expected to finance about 13.1% of the budget. The revenues from this source are
used 'to fund the services for which the fees/charges are collected.
Balances from Prior Year - Funds remaining from last fiscal year's budget account for 5.3% of the
FY 1999-2000 Budget. These "carryover" balances include unused appropriations from the
operating budgets of County departments, plus any unexpected revenues collected during the prior
fiscal year.
Other Revenues - Various other revenue sources account for 6.0% of the budget. They include: fees
collected for various regulatory licenses and permits; fines and forfeitures, which includes the
County's share of fines collected by the courts; revenues from use of money and property, consisting
mostly of interest and investment earnings from funds in the County Treasury; and miscellaneous
revenues from a wide variety of smaller income sources.
FINANCING SOURCES BY CATEGORY
FY 1999-2000 ADOPTED BUDGET
Oth
Current Property Taxes :.
~_~--~'"~.. Fines, Forfeitures, Penalties
Misc. Other
~m Prior Year
Rev. from Use Xof Money & Pro
ts
Charges for Service~
--Federal Aid
FINANCING SOURCES AMOUNT % OF TOTAL
Current Property Taxes S 105,556,350 13.0%
Other Taxes S21,827,581 2.7%
State Aid S'267,167,597 32.9%
Federal Aid S219,109,734 27.0%
Charges for Services S 105,939,100 13.1%
Fines, Forfeitures & Penalties S 16,348,322 2.0%
Rev. from Use of Money/Prop. S8,661,111 1.1%
Licenses & Permits S 10,315,081 1.3%
Misc. Other Revenues S 13,151,312 1.6%
Balances from Prior Year S43,129,915 5.3%
TOTAL COUNTY BUDGET: S811,206,103 100.0%
FINANCING USES BY FUNCTION
Public Protection
& Facilities
Reserves & Contingencies
_~ . & Sanitation
DebtService~ ~ - \
I~/~// ~ \Recreation & Culture
General Government -~'.,/// Z
. '~'/// / ~ Public Assistance
Educahon
FUNCTION ALLOCATIONS % OF TOTAL
General Government- S72,863,888 9.0%
Public Protection S257,237,318 31.7%
Roads S30,062,188 3.7°,/o
Health Services S 108,958,496 13.4%
Public Assistance S275,435,544 34.0%
Education S 7,537,722 0.9%
Recreation & Culture S9,637,208 1.2%
Debt Service S 16, 741,282 2.1%
Contingencies & Reserves S32,732,457 4.0%
TOTAL COUNTY BUDGET: S811,206,103 100.0%
ALLOCATION OF DISCRETIONARY USE FUNDING BY FUNCTION
Public Protection
Reserves & C°ntlngencies ~,' _,,~,~Pu blic Ways & iaiilities
General Government "~,~ ~ Public Assistance
FUNCTION ALLOCATIONS % OF TOTAL
General Government S32,268,928 18.0%
Public Protection S86,454,418 48.2%
Roads S5,429,500 3.0%
Health Services S6,495,013 3.6%
Public Assistance S20,993,414 11.7%
Education S5,669,046 3.2%
Recreation & Culture S7,245,793 4.0%
Debt Service S4,420,099 2.5%
Contingencies & Reserves S 10,337,500 5.8%
TOTAL DISCRETIONARY USE FUNDING: S179,313,711 100.0%
;.Calitbr~ia Attorney General Press Releases 99-088 http://caag.state.ca.us/press/99-088.htm
ATTORNEY GENERAL LOCKYER blARKS ONE YEAR ANNIVERSARY OF TOBACCO
SETTLEMENT
November 30, 1999
99-088
FOR IMMEDIATE RELEASE
(San Francisco) - Attorney General Bill Lockyer today issued the following statement regarding
the one year anniversary of the national tobacco settlement:
"One year after the landmark multi-state tobacco settlement, California has assumed a leadership
role in making sure the agreement delivers on its'promises. Within the next few months California
will receive the first annual installment payment on the agreement, which is expected to generate
$25 billion over the next 25 years, with additional payments in perpetuity. The agreement has also
placed tough new restrictions on tobacco company marketing and advertising practices, including
a ban on marketing that targets kids. I am committed to strict enforcement of the settlement terms
because dealing with 'Big Tobacco' requires a 'Big State' response. My office has established and
will maintain the first and only full-time, fully staffed state tobacco enforcement division in the
nation. In addition, we have created a consumer complaint line for Californians to report
suspected violations of the law. I encourage Californians to use it by calling, (916) 565-6486.
Californians now have a fighting chance to save current and future generations from tobacco
addiction, disease and premature death.
(See attached fact sheet about the Master Settlement Agreement)
blaster Settlement Agreement Fact Sheet
The MSA imposes major restrictions on tobacco company marketing, practices and prohibits
advertising aimed at kids. The MSA provides the following restrictions on tobacco companies:
· Prohibits direct or indirect targeting of youth inadvertising, marketing and promotions.
· Prohibits brand name sponsorship of concerts, sports events, events with an intended
audience having a significant percentage of youth and events with paid participants who are
youth.
· Prohibits access by youth to free samples of tobacco products.
· Prohibits payments for placement of tobacco products in the media.
· Prohibits outdoor advertising of tobacco products.
· Prohibits transit ads, on or in public or private vehicles.
· Prohibits using cartoons to advertise tobacco products.
· Prohibits tobacco brand-name merchandise.
Under the terms of the MSA, California will receive approximately $1 billion per year. The first
payment, expected in mid-December, will be' approximately $316 million. SubseqUent payments
are expected in January and April of 2000. The payments will be split evenly between the state and
local governments.
The Attorney General's Office represented the State of California in the tobacco litigation and
settlement and maintains staff and resources dedicated to. enforcing the terms of the blaster
Settlement Agreement. Components of the enforcement program include:
Iof2 I'4,'00 11:21 AN
.-Calif°rnia Attorney General Press Releases 99-088 http://caag.state.ca.us/press/99-088.htm
· Attorney General's Tobacco Litigation Unit which operates a phone line for obtaining
information about the MSA or reporting suspected abuses at: (916) 565-6486. Inquiries may
also be directed to the Tobacco Litigation Section at P.O. Box 944255, Sacramento, CA
94244-2550.
· Two brochures that outline the restrictions imposed by the MSA on the tobacco-industry. One
brochure focuses on the youth marketing restrictions and the other on brand name
sponsorship restrictions. Copies of both brochures are being distributed to tobacco control
programs and school districts throughout California.
Retun~ to the Atton~ev General's Press ReleaSe Index
2 of 2 1/4/00 11:21 .AN
Califemia Sales Tax: How much noes to ,,'our city? http://www.cacities.or~memserv/features/financing%5Fcities/getO2.htm
Sales Tax: How much goes to your city?
For each taxable dollar you spend, you pay sales tax to...
City ~
c~~::::::::::::.-
The City portion goes to the city where you are when you make your purchase. The sales tax rate varies
somewhat depending on where this purchase occurs.
NOTES:
1. California sales tax revenues are distributed based on the place where each sale occurs.
2. Of the 6% State sales and use tax, 0.5% is returned to counties and cities for public safety purposes under Proposition ·
172. Cities receive about 5% and counties get 95% of these funds.
3. A portion of the 6% state sales and use tax is transferred to counties.
4. City portion goes to county, if transaction occurs in unincorporated county area.
5. *Most counties and a few cities add additional rates, most commonly for transportation, ranging from 0.25% to
1.25%. These additional rates cause the total California sales tax to vary, from 7.25% to '8.5%.
SOURCE: Calif State Board of Equalization .4nnual Reports, Coleman Advisory Services
Index / Previous / Next /
Slide 2 of 10
For more information contact: Michael Coleman
mcolenlan~'/~dc n.davis.ca.us
530-758-3952 L~afl,Jo o; Cali:or~i, Citiasifil[&
Illlg
Iofl I..'6/00 10:23 A
City of Bakersfield
Unfunded Capital Improvement Projects
CATEGORIES COST.
TRANSPOR TA TION
Pavement Maintenance $81,900,000
Capacity Enhancements
-Misc. Roadway Widenings $5,000,000
-Intersection Widenings $3,500,000
Major Highway Projects
-Freeway Interchanges (New)
-Fairfax @ Fwy 178 $9,100,000
-Hageman @ Fwy 99 $10,000,000
-Hosking @ Fwy 99 $7,000,000
-Morning @ Fwy 178 $7,000,000
-Vineland @ Fwy 178 $7,000,000
-Masterson @ Fwt 178 $7,000,000
-Freeway-Interchanges (Expand)
-White @ Fwy 99 $5,000,000
-Freeway Widenings
-S. R. 204 - Fwy 99 to Fwy 178 $50,000,000
-Freeways New
-Fwy 178 - Fairfax to Alfred Harrell Highway $25,000,000
-New Major Roads
-Mohawk - Truxtun to Hageman $1,000,000
Traffic Operations
-New Traffic Signals $3,800,000
-Upgraded Traffic Signals $5,130,000
-Channelization $1,000,000
Miscellaneous
-Medians $12,110,000
-Street light Upgrades $400,000
-Curb & Gutter Rehabilitation $10,400,000
-Sidewalk Rehabilitation $5,200,000
-Beale Overpass SL Upgrade $40,000
Total Transportation $256,580,000
DRAINAGE IMPROVEMENTS
-Rehabilitation of Existing $7,500,000
-New Facilities $3,500,000
Total Drainage $11,000,000
SEWER IMPROVEMENTS
-New Main Lines* (annexed areas) $12,500,000
-Treatment Plant Expansion (Land Purchase) $15,000,000
. -New Main Lines* (annexed areas) $11,000,000
'-New Trunk Lines (BV II) $7,000,000
Total Sewer $45,500,000
BUILDING MAINTENANCE
-Boiler Tube Replmnt - Centennial Garden $5,000
-City Clerk Office Remodel $42,000
-Elev Upgrade; CH Annex $75,000
G ~GROUPDAT~Delsa\Unfunded CIP Prolects.wb3
City of Bakersfield
Unfunded Capital Improvement Projects
CATEGORIES COST
-HVAC Upgrade PD Comm Ctr $12,000
-HVAC Upgrade, City Hall $410,000
-Roof Repairs, City Bldgs - Various $465,000
-Signal Conduit Upgrade $18,000
-SL Upgrade Baker Phase 2 $66,000
-SL Upgrade Downtown $33,000
-Stockdale/Calloway Median Impro. $24,900
-Disaster Trailer Storage $20,000
-Replace Prkg Garage Fence $19,800
-City Hall Elevator Modernization $125,000
-Roof Repairs, City Bldgs - Various $30,000
-Roof Repairs, City Bldgs - Various $75,000
-City Hall Annex Building Elevator Modernization $75,000
Total Building Maintenance $1,495,700
PARKS & RECREATION
-Access Mowing Ramps $22,000
-Beach Park Facilities $105,360
-Beale, Jastro Sidewalk Rmv $21,698
-Beale, Wilson Tennis Court $23,513
-Jefferson Court Resurface $31 430
-Lowell ADA Playground $126 730
-Lowell Picnic Tables $9 620
-MLK Exterior Restoration $36 500
-MLK Picnic Tables $14 430
-Planz ADA Playground $88 325
-Pool Decking Restoration $23 665
-Pool Equipment $57 986
-Pre-Cast Signage $12 980
-Restore Beale Park Restrooms ' $27.720
-Saunders ADA Playground $99,128
-Tree Removal/Replacement $44,424
-Truxtun Tree Replacement $22,175
· -Wayside ADA Playground $142,220
-Aquatic Center W/Shelter $3,131,964
-Group Picnic Area $79,805
-Interactive Water Element $66,550
-NW Storage Facility $119,000
-Playground ADA 'Modifications $934,200
-Administrative Office $1,000,000
.-30 Acre Park Site - Stkle Hwy & BV Road $1,500 000
-Downtown Storage Warehouse $300 000
-ADA Restroom Modifications $600 000
-Community Centers with indoor gymnasiums (3) $5,000 000
-Aquatic Center $3,100 000
· -Expansion of Maxicom auto irrigation system $250 000
'-Park Tree Replacement $325 000
-Irrigation Renovation $300 000
-Astroturf Soccer/Rugby Fields @ Yokuts & Beach $1,500 000
-Interactive Water Element - Direct Loss $250 000
-Security Lighting Renovation $175 000
-Park Picnic Shelter Renovation $150 000
-Beale & Jastro Amphitheater Renovation $200;000
-Cultural Center $1,000,000
G ~OROUPOAT Oeisa~Unfuncled CIP Prolecls wb3
City of Bakersfield
Unfunded Capital Improvement Projects
CATEGORIES COST
-Park Road and Driveway Improvements $250,000
-Additional Bike Path Mileage $400,000
-Southwest Storage Facility $200,000
-Daycare Facility $1,500,000
-Neighborhood Parks (3) $3,750,000
Total Parks and Recreation $26,991,423
FIRE DEPARTMENT
-Repaving Fire Stations $175,000
-Traffic Signal Preemption Retrofit $800,000
-Scba Air Compressor $68,000
-Enclose Turnout Lockers $30,000
-Fire Station B VNVhite $700,000
-MDC/AVL'S $345,550
-Station '4 Electrical $23,000
-Station 5 Door Retrofit $40,000
-Station 12 (NE area) $1,000,000
Total Fire Department $3,181,550
POLICE DEPARTMENT
-Upgrade/Replacement of Records Mgt System $500,000
MIS..
-Corp Yard Network Upgrade $92,600
MISCELLANEOUS CAPITAL PROJECT.~
-Expand City Hall $8,000,000
-Cap Sanitary Landfill $11,000,000
-Street Light Conversion - 12 locations $310,000
-Lincoln School Street Lighting $90,000
.Total Miscellaneous $19,400,000
Grand Total $364,741,273
O,tOROUPOA~C)elsa\Unfunded CIP Projects.wb3
Astroturf Soccer/Rugby Fields at Yokuts and Beach
$1,5OO,O0O
The Recreation and Parks master plan indicates a need for sports fields. Astroturf is
proposed as being more durable than natural turf.
Interactive Water Element - Direct Loss
$250,000
Automated, timed water play area with no standing water which is unstaffed.
Security Lighting Renovation
S175,000
Brighter, more efficient, and vandal resistant lighting at various parks.
Park Picnic Shelter Renovation
$150,000
Replace and improve picnic tables, serving shelters, barbecues at various city parks.
Beale and Jastro Amphitheater Renovation
$200,000
Repair two classic park structures.
Cultural Center
$1,000,000
Park Road and Driveway Improvements
S250,000
Repair concrete and asphalt. University. Beach. and Central Parks.
Additional Bike Path Mileage
$40O,O00
Southwest Storage Facility
$200,000
Storage for small equipment (blowers, trimmers, e.g.) and supplies which is proximate
to streetscape and park assignments.
Daycare Facility
$1,500,000
Neighborhood Parks (3)
$3,75O,OOO
Some more-established areas of the city are deficient in neighborhOod parks. Areas in
need include near Highway 99, north of Panama Lane: Akers and Alum Street: and
Northeast Bakersfield.
Recreation and Parks
Administrative Office
$1.000,000
Insufficient space is available in the Yard for all staff. Two portable office buildings are
currently .in use.
30 Acre Park Site, Stockdale Highway and Buena Vista Rd.
$1,500,000
Develop the rest of the park site (park improvement monies sufficient for only a
portion.)
Downtown Storage Warehouse
$300,000
Central Warehousing of equipment parts, supplies, and bulk materials.
ADA Restroom Modifications
$600,000 ·
14 park restrooms (in addition to those currently requested) require modification to ADA
guidelines.
Community Centers with indoor gymnasiums (3)
$5,00O,O0O
High priority need in Recreation and Parks Master Plan.
Aquatics Center
S3,100,000
High priority need in Recreation and Parks Master Plan.
Expansion of Maxicom automated irrigation system
S250,000
Expansion of Maxicom system citywide to all streetscape and parks is needed for
energy and water savings.
· Park Tree Replacement
$325,000
A comprehensive tree inventon/indicates that aging trees in the city's 13 oldest parks
should be removed and replaced. Disease and damage have rendered some trees
unsightly and possibly hazardous.
Irrigation Renovation
$300.000
Replace deteriorating irrigation at City Hall, Well Park, Wilson, and Central Parks and
South H median with more reliable systems.
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
CONFIDENTIAL
August 27, 1999
TO: H ONO RAB LE MAYOR AN DCITYC O UN~/
FROM: ALAN TANDY, CITY MANAGER /~ '/
A member of City Council who received my last report on the County Airport indicated they
wished to know what kinds of things would .fall out of the budget in order to assist financing
that project.
The County Airport Director is asking for $3.0 million, either as a cash contribution over a
few years, or that amount in principal payment, with us to retire both principal and interest
on a loan. I have indicated that, from my perspective, I could recommend a transfer of
$500,000 with the airpark, and that we could study, for six months, a contribution of up to
another $1.5 million.
Policy Priority
The biggest question on the subject of what we can contribute is how high is it on the
Council's priority list. It is in the Council goals, but so are road repairs, gang control, and
enhancements to the Arena/Convention Center area and downtown, among many others.
So, in the big picture, where is it? Would you cut public safety personnel to assist the
County? Other needed City capital improvements? Is it a priority over. a possible
downtown project that might carry even greater impact than Centennial Garden? Or, is it
your desire to make only an affordable, no harm, contribution to express symbolic support?
The place where it falls within this range is critical to what we can do.
Subsets of the policy priority question include:
1) Would the voters approve a tax for it?
2) Can the County fund it without us? Their budget is four times ours and they have
owned and operated it for a very long time.
CONFIDENTIAL
Honorable Mayor and City Council
August 27, 1999
Page 2
CONFIDENTIAL
To show what various levels of contributions would cost in an average year, we provide the
following:
1) Based on the last five year average, the new one time monies in the Capital Outlay
Fund are $2.1 million per year. This would be the most likely place that the airport
would fit. Note - this is an average; in theory it could be far less or more than the
average in any given year.
2) A listing of last year's unfunded capital outlay requests is attached. Of course,
monies available and priorities for the use of monies will change before next budget
year, so take this as a sample of what it might 'mean if we prepared next year's
budget today.
a) With an average year's funding available, we could (without airport) fund
Items 1-25 on the attached list.
b) If we funded the County's request for $2.5 million (over the airport fund
balance of $500,000, for a total of $3.0) all in one year, nothing on the list
could be funded. In fact, we would still be $400,000 short.
c) If we funded the $2.5 million in three annual increments of $833,000 each,
we could get to Item 12 on the list and comparable cuts would be needed the
next two years.
d) If we participated in the County's loan program for 12 years to pay off $2.5
million in principal, along with interest at + 5~%, the twelve annual payments
would be + $290,000 per year. Under this example, we could fund the list
through Item 19. Comparable impacts would take place the next eleven
years.
e) If we participated at the maximum level I have recommended we study, of
$1.5 million, the above calculations would be:
i. If all $1.5 in Year 1, we could fund to Item 6 on the list.
ii. If we paid $500,000 for each of three years, we could fund to Item 17 on
the list, with comparable costs for the two years thereafter.
iii. If we participated in the County loan program for 12 years to pay off $1.5
million in principal, along with interest at + 5¼%, the twelve annual
payments would be + $174,150 per year. That would let us fund through
Item 22 on the list, with comparable cuts for the following eleven years.
CONFIDENTIAL
Honorable Mayor and City Council
August 27, 1999
Page 3
CONFIDENTIAL
3) Of course, the above are based on "average" conditions over the last five years. It
is possible that none of the $2.1 million will be there, and that the amount funded
would have to come from operating cuts n the General Fund. It is also possible that
we will get a windfall from an unexpected source, and that the full list could be
funded, along with the Airport contribution.
Please remember, this is a sample of impacts, based on last year's unfunded requests and
an average one time revenue assumption. Demands (for streets, gang control expenses,
etc.) may go up. Revenues may go down, depending on a variety of conditions that occur
during the year. Also, priorities and revenues will vary with new information each year.
.Other Possible Sources
Our budget is large and complex. Legally and theoretically, there are other places a
contribution could come from, including:
a) The General Fund operating budget - This would not be recommended, as
it could endanger key City services.
b) Facilities Replacement Reserve - This was set aside by the City Council in
a year when we had $4.0 million in unexpected HVAC repairs at the
Convention Center. This would not be recommended, as it is intended to be
for City owned facilities.
c) Unexpected Windfall - we could win a big legal case, get a major insurance
rebate, pull off a creative settlement to an issue, etc. The problem is, will it
happen, and if it happens, will it be timely - soon enough for the County to
plan on it?
Summary
The bottom line is, of course, how large a priority is the project for the City Council? How
much risk is the Council willing to take in terms of other capital projects and/or the
operating budget to finance the project? More discussion needs to take place, at both the
committee and full Council levels.
AT:rs
Attachment
CONFIDENTIAL
BAKERSFIELD
MEMORANDUM
August 25, 1999
TO: Alan Tandy, City Manager
FROM: Darnell Haynes, Assistant to the City Manage~~"
SUBJECT: FY 2000-2001 Proposed C. I. P. - Capital Outlay Fund
Attached for your information is the proposed fiscal year 2000-2001 list of capital
improvement projects which are typically budgeted in the capital outlay fund. Over the
current and prior four (4) years the City has been able to fund an average of $2.1
million in capital outlay funded projects each year. As you know, the capital outlay fund
is supported by non-recurring one time revenues. These non-recurring revenues are
usually transferred to capital improvement or other funds to finance one time
expenditures, after the amounts have been confirmed.
Project Title , Ward Amount
1. Roof Repairs Various Bldgs. Var $ 50,000
2. Property For Fire Station 12 3 $ 250 000
3. Fire Station B V/White Lane 6 $ 150 000
4. HVAC Upgrade PD Comm Ctr. 2 $ 26.000
5. Traffic Preemption Var $ 78.500
6. Repaving Fire Station 7 6 $ 94 000
7. Jefferson Court Resurfacing 2 $ 29 300
8. JastroTennis Courts 2 $ 45 000
9. Enclose Turnout Lockers 5,6 $ 15 000
10. HVAC Upgrade City Hall 2 $ 430 000
11. Hose Tower Station 13 6 $ 19 000
12. MDC/AVL's CW $ 64 450
13. Elevator Upgrade-Annex Bldg. 2 $ 65 000
14. Mezzanine @ P St. Stor. Bldg. 2 $ 60 000
15. Beale Court Resurface 2 $ 12 500
16. Dev. Svc. Replace Prkg Garage Fence 2 $ 64 000
17. Playground Renovations -ADA Var $ 200 000
18. Pool Renovations Var $ 100,000
19. Jastro Pool Heater 2 $ 50,000
20. MLK Center Painting 1 $ 37,000
A. Tandy
Capital Outlay Fund
August 25, 1999
page 2
21. Silvercreek SkateArea 6 $ 50,000
22. Yokuts Park Stage Area 5 $ 25 000
23. Beale Park Driveway 2 $ 30 000
24. Beach Skateboard Lighting 2 $ 20 000
25. Beach Park Playground Impvmts. 5 $ 100 000
26. Facilities Replacement Reserve CW $ 500 000
27. Remodel M.I.S. 2 $ 90 000
28. Park Acquisition NE Area 3 $ 100 000
29. Stockdale/Buena Vista Park 4 ?
30. Replace SCBAAir Compressor 2 $ 68,000
Total $2,822.?50
cc: J.W. Stinson
A. Christensen
MEMORANDUM
TO: Alan Tandy, City Manager
·
FROM: Gregory J. Klimko, Finance Dire
DATE: August 31, 1999
SUBJECT: AIRPORT
This is in response to your e-mail request of August 26, 1999.
The source of funding the acquisition and improvements at the Bakersfield Airport on
Union Avenue is attached.
This annual debt service for a $15 million General Obligation (G.O.) Bond issue for a new
County air terminal and-ancillary facilities is approximately $1.25 million. This amount is
a little higher than other G.O. Bond issues since facilities built with tax exempt bond
proceeds which benefit private entities (airlines) are subject to the Alternative Minimum
Tax (AMT) which is reflected in the bond interest rates.
I contacted the County's Assessor's Office in order to determine the 1998-99 assessed
value (AV) within the greater Bakersfield area. We agreed the quickest way was to use
school districts which resulted in a $17.5 billion AV in the metro area. Detail information
is as follows:
~ Assessed Value
Bakersfield $ 4,555,694 000
Beardsley 867,229 000
Edison 219,691 000
Fairfax 255,026 000
Fruitvale 961,072 000
Greenfield 853,030 000
Lakeside' 369,964 000
Norris 452,561 000
Panama - B.V. 3,808,308 000
.Rio Bravo-Greeley 410,513 000
Rosedale 1,004,472 000
Standard 3,629,057 000
Vineland 92,742,00(3
Total $17,479,354,000
With annual debt service estimated to average $1,253,400 the annual additionaI tax on . !'
an $85,000 median priced home would be approximately $6.10 or stated another waY
$7.18 per $100,000 of Assessed Value. ..
I hope this information meets your needs.
City of Bakersfield
Airport Fund
Federal Grant Revenue & City Transfers
· ' 1985186-1998/99
Federal City
Description Grants Contributions Totals
1985-86 2,000,000 540,000 * 2,540,000
1986-87 1,481,776 .......... 1,481,776
1987-88 424,719 50,000 * 474,719
1988-89 211,559 483,030 * 694,589
1989-90 1,944,238 .......... 1,944,238
1990-91 1,726,752 .......... 1,726,752
1991-92 807,421 435,500 ** 1,242,921
1992-93 187,699 881,470 ** 1 ,-069 169
1993-94 252,449 .......... 252,449
1994-95 130,598 265,000 ** 395,598
1995-96 17,862 .......... 17,862
1996-97 617,236 .......... 617,236
1997-98 ..............................
1998-99 ..............................
Totals 9,802,309 2,655,000 12,457,309
Analysis
Capital Improvements 9,802,309 1,640,600 11,442,909
Operations .......... 479,764 479,764
Availiable Balance 6/30/99' - ......... 534,636 534,636
Totals 9,802,309 2,655,000 12,457,309
* Revenue Sharing Fund
** General Fund
K~nCo ~ 16,000,000 1
N~, Kern Count. C~lfomla
S~-A~S~ Genera[ Obliga~on Bends
~=,~ ~ {Airpo~
Serlme 2000
Annual
Date , Pr~nclp-~ Rate Interest P & I P & I
08/O1/00 329,313.54 329,313.54
12/01/00 460,000 3.800 396,178.25 865,178.25 1,184.488:78
08/O1/O1 388,438.26 388,438.26
12/01/01 480,000 4.200 388,438.25 866,436.25 1,252,872.50
08/01/02 376.366.25 376.358.26
12/01/02 600,000 4.360 376,358.26 876,358.25 1,252,712.50
08/O1/03 365,481 ;25 385,481.28
12/01/03 525,000 4.450 385,481.26 ' 890,481.26 1,255,982.50
08/01/04 363,800.00 363,800.00
12/01/04 545,000 4,650 353,800.00 898.800.00 1,262,800.00
06/01/05 341,401.26 341,401.25
12/01/05 570,000 4.850 341,401.25 9.11,401.25 1,252,802.50
08/01/08 328,148.75' 328,148.76
12/01/08 600,000 ~,.750 328,148.75 928,148,75 1,258,297.50
08/01/07 313,898.75 313,898.75
12/01/07 825,000 . 4.860 313,898.75 938,898.75 1,252,797.50
08101~8 298,742.50 298,742.50
12/01/08 856,000 4.950 288,742.50 953,742.50 1,252,485,00
08/O1/09 282,531.25 282,531.25
12/01/09 890,000 5.050 282,531.25 972,531.25 1,255,082.50
08/01110 265,108.75 265,108.75
12/O1 I10 728~000 6.200 265,108.75 990,108.75 1. 265,217.50
06/01/11 240,258.75 248.258.75
12/01111 700,000 5.300 246,258.75 1,006,258.75 1,252.517.50
08/01 I12 226,118.75 220,118.75
12/01112 800,000 5.750 226,118.75 1,026,118.75 1,252,237.50
08101/13 203,118.75 203,118.75
1 2/01/13 860,000 5.760 203,118.75 1,053,118.75 1,256,237.50
06/01/14 178,081.25 178,881.28
12/01114 895,000 5.750 178,881,25 I 073,881.25 1,252,362.50
08101115 152,950:00 162,950.00
12101115 950,000 5,750 152,950.00 1,102,950.00 1,255,900.00
08/01/18 125,637.50 125,637.50
12/01/18 1,005,000 5.750 125,637.50 1,130,837.50 1,256,275.00
08101/17 90,743.75 96,743,75
12/01/17 1,080,000 5,750 98,743.75 1.156,743.75 1,253,487.50
06/01118 88,288.75 66.268.75
12/01/18 1,120,000 5.750 86,288.75 1,188,268.75 1,252,537.60
08/01119 34,068.75 34,008.75
12/01/19 1,185,000 5.750 34,088.75 1,219,068.75 1.263,137.50
15.000,000 10,007,992.29 25,007,992.29 25,007,992.29
Dated 01/01/00 Average Coupon 5.526987
NIC 5.526987
SettJame~t O1/01/00 TIC 5.486429
Arbitrage Yield 5.488429
Bond Yea~e 181,075.00
Average Ufa 12.07
Accrued Interest 0.00
George K. Baum & Company 8/31199
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
CONFIDENTIAL
September 1, 1999
TO: HONORABLE MAYOR AND CITY COUNCIL ~//~~
Several questions were asked by Councilmembers regarding the airpark and airport
terminal project, as follows:
1) A memo is enclosed showing that a metro-wide tax referendum would cost about
$6.10 per "average home" per year.
2) A history of what we have paid for the airpark (most is Federal grant funds) is
enclosed.
3) The County is getting $8,000,000+ per year in new money from the tobacco
settlement. It's unrestricted! What a fine terminal it can be for only a small portion
of that! Details of the new money to them are enclosed.
AT:rs
Enclosure
CONFIDENTIAL
BAKERSFIELD
CITY MANAGER'S OFFICE
MEMORANDUM
September 1, 1999
TO: Alan Tandy, City Manager
FROM: John W. Stins~sistant City Manager
SUBJECT: Tobacco Settlement
Attached is a copy of the State Legislative Analyst's Office report on the Tobacco Settlement
which was provided to me by the County Administrative Office. As detailed in the transmittal
memo and the report, the County anticipates receiving $9.24 million on June 30, 2000. They
will continue to receive approximately $8 million each year from the settlement for the next 20 to
25 years. These funds are in no way restricted as to their use by the County. They also have not
included any of these funds in their current budget, since they do not anticipate receiving them
from the state until next fiscal year.
In addition to these funds the County also receives funds pursuant to the recently passed
Proposition 10. They will receive $11.7 million for fiscal year 1999-00. These funds are
completely separate from the Tobacco Settlement funds in that they are restricted in their use for
child development programs and are controlled by the new created Children and Family First
Commission.
08/31/00 TUff 00:43 FAX 00S 068 3100 wI~N ¢0 JJ)MXN ~00X
FACSIMILE
To: John Sdn.qon
Of: ~i~ of Ra~§eld
Fax: 66Z.8~2~2052
111$ 'lYe, tun A,v~aae, 5' lalo~
.. i~-mafl eJadd,~co.k:e,m.~a.~m
09,':11./99 TUB 09:44 F.LI 905 969 31.90 ~ CO .~J)I~IN l~1002
What Will It Mean for Califomh? The Tc~bacco $cttlcrucnt Pase I of 17
What Will It Mean for
California*.
The
Tobacco
Settlement
Introduction T~ attorneys getmral of most rte'_cs and
the major United States tobacco
companies have agreed to seUle mote
than 40 pending ]aw~uit~ brought by
stace~ against the toba~:o Lm~su7. T~
~cha~ge for bopping ~e~t ?aw~t~ts
~d agtteing not to sue in the ~utt~e, the
s.tatcs wLll z~:eive bLLUoas of donaz~
payments f~em the tobacco comedowns
a~d the ¢ompani~ wiU ~..~t
madccting activities a~d establish new
efA'octs to ctub tobacco
Major ~'~.dings ~ ~'~ort, we ~:~w thc
a§reement ~nd iL~ pot~ntia~ impa~t On ,
California, answe~ a numb~ of
ques~ons a~ut how the a~t
wouJd wodc, and r~ise a numbe~ of
is.sues for co~derazton by the
L~gLqlatutt.
Co~lstderstiOl~Lq The ~etdemem ~s p~ojected to resuh
payme, nu to Ca~or~.a of S25 bL1Uoa
for the Legislature
through 2Cr25. T~e a~moum will be s~
between the state and loc~
(aH 58 cou-t~es and fou~ cities). The~
a~c no restrictions on thc usc of the
money. There are, however, a number of
u~certaMt~e$ sutTounding how much
money California wi.Il actvally receive.
The 1999-00 Governor's Budget
assumes the receipt of $562 million in
hup://u~VW.1 ao.ca, gov/011499Atobacco_serdemenchcml ~ 1/99
Win ~r ~ ~ Califor~? The To .b. ncco ~c~c~:n! *Page 2 of 17
thc budf~ year, which is equivalent to
the fi~3t two payments to thc state.
Althou~ ~he seulemeat does no~
require any action by the Lesislatu~ in
ctrc~ to L~kc effect, we suSSest that the
· Recognize ~e uncer~n~
s'urroundin~ the level of funds
the state will recdve, e~ecfally
dedicate the settlement montes
to suplx)rt spe,dfl,* n~w onSoh~
· Condder tim additional
accrue ,to local government
when considering additional
local government fiscal relief in
the futttre.
· Monitor new national
antltobacco program in order to
complement existing state
efforts.
On November 16, 1998. thc attorneys gen~al of eight states (including Calit~omia) and ~ nation's
four major tobacco companies agx~cd to settle morc tbs,, 40 pending lawsuits broul~tt by sta~s
against thc tobacco industry. Tho ag~,erncnt will result in significant new revenues to thc state and
local 5~over,~,~.~ts. In addition, it could x~s~lt in reductions in smoking 1~ citizens and thus hav~
Positive impac~ on public health. In this report, we r~view the settlement agreement and its potential
impact on Californi~ answer a number of questions about'how thc settlement would work, and rais~
a number of issues for consideration by.thc Legislature.
Summary of the Settlement
Thc settlement agreement calls for financial payments to the states, thc creation ora national
foundation to ~vclop an anti,moi~in8 advertising and education progr~n, sad the est~sbli.~ment of
ccrtain adverti-.~ing rc~cictiofl.~ to I:~acfi£ public I'~alth. l~igurc 1 suro~4zes the ky features of the
agrccmant, mM~¥ of which arc discus.sod ia mo~ detail below.
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05/31/99 T~ 09:44 F.~[ 805 860 3100 ~ C0 AI)¥XN ~004
What Will It Mean for California? The Tobacco Sealemeat Pa~ 3 of 17
~i~ure 1
~n~ fo~da~ou wh~
~ ~ ~velop ~ ~S ~d ~on
~ on ~, ~g of ?o~ ou~
~ob~o co--es
Dis~
use of mb~o ~..
~es
~u~n~ ~uc~
a~ ~ Brown & Wiili~son Toba~o C~mfion, ~ Tob~co ~y, p~p
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ohn W. stin~h - 000~
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~t W~ It ~ for C~f~a? ~ T~co Sc~cnt P~e 4 of 17
Mone~ Pro~io~ of ~e Se~ement
Ove~ew of Mo~
Ho~ M~ Mono ~ C~yo~ Get? ~ia is proj<~ to ~v~ ~ ~md ~ ~
~ount of M~g per y~ eh~g~ eoa~i~ly o~r ~e. ~fornia'a sh~ of t~ 1998 ~t ~ '
1~8 ~ough 2025 .. ' ' .-
(Jrt M~tt~om J
0~."31/00 TUE 00:46 F.LI 605 968 3100 KERN ¢0 Al)MIS 1~1000
Wlmt Will It Meaa for ~omia? The Tobacco Se~ement P~ge :S of 17
b l~j~ y~tr. '
The 1999-00 Govm*nor'~ Budget assumes thc rcccip~ ~ :~2 million to the state's C-choral Pund in
19~-06-the sta~e's 1995 payment ($15~ million) and 2000 payment (.~09 mmic~).
Who C~U O~ Mon~? Several California jurisdictions, including Los Angeles ~ounty md the City
and County of San Nrancisco, had toed their own lawsuits against the tobacco compani~. On Au~
$~ ~998, the Atxotney C-one, al entered into a Memorandum of Unde~t,~iing (~OU) with die local
Soy .emmeuts to ccot'dmate their lawsuits wxth thc state*s stat and provtde fo~ the allocation of any
m~mes recovered. The terms of ~e MOU include an even, ~)-50, split of the finaucial
between the state and thc local governm~nt~ that sign onto the deal. Thus, thc estimated g25 billion to
be aIlocated pu~uant to the tobacco se~ement would be ~lit between thc state and local
governments with each rcceivi~8 $12.5 b~)lion.
Thc local share w~ll be further Split betw~n the counties and speci~ed cities. Under the tenm of the
MOU, the state*s $8 counties will receive ~) percent of the local share, or $I 1.~ billiom 'Fnesc
mon~ will be dLs~itmtcd to the counties based on population.
The rcm,i,~in~ l0 percent, or $1.25 b~llion, w~ll be split equally among four sp~c~cd cities-Los
Angeles. San Diego, San Francisco. and San $ose~ The MOU limits the recovery to thc~c cities who
could have ~ an ind,**pendent lawsuit pursuant to a specit~c provision of the Bu~io~s md
Professions ~ode.
Local ~ovcrnrneats do not amom,~ica~ty receive the ~unds unless they joia the settlement and agree to
its terms. To the extent that a county or city chc~ses not to participate, tl~ monies that they could
ha¥c otherwise received would be'r~dLqtribut~d to the state and local governments.
Appendix 1 provides a breakdown ot'd~c cstZrn~d $12.~ billion goins to the local ~overnmcnts as a
rUit of ~c sc~tiemem. Thc table assumes that all of the loca! governments jnin ~h¢ settlement.
wCan.eMoney 8¢$1,ent?Thctobac¢oSCulcmcntagrc~.nncntplaccanore'--~~-~'-'-"~.~.on~on---~thc
nOo~ni. cs by the srates~ Similarly. CalLfornia'$ MOU with local governments contains no uso
Many of thc state and local lawsuits (includins California's) had sought recovery from the tobacco
companies or'thc tobacco-related health c. are costs (such as Mcdi-Cal) incurred by states and local
governments. Thc settlement agreement and California's MOu with the loc'al governm~ts do not
specify that any of the financial paym~zxts.by the companies att to rciraburse state and local
governments for such costa.
Absent specific action by thc Lcgialaturei'the funds received by the state fzom ~ settlement would
be deposited into the General Fund. Because the money is not a proceed or'taxes, it would not be
http://www.lao.ca, gov/011499_tobacco_settlemcnt.html 8/31/99
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W]utt Will It Mean for C~dLt'ornia? Th~ Tobacco Settlement Page 6 of 17
counted ~ revenues for pu~x)ses of calcuhting the minimum guarantee under Proposition 98.
Do~j ~e Se. tgemou MonO Cosmt TowAr~ the ~ Triter? A~ pan of use 199&.99
Package, the Legisiatum and Oovu'nor agreed to certain cuts in thc state's vehicle license f~ (VLc") in
future year3 if s'pecffmd rovenue forecasts (or '~e~3") am reached. We believe that the additional
General Fund revenues from the tobacco settlement would be counted towarct thc ~ggers. Based on
our most n~.ent revenue projections, however, revenues from the settlement would;w; be enough by
tbe. mselves m ~ e ~igger and ~cn~ra~ an additional cut in the VLF. Howeyer, th~ settlement,
monies would bring C, ene. nl l:und revenues ctofer to tl~ levels that would activate the trigger, and if
revenues inc~asc beyond cun~nt projcct~t lev~ could result in an adaiflonal ~ cut in thc future.
W7~N W~ tar ~'ond7 Be Ayail~le? The settlon~nt agreement sets fanh a payment and distribution
schedule for the monies to the statns. The tobacco compaaies w~ll n~ke payments into an escrow
ac¢ounL However, none of the monet would be distributed to the states from the er~to,~ account
until them h t ~in&l approval" of the agn~.rnent.
'Final approvaF is dcflaed ia thc agrccmcut u the earlier of (1) June 30, 2000 or (2) when 80 lx~.cnt ·
of the states, representing 80 percent of thc allocated distribution, obtain approval of the. h- consent
decrees and ~ ctudlcnges and arl~:eals are heard-by t~i. state courts. Cun~tty, it is unknown when
finn1 approval wLU be achieved, but it ts Likely tl~t it will occur before June :30, :2000 (whhin the
state's 1999-00 fiscal yeat).
As part of the settlement, thc tobacco companies ~ m~lr: a total of $12 bRUon in
pay~ts. The fi~3t payment of $2.~ billion w~ pa~d to the escrow 3ccount by the end of 1998.
Additional up-t~ront payments of $2.4 btlUon w~ll be made ~3ch ~anuary in 2000, 200~, 2002, and
2003. Annual payments w~ bcgin on April 15, 2000 and will be made in tl~ following inc:eznents:
· 2000: $4_~ bLttion.
· 200~: $5 bi.on.
· 2002 and 2003:$6.5 bi21ion.
· 2004-2017:$8.1 billion.
· 20~8 anct armua.Uy the~: $9 billien.
Uncertainties Regarding Money to C211rornia
Out review finds that thc~ are a number of ~actor3 that could have an impact on thc amount of
dolla:s 3ratable to C. si~fomia, ~ally in t~e long run. Most of these uncertainties wcadd t~uJt in
thc state receiving leu money than projected or receiving money with res~cted ttses, although two of
the uncer~nt~cs could actually ~ult ~n O3e state rcc~iring more money.
Attfan~ a.f tad F~rel C-~frmnmt 27Mt Card C~'~r P~,mef~. ~ agreement has provisions to
reduce ~.e payments to thc sta. tex Lu thc event that thc federal govea'nment takes certain
actions against the tobacco companies by November 30, 2002, Spcci_qca~y, if the Congre.~s enacts
legislation thaz provides for payments by ~ tobacco manufacturers (whether by settlement payment,
~x, et other means), which the federal government then makes avai.lable to the states t'or health-
htlp://www.lao.ca. Soy/0114~_tobgcco_settlemcnt, html 8/3
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· · Page I
08-*'31/99 Tt.~ 09:4T F.*t/ 805 060 3100 ~ CO .,I.J)lfll~ ~008
What Wdl It Mean for 'California? The Tobacco Settlement Paga ? of 17
related, tobacco-related, or for unre,,aicted p~ the tobacco companies could offset their
payments to the statr, s by that amount. Uffder this scenario, the state miiht receive the $am~ overall
amount of money it would hav~ otherwise reccivr, d, but with the federal iovexflment setting the.
priorities or with significant strin5~ auached. Neithex thc Conaxess nor the lh~idem have announced
any intention to take such actions at this time; nevertheles.q, such actions remain a possibility hi the
future.
Aetioas of tk~ Federal Goverament to Sefk Itebabunement for Health Care Costs. The federal
government ~res with the states the costs of the Medicaid Prosram (Mcdi-Cai in California).
A]thou~,h the settlement with th~ states is not basedon reimbur~g states for costs of tx~ating
tobacco-related illnesses under Medicaid, federal law generally requires federal ageae2es to
reimbursements for the fedea~ share of any Medicaid costs. As a consequence, it is poasibl$ tirol tile
federal gevemment could seek reimbursement for its tobacco-related Medicaid costs, either by
seeking a share of the states' settlement funds orby *atri~s legal action against tobacco companies hi
federal court. To thc extent that fedoral authorities are successful in obtaining pan of th~.settlement
funds, this would reduce the amount of funds retained by the states, In addttiial, to thc extent that a
federal court action re,suits in a large payout by the tobacco companies to the federal gevea'n,v~*~, thc
companies may become le~s solvent and las able to make the payments to the states as specified in
the states' settlement. Federal authorities have not indicated whether they plan to undertak~ such
actions relative to this settle, ment. However, in respon.qe to a previously proposed settlement, they had
indicated that they w~uld ~ a share (ff..the funds.
Drop in Cigarette $al~#. Thc settlement agreelllent contains provision.* that allow the tobacco
companies to decrease the amount they pay to thc state~ if the nationwide sales of cigarettes dccte, ase.
Specifically, each year the amount of the payment to .the states will be adj~ based otl tho
of cig-,trettcs shipped within.thc U.S. for sale. To the extent that this volume drops, the payments to
states will decrease over time. 'the tobacco companies have raised their price per pack by 4:5 cenl~ in
order to pay for the settlement. To the extent that thc increase in the price per pack reduces the
amount of ¢igar~tte~ consumed, the payments to the states would decrea.~ over time.
This volume adjustment i.s based on nm~on~ide sales, not just sales within California. This.could
minimize any negative financial impact on California since tobacco sales arc-more likely to decline
fa~ter in CalLfornia than in the rest of thc country due to (1) the additioual 50 cents per pack tax
placed on ¢igarctm$ beginning on lanuary 1, 1999 as a result of Proposition 10 (discu,~sed in itrcater
deta/l below), and (2) the existing antiimoking campaign that already cxi~t~ in California that is
~unded from proposition 99 monies.
La--fulls by ~Vonpartl¢!t~atlag t.~eal C~o~,e. rAm~nts. If a local government does not join in tim
f, extlement but rather continues with a lawsuit against the tobacco companies, the local government
would not receive any funds from the settlement. The share that.th~ would be eligible for under the
terms of the MOU would be divided by the sta~e and the other participating local govemmen~
However, any award, jud/lalent, or .v~tlement won by a nonparticipating local government would be
offset against tobacco companies' payments to the entire state. Ai this time, based on informal
discussions with local governments, it seems likely that most, if not ail, local governrnen_ts ia
California will participate in the state settlement.
Tobacco Company Banlore. The tobacco ~ettlcmcut was entered into with the U.S.
manufacmrinst subsidiaries of thc tobacco companies. As a conseq,,cnce, thepm*e~t companies are
not responsible for payments,to the states should one of thc subsidiaries go bankrupt. Banlrruptey by
ht~p://www.lao.ca, gov/O 11499_tobacco_settiement.htwJ 8/31/99 :
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What Will'It Mean for California? Th~ Tobacco Satlement Pase 8 of 17
one or more of thc tobacco mauu~ is a possibility given that the manufacture~ still face
potemial lawsuits from individuals and ~us action~. For example, there is cun~ntly a class action
case in Florida a~ainst the tobacco mnn-f~tllre~ SC~$ ~(X) bill;Off.
Should one or more of tlz tobacco companies declare bankruptcy, the amount of money ~ning u~ ttm
states could decrease si_ani6canfly. The t~mn~nin$ companies would not be responsible for payin~ the
obligation of ~ b,n _t.n~ companies.
R~ht~tlon h Marbt Sha~ o/'$mttng Comt~mie~. Over ~ the payments Of the patiieipait~
manufacturers can decrease if they lose market share to nonparticipating manufacnu~rs. Under the
tcnns of th~ agreement, tl~ states can protect theauelves a~ainst a reduction in payments by pesstng a
"n~xiel statute' included in thc agreement that would requite nonparticipating manufnctur~ to put
. flmds into escrow accounts for 25 ycar~ equivaieat to the amounts paid by tho participating
manufactutcn.
This possibility of reduced payments due to ~ decline in rne,icet share is probably not a major
concern. This is becsuse, ~ indicated earlier, most of the smeller tobacco manufactum-s have now
ag~ed to the deaL Under the terms of thc deal, the public health provisions of the agreement will
apply to these companies. Should their market sha~ increase to a specified level, they will becomo
responsible.for making paymente ¢orreslx~,ti,,g to those due by the original participating coml~des.
States would not receive any ~lditional monies, but the shar~ paid by individual companies would
chanse.
In~'easedPa~mrn~s/'rom the "Strategic Conlrtb~ion." From 2008 through 2017, the tobacco
companies will provide a 's~ategic conuibution" Of S861 million per yea~ to thc s~,-s In exc. e~q of
the other payments. How these fhnds arc allocated among ~ state~ will bc dctcrmined by a panel
committee of three former attorn~s gcncrai. Thc criteria for the alloc~tinn of the s~atc~ic
contribution will take into account each state's contribution to thc litigation. California was
relatively late entrant among states to the litigation, which may hun thc state's chances of n:ceiving a
signi~canl p~rtlon of the straicgic contribution. However. thc fact that the California Attorney
General wu one of the eight auorneys ~ that negotiated thc agreement and thc sheer size of the
state's c~e.against the companies may off~ any disadvantaSc.
Increases Du~ ~o Infla~n Adjustments. Thc petymcnt.q made by the tobacco companies will inc~ase
shove the ¢~tly estimated amounts due to an inflation a~ijustment. The futu~ tobacco
will be adjusted annually by 3 percent or thc national Consumer Price Index (ClYl). whichever is
gr~atcr. Thus, to the extent that thc volume of cigarettes shipped within riu: U.S. does not cleo'case,
the cetal payments to the statc~ will incrca.sc.
Legal Implications of the ,Settlement
The tobacco settlement agr~ment likely brings to it close variou~ state and local government
litigation again~ the tobacco companies and-has it number of legal implications.
Wh,u Happens.t~ the State's Cave as a ~esu/t o~'the Sett/eme~t? On ~une 12, 1997, the California
Attorney C, enerai filed a lawsuit against thc major tobacco companies in the Sacramento Superior
Court containing fo~ causei of action, a.s .~hown in Figure 3. By the time of thc settlement
agr~ment, two of the causes of action had already been dismissal by the court and two others wene
yet to be addxcsscd by the cout~
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What win It Mean for California? The Tobacco Sctdement Pa~ 9 of 17
~eganon w~ l;eVxously ~.sed by the
· l/'~4Eoaz oJ' Sfe/e ~J~/-~'nr, t ~. Tubacco Eu-m$ (i) conspired ~o not develop
or market safer cigarettes mhd tobacco products and (2) conspLred to not ~
on the basis of relative product safety. This allegation was awaiting action by the
· 1~ola~n~ o!~ Coagun~r P~ecfion ~#. Tobacco rums conducted
c~'__~tive, -.l,,wful, and unfair business practices by (1)
mLvepmsentadons and deceptive stat~m~nt~ to sell theix pro<luc~ (2) tapering
minors ~o buy ci8ax~ttes, {3) n~mip~latini levcls of nicot~e w[~out ~equa~ .
d~sclost~, and (4) ixnl~mpe~ly su~ng evidence about tt~ healt~ i~pacts of
product. This alle~adon wa~ ,,w~t~ng action by the cou.,.t.
· Woka/on~ e.f'$a~e Fe/x~ ~ ,.tel, TobaCCO firms improperly sealed certain .
documents and cecor~ wlfich would othcr~se have.been ava~Isblc to inf~rm
C~ifomia ;tud~rlti~s of thc companies' wronsdoin~s. This aJle~t, ion was
previously dismissed by the
UIx~n approval of~e conscnt!decr~ tn the state court, t~ stain's ~ against tl~ tobacco coml~ni~
w~l 1~ consider~ se~ed. As previou.~ty indicated, the San Diego Sut:~-dor Co~'t a~oved
consent decr~ on 'December 9 and d~ settlement becomes final 60 days later un]ess the cou~ order IS
ch'allcnsed during t~t period. T~e se~e.m~t a~xeement gencr~tl¥ r~ea.~$ d~e si~n~ tobacco
compeni~s from a~y ~utux~ lawsuits by the'state and local sovemments that p~ticipat~ in
$c~t~cmcn~
How Is the Settlement Differen~ From a Resolution R~ul~in~ From a Frial? It is ct[f~cult to sa7
with a high level of cer~in~y how a ~ on California's lawsuit against ~h¢ robin:co compra~e~ wouk[
· have eaded. It seems ualikely, however, t~t a court would have ordered provisio~ ~a~l to public
health thai ~he tobacco companies subsequeatly agreed [o in the se~llcmeat (for example,
on ~lvcr~ing ~nd ccrpor~¢ spo~crship). It i~ ~o~ cleat wbe~er ~h¢ mor~tary pmvi~ions Im~vided in
~be ~etflemen~ agreem~ui are ~',mater.than the sure would have ob~aiaed Lf k bad wc~ Rs c~se in com~.
How~vcr, because the companies have a~reed ~o cbc se~tlcment it i.~ likely that moacy will flow to
the state mo~¢ quickly and easily siace the compani~ wo~ld likely have appe. alcd a court decision.
Can Co_~fornlan~ File Law~ui~ a~ Individuals or in Cla~ Action .I~rwsu~t~ Again~[ th~ Tobacco
Company? While ~he seu. lcrnent places res~c~ioas on future laws~il.s by g~vemmental en~ties,
lawsuits by.iadividuals and ¢l~es of ~dividuals again.s~ the tobacco companie~ could still
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What Will I~lo~z
It Mean for C. alifc,,-~i~? Thc Tobacco Settlement Page 10 of 17
or Provl~ax~ Re~t~d to Public'Health
· Restrictions on Adve4'tising
o Bans .use of cartoon character~ in advtmising.
o Pzohl'bits ~'~el'fi't~.l*o.t~ in advertising. Dromotions. or marketing.
o Bans outdoor advcrfi.sing including bLIlboards, and placards i-n a~nas.
stadi-m% shopping mails, and vidco game arcades.
o Limits size ofad~nYt/ng ~
feet.
o Bans Uu~t/t advertising.
· Restrictious on ~. u~.~ct Placement ~nd Sponsorship
o Bans ctis~lJutio, and s~t. of,pi~zrd ~/menr/~t/so with brand
name logos, beginning July 1. t999.
o Bans paym~ts to promote toi~:co ;,ro~ts i~ r~o,i~t, td~isto.
tho~,$, titterer l:m~ducttons, live or recorded music [~rfonnances. and
videos and video games.
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(~ ~nt ~ cx~).
o B~ ~o ~w~r~ ~~.
· New Na~ F~on ~ C~at ~
o ~~ ~ ~ foun~ to ~lop ~~ ~
~np~ to co~ ~ ~ns ~d educ~e ~
o h~'~ ~ ~y ~ of$1~ b~n ~ m~n~ ~1~ ~
~ to r~e t~ smo~g.
for To~o R~-~ ~ T~o ~Omt~ ~d ~c ~
~r ~ R~.
~ ~e ~ to ~ ~o~ ~c~s to ~d ~n~p~on of
to~ p~uc~.
o ~i~ ~ indu~ ~em ~g my ~
r~g ~ 8ea~ co~,~e~ of ~o~g.
It is u~own ~w ~vc.~ pro~s will ~. It should be ~, however, ~ m~ ~ ~
c~o~ ~t w~l ~ ~~ ~ a ~s~t ~ ~c ~ur~nL s~h ~ ~v~ng ~d ~uc~on
~s ~ co~ smo~g, ~y e~ in ~[ifo~a ~d ~e su~d ~ ~i~ ~
~n~.
Differenc~ Between the Set~ement and ~c~ous A~eemen~
~e c~ent a~cm~l ~ ~e c~n~on of effo~ to ~le s~te ~ws~ ag~ ~ t~
co~ ~ ~ve ~n ongo~ for ~v~ y~s. .
The 1~ "Glob~ SetUem~t"
~ ~d-l~, ~e ~o~ys ge~ of~ ~ ~d ~e compa~ world ~t ~c ~d
~cnt" a~cnL Under ~s a~nL ~c comp~ wo~d ~ ~ ~jor ~
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What W'dl It Mean for California? The Tobacco Settlement Page 12 of 17
payments to thc s~res. 'l'nesc p~yme, aU would bc in cxchaflge for certain enactment of laws by
Conslv~ which would bare essentially halted nmc. h of the litigation against the tobacco indus~ nd
placed certain re4. trictious on future litig'a~lon a~'ainst the induslzy, including no punitive dama~, no
~ actions, and an annual,cap on damage payments. Although f~cml l¢~hlation was inUoduc~d m
~a~t thc global ~le, me~ as well as legislation thai wcnt far t~yond that settlement, Con~ did
not pass any lcgislaQon. 'Fha currant multistatc ~e~cmeat re~quircs no le§islal:ive action by Congr~s.
T~ current setller~-~t docs not provide f6t l~ymcnts as large as thc global settlement. Thc global
se~nt proposed $368 billion over 25 years in payments to the stales as opposed.to thc cum~
8~emenl which is $206 bi]llon over 25 years.
From a public health standpoint, probably t~ most sis33ificanc policy difference between I:~ two
setli~menr, is that the global settlement world have changed current fecleral law ~o allow th~ U.S.
Fo(xi a~d Drug Admi~ist:ra~ion (FDA) to regulate tobacco. In addition, thc global ~
conraizlcd ~omewha~ broader lv~ltictions on the content of tobacco company advcr~ug than thc
curre~ settlcmont, *lthough the current a~eement contains broader restrictions on the placea3cut of
advertising. Thc global settlement contained so-called "]ook-b~ck" provisions tha~ would h~e
ponalizcd tobacco companies if youth smoking did not dccllne over tim~ However, only thc current
settlement includes e,~blishn3ent of a national foundaQoa to study youth smoking and fund
antismokin8 adve~inS.
Settlements With the Four Other Sta~
As indicau~d earlier, fou~ stales 0~lorida, Minnesota, ~fississippi, and Texas) all have previously
~cttlcd ~hcir cases against the tobacco companie.~ with conditions and provision~ similar to those of
thc current se~emeat. Thc amount of money projected for California under ~ curt'cat scRlelr~lzt, On
a per capita basis, is similar to ti~ am~u~s p~ojected for Florida ~d Texas. HOwever. in MissJ.~ippi,
which was the Qrst state to file a lawsuit, and in Minnesota, wh~h .~tled just prior to the end of thc
trial, the per capita amounts were much greater than for Ca~Lfornia in ~he currant mulQstar~
a~cmcnL
Relationship of the Settlement to Proposition 10
Proposition t0, enacted by the~ yon:rs in thc November 1998 election, created thc California Chiid~n
and Families Fiz~£ Prograr~ This program will fund early chilc~oo(t developraeut programs from
revenues generated by i~crca~es in the s{a~ excisc'~x on cigarettes and other tobacco [~ucr~. Thc
measure' increases the excise tax oa cigar~tr~ by 50 cents per pa¢k beginning January 1, 1999,
brin~n~ [he total sta~ excise tax to
8'/c.~nL~ per ~k. The rne~ur~ also wi]] incrca~ th~ exci~ ~ax otl0the~ Dj]3es of tobacco ptothlcts
(such ~ c~ars, chewing tobacco, pipe tobacco, an~ snuff) bcginnin$ 3uly 1, 1999.
A. Ir~ou~l both the tobacco agt'c~.ment and Proposition 1(3 ~ll gcne~te substal3dal a¢ldicional
r~venue$ to the sta~c and local ~ovcrnmenL~ in California, theh' simi]az~t, ics end them. T~ 133ajor .
difference hetwccn r~c ~o-is tha! Proposition ~0 mve. aue.~ can only be usc(l for specified purpo~$
allocated by local commissions, whereas there arc no rcstriction~ oa thc use of the tobacco setl]emeut
monies by the s~atc or local governments..
l~ur~ 5 compares thc major features of the tobacco s~tt]ement and Proposition 10. Appendix 2
shows o~' estima~ of thc rcvr. aues to the individual counties resulting from the measuro for 1998-99
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06/31./00 Tt~ 09:$1. F.L~ 80S 860 3].00 KERN CO .al)MTN I~IOX4
What Will It ~can for California? 'l'ne Tobacco Setllement Pa~ 13 ~f
(partial-year implementalion) and 1999-00 (full-year implementnflOn). (For sdd;ti0nal inffonnaflon on
Proposition 10, please see ou~ r~cent report Proposition lO: lfow Do~ It Wort and Wha~ Rol~
the Leg~latur~ Pray in ltz Impttmematton?
Lcomp -lson of Toby:co Semem nt and Prop ___Caon lO
i Tobacco Settlement -' I Propaslti_~ 10
Revenue $800 million to $1 billion annually, ~_690 million in 1999-00
split 50-50 between stat~ and local tleclinin$ slightly in subsequent'
Use of funds No restrictions P.,~rict~t to child chvelolan~nt
~. program,
~-oJeeted revenue Significant tmcertainty, especially in Likely to d~cline slowly
__ "~e long run
Control of funds S~al~ and locally elected officials County-appointed commission
~nd qrarp~
I~nw f~nds g~n~.rat~d Payments fi'Om tobacco companies New stat~ ~ on tobacco
.~a.~cd on m consun~) Im3ducts
What Should the Legislature Do?
Az indiczt~ previously, the agreement does no~ reqni~ any action by the Legislature in order to take
effect. However, the agreement raises a number of issues that the Legls|an~e will nccd to consider.
Recognize Funding Uncertainties tn the Long Run
Despite thc unccrtainti~ outlined above, wc b~lievc that it is r~lativ~ly certain that th~ sta~ will
receive thc projected amounts of mW. hues from tl~ settlement at least in thc short run (the next three
ye. ars or so). However, ~ever~l of the uncertainties, such as potential declines in smoking and future
actions of the federal government, make the long.term funding levels much mom questionable.
Given the loug-term uncertainties about the revenues, we recornm~nd that the Legislatttm refrain
from dedicating the tobacco settlement monies to support specific new ongoing programs. Rather, we
believe that it would be more fiscally prudent to reexamine thc scttlcmcnt projections rcgulartY'and
continue to deposit thc money in thc General Fund without sl~cifi¢ carmarldfl~ for a particular
program. Should the Legislature wish to establish flew programs, such programs should compete for
revenues fxom the Genera] ~und with aL1 other legislative priorities. Our rccomm~t~:! approach is
¢oriaiatent with thc (}ovcrnor'3
1999-00 budget proposal.
Recognize Benefit to Local Goyernments
Since thc property tax shifts of thc early 1990s, thc Lcs~slat~re has taken numy actions to bolster thc
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JoAn W Stinson , .
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08/31/00 'II~H OO:$X FAX 805
Wbal WiU It Meaa fo~ C~ifota~? The Tobacco Scr~emeat Page 14 of 17
~ coaditioa of ~'s local ~ovemnen~. Fe~ example, ~e ~lam~ ]~ ~ ~ ~
~ ~d c~fi~: ~~ 172 ~ m mv~, ~ ~ ~ ~ ~ ~ ~
~ ~wn ~ ~ ~ ~ t~o sc~nt is ~ to pm~ m l~ ~v~n~
$1~3 minion ~ ~ ~ y~, ~s~ m ~ut ~ m~on ~u~y wi~ e few 7~. ~ ~ ~ of
~ ~ ~d~ ~ ~, ~ ~ ~u~ w~ ~t~ (or ~ve) ~ l~s
~d ~ges, whi~ ~ ~g ~fic~y ~ ~ ~g~ ~L ~ n~ ~d ~ ~
~c~nt m~ ~y '~ ~- ~ ~ hole ~ ~ ~ pm~ ~ ~ ~ ~
~la~ ~n~pl~ ~0~ f~ 1~ fi~ miff ~ ~ ~ we ~d ~ ~
Monitor New Nafio fitobacco
~ ~e~nt ~!~ a ~fio~ fou~ation ~ combu s~ng a~ ~lu~ a m~ of
Sl.15 b~on ~ ~n ~m~ m~o ~ f~ ~fi~m of a ~ ~ ~1
~blk ~c~ ~ ~ ~ ~1~ ~ ~ to ~dy p~ to ~ ~ ~8. ~ ~
not c~ ~w ~ ~ni~ w~ ~ u~ a ~ ~ Howev~, it ~ ~cly ~at ~h ~ ~
~l~t ~ ~le~t ~ sm~'s ~ing eHo~ ~ c~ t~o coemption. ~r ~ ~ it
w~ ~ i~t r~ ~ a~on ~ ~e ~sl~ ~ cl~ly ~ni~ ~~on of
~der Ad~ ~e M~d ~lagon ~duded
~ ~cnt ~nt ~lu~s ~1 lc~ ~ would p~t ~ ~ ~ ~ ~
s~ ~m ~ ~ a ~t o[ leu of m~ct ~ ~ ~ ~o ~c m~t by ~w mb~
~mp~. ~ vi~ of~ fis~ issue, we ~lie~ t~t ~ ~~ may w~t m c~ ~
· e m~l le~sla~.
Concision
~ tob~ ~nt ~ ~t in si~c~t ~ resou~cs to ~o~'.s s~te ~ ~
'~ un~n~ su~8 ~ level of,fun~ ~ ~tc wi~ ~eivc in ~ ~c ~ r~k~n ~to
Appendix 1
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What Will h Mean for California? Thc Tobacco $ctQcmcnt Pa~: 15 of 17
4
S
1!
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What WUI It Mean for California? Thc Tobacco $cRlement Pago 16 of 17
,d
Appendix 2
.c.=..,y ~ rm., ! ]~-0o ~;o.., I r,~-~ Ii
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~l 'N~ I~ 33? Sm ~e~o 23.683~: 45.~
· ~.~
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BAKERSFIELD
MEMORANDUM
September 24, 1999
TO: Budget and Finance Committee
FROM: Alan Tandy, City Manager .
SUBJECT: Air Terminal Funding - BrOad Range of Options
Depending upon the priority the Committee and City Council place on this issue, the
following are the broad-based options available to the Council. They are not prioritized or
in any order:
A) Keep the transfer of the Municipal Airpark and $500,000 fund balance open.
for a year or two. Perhaps in time, the County will consider the offer more
positively.
B) If the project is an extremely high priority, agree to the $3,000,000 funding
on the 20-year debt retirement basis at the estimated cost of $309,200 per
year at 6% interest.
C) Recommend that the County use the $8,000,000 in new money from the
tobacco settlement for this high priority project. If it is not received, or if its
use becomes restricted making the terminal ineligible, then agree to B,
above.
D) It is early in the fiscal year. Hold on any decision until more information
becomes available, discretionary funds become available to the City, the
tobacco tax settlement becomes more clear, etc.
AT:al
/
B'O A R D O F S U P E R V I S O R S'
COUNTY OF KERN.
October 12, 1999
CityCouncil
· City of Bakersfield
1501 Truxtun Avenue
Bakersfield, CA 93301
Jori McQuiston REQUEST FOR FINANCIAL ASSISTANCE FOR FUNDING THE NEW
District 1 AIR PASSENGER TERMINAL AT MEADOWS FIELD AIRPORT
Steve A. Perez
District 2
Dear Members of the Council:
Barbara Patrick
District 3
The planning phase for building a new air passenger terminal at Meadows
Re,herb W. Pe,er,on Field Airport is well under way. As we approach the 15% architectural
Dis~,:t 4 design phase, we must finalize our financial plan and determine the size of
Pete H. ?an-a terminal we can afford. Up-scaling or down-scaling after the 15% .point will
District 5 generate additional architectural fees. To that end, it is time to obtain
funding commitments in order to have our architects design the building we
l ll,STruxtun Avenue can afford to build.
Bakersfield, CA 93301
(805) 868-3585
The project will require approximately $20,850,000 to complete the slightly
Denise Pe.nnel]more than 50,000 square foot terminal and support facilities. Possible
Clerk of the Board funding 'sources identified to date are as follows:
County of Kern $8,000,000
Federal Aviation Administration (Discretionary) $4;050,000
Federal Aviation Administration (Entitlement) $3,910,000
Passenger Facility Charge $1,890,000
City of Bakersfield $3,000,000
The costs associated with a new terminal are significant, and we ask for
your. financial assistance in completing this important project. The actual
monies are not needed until 2003. Therefore, we are asking for your
commitment for financial assistance and would ask that you decide by
March 1't of 2000. Without your assistance, the terminal building will
KERN
COUNTY
City Council
City of Bakersfield
October 12, 1999
Page 2
'necessarily be down-scaled. As you can appreciate, we feel that the City's
participation in funding this project is imperative.
A new terminal is in your interests too because:
· Approximately 60% of the passengers using Meadows 'Field are City
residents or others travelling to the city for business.
· The new air passenger terminal will have a major positive economic
impact on the City.
· The terminal will greatly improVe the City's ability to attract new
businesses and retain established businesses.
Therefore, IT IS REQUESTED that your Council (1) approve the City to
provide financial assistance in the amount of $3,000,000 by the City of
Bakersfield to construct a new air passenger terminal building at Meadows
Field Airport; and (2) authorize the City Manager to develop a proposed
agreement with the County of Kern for funding $3,000,000 of the cost of a
new air terminal building.
Respectfully,
,Board of Supervisors
County of Kern
Cc: Members, Board of Supervisors
!
g:\word~boardofs\city_cou.doc
ADMINISTRATIVE REPORT
MEETING DATE: January 26, 2000 AGENDA SECTION: Consent Calendar
ITEM: 8.j.
TO: Honorable Mayor and City Council APPROVED
FROM: Raul Rojas, Public Works Director DEPARTMENT HEA
DATE: January 13, 2000 CITY ATTORNEY/~--~'z'--~
CITY MANAGER ~
SUBJECT: Acceptance of 1998-99 Transportation Development Act Funds Financial Statement.
RECOMMENDATION: Staff recommends acceptance of the financial statements.
BACKGROUND: In compliance with the Kern Council of Governments Rules and Regulations, the
California Public Utilities Code section 99245, and the California Code of Regulations section 6664, the
attached financial statements for the Transportation Development Act Funds were prepared for the fiscal
year ending June 30, 1999. '
The financial statement summarizes fiscal activity for the Streets and Roads Fund, and the Bikeway and.
Pedestrian Fund. The accuracy and the fairness of the presentation is the responsibility of the City. The
audit firm of Brown Armstrong Randall and Reyes has issued an unqualified opinion
PW-GL:rnq~
January 13, 2000, 9:52AM
G:\GROUPDAT~ADMINRPT~2000~January 26\TransDevAct. wlxl
CiTY Of BAKERSFIELD
TRANSPORTATION DEVELOPMENT ACT FUNDS
FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
CITY OF BAKERSFIELD
TRANSPORTATION DEVELOPMENT ACT FUNDS
TABLE OF CONTENTS
Pa,qe
FINANCIAL SECTION
Independent Auditor's Report ................................................................................................... 1
Financial Statements
Streets and Roads Fund
Balance Sheets ................................................................................................................. 3
Statements of Revenues, Expenditures, and
Changes in Fund Balance ................................................................................................ 4
Bikeway and PedeStrian Fund
Balance Sheets ................................................................................................................. 5
· Statements of RevenueS, Expenditures, and
Changes in Fund Balance ............................................................................................... 6
Notes to Financial Statements ....................... : ......................................................................... 7
Other Reports
Auditor's Report on Compliance and on Internal Control
Over Financial Reporting Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing
Standards and the Rules and Regulations of the Transportation
Development Act .................................................................................................................... 9
Peter C. Bmr, CPA
Bu~on H. A~n~ CPA
le~ E. ~ndaU, CPA/A~V INDEPENDENT AUDiTOr'S
~nja~ P. Rey~, CPA
.~drew J. Paulden, CPA
Ha~eyJ. M~o~, CPA To the Ci~ Council
Ci~ of Bake~field
Bakersfield, California
,~dma Ru~efford-~l, CPA
Steven R. Sta~uck, CPA
Ail~n K~ter, CPA We have audR~ ~e a~mpanying financial statements of the Struts and Roads FUnd, and
· e Bikeway and P~ian Fund of ~e Ci~ of Bakersfield, California, as of June 30, 1999
Ly~ R. ~a~, CPA and 1998, and for ~e y~m ~en end~. The financial statements are ~e r~nsibili~ of ~e
Stacy L. Wa~te~, CPA Ci~ Of Bake~field, California's, management. Our responsibili~ is to express an opinion on
c~ M. ~om~u~h, CPA these financial statements based on our audit.
Iac~u~e L ~ton, CPA We conduct~ our audit in accordance with generally accepted auditing standards. Those
Joan M. ~de~o~, CPA standards r~uire ~at we plan and peffo~ the audit to obtain reasonable assurance about
whether ~e financial statements are free of material misstatement. ~ audit includ~
r M. H~k~, CPA examining, on a test basis, evidence supposing the amounts and disclosur~ in ~e financial
~u,,~,~e v. ~er, CPA statements. ~ audit also includ~ ass~sing ~e accoun~ng principl~ us~ and signifi~nt
E~c~.X~,CPA estimates made by management, as well as evaluating ~e overall financial-statement
presentation. We believe ~at our audit provides a reasonable basis for our opinion.
As discuss~ in Note 1, the financial statements present only the Streets and Roads Fund
and the Bikeway and Ped~trian Fund and are not intended to present fairly the financial
position of ~e Ci~ of Bakersfield, California, and the results of its operations and the ~sh
flows of its prop~eta~ ~nd ~pe in ~nfo~i~ wi~ generally accept~ a~unting p~ncipl~.
In our opinion, ~e financial statements referr~ to in the first paragraph pr~ent fairly, in all
mate~al r~, ~e financial posi~on of ~e Sffeets and Roads Fund and ~e Bikeway and
P~an .Fund of ~e Ci~ of Bakemfield, California, as of June 30, 1999 and 1998, and ~e
results of its operations for the year then ended in conformi~ with generally accept~ -
accounting principle.
MEMBER of SEC Practice Section of the American Institute of Certified Public Accountants
In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued reports dated October 27,
1999 on our consideration of the Streets and Roads Fund, and the Bikeway and Pedestrian Fund of the City
of Bakersfield, California's, internal control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts and grants.
The City of Bakersfield's TDA financial statements does not present the disclosures required by Government
Accounting Standards Board Technical Bulletin 98-1, Di$c/osures about Year 2000/$~ues, as amended by
Governmental Accounting Standards Board Technical Bulletin 99-1, that the Government Accountin~l
Standards Board has determined are necessary to supplement, although not be a part of, the basic financial
statements. In addition, we do not provide assurance that the City of Bakersfield's TDA is or will become year
2000 compliant, that the City of Bakersfield's TDA year 2000 remediation efforts will be successful in whole
or in part, or that parties with which the City of Bakersfield's TDA does business are or will become year 2000
compliant.
BROWN ARMSTRONG RANDALL
REYES PAULDEN & McCOWN
ACCOUNTANCY CORPORATION
Bakersfield, California ...
October 27, 1999
2
CITY Of BAKERSFIELD
STREETS AND ROADS FUND
BALANCE SHEETS
JUNE 301 1999 AND 1998
1999 1998
ASSETS
Cash with City Treasurer $ 3,974 $ 8,435
Accrued Interest Receivable 44 967
TOTAL ASSETS ~=====4=,=~ ~=~====~=,=~
LIABILITIES AND FUND BALANCF
Liabilities
Accounts Payable $ - $ 5,303
Fund Balance
Unreserved 4,018 4,099
TOTAL LIABILITIES AND FUND BALANCE ~===~r,,~!~ ~
The accompanying notes are an integral part of these financial statements.
3
CITY OF BAKERSFIELD
STREETS AND ROADS FUND
STATEMENTS OF REVENUES, EXPENDITURES, AND.
CHANGES IN FUND BALANCE
FOR THE YEARS ENDED JUNE 30. 1999 AND 1998
1999 1998
REVENUES
Interest Income $ 189 $ 4,041
EXPENDITURES
Streets and Roads 270 88,597
EXCESS (DEFICIENCY) OF REVENUES OVER
EXPENDITURES (81 ) (84,556)
FUND BALANCES AT BEGINNING OF YEAR 4,099 88,655
FUND BALANCES AT END OF YEAR $ 4.018 $ 4.099
The accompanying notes are an integral part of these financial statements.
4
"- I
CITY OF BAKERSFIELD
BIKEWAY AND PEDESTRIAN FUND
BALANCE SHEETS
JUNE 30, 1999 AND 1998
1999 1998
ASSETS
Cash wi~Treasurer $ 191,360 $ '54,044
AccruedlnterestReceivable 549 743
Duefrom LocalAgencies '. 9,386 _
TOTALASSETS ~ ~
LIABILITIES AND FUND BALANCF
Liabilities
Accounts Payable $ 7 $ -
Due to KemCOG 45,558 27
Deferred Revenue 155,959 54,760
Total Liabilities 201,524 54,787
Fund Balance (Deficit)
Unreserved ('229) -
TOTAL LIABILITIES AND FUND BALANCE ~ ~
The accompanying notes are an integral part of these financial statements.
5
CITY OF BAKERSFIELD TDA FUNDS
BIKEWAY AND PEDESTRIAN FUND
STATEMENTS OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE .~'~'
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 ~.
1999 1998
REVENUES
Local Transportation Funds $ 16,586 $ -
Investment Income 1,805 127)
Total Revenues 18,391 (27)
EXPENDITURES
Pedestrian and Bicycle 18,620 85
EXCESS (DEFICIENCY) OF REVENUES OVER (229) (112)
FUND BALANCES AT BEGINNING OF YEAR - 112
FUND BALANCES (DEFICIT) AT END OF YEAR $ _(229) $ -
i'
The accompanying notes are an integral part of these financial statements.
6
CITY Of BAKERSFIELD
TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE~
The financial statements of the Transportation Development Act ('FDA) Funds of the City of Bakersfield (City)
have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to
government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting
body for establishing governmental accounting and financial reporting principles. The more significant of the '
City's accounting policies are described below.
Description of the Reportinq Entity
The TDA provides funding of public transportation through regional planning and programming agencies.
Funds are allocated to the City through the county transportation planning agency, Kern Council of
Governments (KERNCOG).
The TDA Funds account for the City of Bakersfield's share of the Transportation Development Act allocations,
which are legally restricted for specific purposes as detailed in applicable sections of the Public Utilities Code.
As the TDA Fund's financial statements do not include all funds and component units of the City, they are not
intended to present fairly the financial position and results of Operations of the City in conformity with generally
accepted accounting principles. The financial statements are intended to reflect the financial position, results
of operations and compliance with the Transportation Development Act only for the Streets and Roads Fund
and the Bikeway and Pedestrian Fund.
Basis of Accounting
The City uses funds to report on its financial position and the results of its operations. Fund accounting is
designed to demonstrate legal compliance and to aid financial management by segregating transactions
related to certain government functions or activities.
The operations of the TDA funds of the City are accounted for in a separate set of self-balancing'accounts that
comprise the Funds' assets, liabilities, fund balance, revenues and expenditures.
The Streets and Roads Fund and the Bikeway and Pedestrian Fund are accounted for as special revenue
funds within the governmental category using the modified accrual basis of accounting whereby revenues are
recognized when they become measurable and available and expenditures are recognized when the'liabilities _
are incurred.
The City reports deferred revenue on its balance sheet. Deferred revenues arise when a potential revenue
does not meet both the "measurable" and "available" criteria for recognition in the current period. In
subsequent periods, when both revenue recognition criteda are met, or when the City has a legal claim to the
resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is
recognized.
7
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inter'fund Receivables/Payables
During the course of operations, numerous transactions occur between individual funds for goods provided - ~'
or services rendered. These receivables and payables are classified as "due from other funds" or "due to other
funds" on the balance sheet. Short-term interfund loans are classified as "interfund receivables/payables."
Fund Equity
Designated fund balances represent tentative plans for future use of financial resources.
Comparative Data
Comparative data for the pdor year are presented in the accompanying financial statements in order to provide
an understanding of changes in the fund's financial position and operations.
NOTE 2 - CASH AND INVESTMENTS'
Cash balances of the TDA funds are pooled with those of other funds and invested by the City to maximize
investment opportunities and yields, Investment income resulting from this pooling is allocated among the
funds based upon each respective fund's average cash balance in relation to the aggregate investment
balance. Further information regarding the City's cash and investment may be found in the City's
Comprehensive Annual Financial Report.
NOTE 3 - DEFERRED REVENUES
The Local Transportation Fund (LTF) and State Transit'Assistance Fund (STAF) allocate funds to the City to
fund its Transportation Development Act (TDA) operation. The TDA requires that any funds not used must
be returned to their source. LTF and STAF allocations are considered earned when they are propedy spent
on approved projects. Allocations received but not earned are recorded as deferred revenues. The following
table summarizes the changes in the deferred revenue account for the fiscal years ended June 30,:
1999 1998
Bikeway and Pedestrian Fund:
Deferred Revenue, Beginning of Year $ 54,760 $ 51,656 '
Funds Received 153,400 3,104
TDA Funds Allowed (6,643) -
Funds Returned to KemCOG (45,558) - -
Deferred Revenues, End of Year $ 155:959 $ 54.760
8
OTHER REPORTS
PeterC. Bmr, CPA REPORT ON GOMPLIANGE AND ON INTERNAL
GONTROL OVER FINANG[AL REPORTING BASED ON
Bu~onH. A~n~CPA AN AUDIT OF FINANGIAL STATEMENTS PERFORMED IN
[e~E.~daII, CPA/ABV AGGORDANGE WITH GOVERNMENT AUDiTiNG STANDARDS
~nja~P. Rey~,CPA AND THE RULES AND REGU~TIONS OF THE
Andmwl. Paul&n, CPA T~NSPORTATION DEVELOPMENT AGT
Ha~ey J. M~o~, CPA
To the GJ~
~d~a Ru~eao~-ml, CPA GJ~ of
Steven R. S~uck, CPA ~akersfield, California
Ail~n K~ter, CPA
b~ R. ~s~, CPA We have audited the fl~a~cJal statements of the Streets a~d Roads Fund a~d the Bikeway
Sta~' L Wal~e~, CPA a~d P~est~an Fund of ~e G~ of Bakersfield, Galifomia, for ~e year e~d~ do~e 30, 1999,
Ch~M.~ombur~,CPA and have ~ssued our tepo~ thereo~ dated October 27, 1999. We conducted our audit
a~orda~ce with generally ack,ted aud~ng s~ndards a~d ~e GOVERNMENT AUDITING
Jacquel~e L ~ton, CPA STANDARDS, ~ssu~ by the Gomptroller General of the U~t~ Stat~. Our audR was
jo~ M. ~der~n, CPA made to dete~i~e ~at a[Io~ons made and ~nd~ by ~e Gi~ were made ~n
w~th the Tra~spo~atio~ Development Act (TDA). Those standards require ~at we plan and
· ~t. ~, CPA peffo~ the audit to obta~ reasonable assura~ about whe~er the financial s~temen~ are
Juha~e V. ~er, CPA free of mate~al m~sstateme~t.
Eric H. ~, CPA
Gom~l~a~ce
As pa~ of obtaining reasonable assurance about whether the Gi~ of Bakersfield's TDA
financial statements ate ~ee of mate~al misstatement, we pefform~ tests of its compliance
with ~aJ~ provisions of laws, r~ula~ons, contracts aad grants, non~mpl~ance ~ wh~
could have a d~rect and mate~al effect o~ ~e determ~na~on of financial statement amounts.
However, providing a~ op~n~o~ o~ compl~an~ wJ~ ~ose pmvJs~ons was not an obj~ve
out audit aad, accordingly, we do no expr~s such an opinion. The r~ults.of our t~ts
d~sclosed no i~sta~ces of noncompliance ~at are r~uir~ to be repo~ed under
GOVERNMENT AUDITING ST~DARDS.
Internal Control Over Financial Repodinq -
In planning and pe~o~ing our audit, we considered the Ci~ of Bakersfield TDA's internal
control over financial repo~ng in order to determine our audi~ng procures for ~e pu~ose
of expressing our opinion on ~e financial statements and not to provide assurance on the
internal ~n~ol over financial r~ng. Our ~nsiderafion of ~e internal ~n~ol over financial
repoding would not necessarily disclose all maffers in the internal consol over financial
repoding that might be material weaknesses. A material weakness is a condiaon in which
the d~ign or operation of one or more of ~e internal consol ~mponents d~ not mdu~ to
a relatively Iow level the dsk ~at misstatements in amounts that would be matedal in relation
to the finandal statemen~ b~ng audit~ may ~ur and not be det~ ~in a timely peH~
by employees in the normal course of pedorming their assigned ~nctions. We not~ no
maEers involving the internal control over financial repoding and its operation that we
consider to be material weaknesses.
9
M[~ID[R of SEC Practice Section of the American Institute of Certified Public Accountants
This report is intended for. the information of management, the City Council, the Kern Council of Governments,
and the State Controller's Office. However, this report, which is a matter of public record and its distribution
is not limited.
BROWN ARMSTRONG RANDALL~"
REYES PAULDEN & McCOWN
ACCOUNTANCY CORPORATION
Bakersfield, California
October 27, 1999
10
BAKERSFIELD
Economic and Community Development Department
ME M 0 RAND U'M'
February 4, 2000
TO: Alan Tandy, City Manager; ~
FROM: Jake Wager, Economic Development Direc
SUBJECT: Information regarding recommended CDBGIHOMEIESG expenditures
for Fiscal Year 2000-200'1.
Attached are three separate items that will help the Budget and Finance Committee for its
meeting on Monday, February 7, 2000.
The first item provides a narrative matrix description of applications received by non-profit
organizations for CDBG, HOME, or ESG funds. In that memorandum we have indicated
the project and location, the amount of funding requested, amount recommended for
funding (if any), federal eligibility and a brief description of the proposed project.
In the second attached memorandum we have listed all of the various requests generated
from our City departments. Those requests are listed in order of priority as determined by
the originating department. The memorandum indicates the amount requested and the
amount recommended for funding.
The last item provides an overview of all request for all amount recommended for funding.
I will be in attendance at the Budget and Finance Committee. All three attached items
accurately reflect our consultations with you in establishing staff's recommendation.
Joining me will be George Gonzales and David Chesney. Staff has advised all non-profits
that applied for assistance of the committee meeting by fax and by regular mail.
dlk:P:\MEMOTEMP.WPD
B A KE R S F I E L.D
Economic and Community Development Department
MEMORANDUM
February 4, 2000
TO: Jake Wager,' Economic Development Director
FROM: George Gonzales,~munity Development Coordinator
SUBJECT:' Non-Profit Applications submitted for FY 20'00101 Funding Update.'
This is an-update to the memorandum dated December 16, 1999, regarding the non-profit
applications submitted for FY 2000/01 funding. The deadline for the submission of
Community Development applications for FY 2000/01 funding was November 24, 1999.
This year fifteen (15) applications were submitted from non-profit and public entities
totaling $2,510,926. The amount vastly exceeds the average amount the City of
Bakersfield has annually made available to non-profits. Since 1995 the City has provided
an average $305,000 per year of assistance to non-profits. The following table
summarizes'the applications received by this department for FY 2000/01 CDBG, HOME,
and ESG. While the entire analysis of each application is not yet complete the information
provided below is an accurate representation of each proposal.
· :,.,:. ~,~ , ,,, ..... ~:~.~.. ,. .,.¢ommun~Development: Block .Grant
Greenfield Union Construction of a 7,800+ sq.fl. $1,501,575 Total CostAdditional
School District facility to house Health Clinic, information
Child Care Center and Health requested
from
Greenfield Sta~ Office on 5 acres. $1,126,181 City applicant for
Community District owned propeay. $375,394 County eligibility.
Pa~nership Project Noaheast corner of Monitor
and Fai~iew. Still under
consideration by
Ward 1 County CDBG
No funding recommended.
dlk:C:~lyFiles\funding 2000 2001 mere Page 1 of 5
Valley Achievement Acquisition assistance to $700,000 Total Cost Yes
Center purchase a 14,400 sq. ff.
facility on a 1.45 acre lot
Prima~ Living located at 7300 Ming Avenue $25,000 City
Program to se~e individuals with $25,000'County
autism. (Downpayment only.) CDBG
$650,000 Not
Ward 5 specified.
Has applied to County
CDBG
No funding recommended.
Mid State Establish a funding pool for $100,000 Additional
Development eligible child care providers to analysis is
Corporation help sta~-ups and expansions needed.
of child care facilities in the
Child Care Finance City. Operational costs are
and Suppo~ included as pa~ of this Has not applied to the
Program proposal and are not allowed County.
under CDBG regulations.
City-wide
No funding recommended.
Bakersfield Garden 'Rehabilitation of the YMCA $457,792 Total Cost Yes
Community building at 900 22"~ Street to
Enhancement expand an existing child care
Project, Inc. program for at risk children $304,792 City
through the fine ads. $53,000 County
The Garden Child $100,000 Agency
Care and Youth Ward 2
Center Rehabilitation County is not funding.
Project. CDBG
No funding recommended.
dlk:C:\MyFiles\funding 2000 2001 mem Page 2 of 5
A ~leant.~:' :': ...... Description ~ Location~- '~ Eshrnated.:~;~, v .~,.~':~:~,~C°st .~.-
Kern County Construction of a 82,000 sq. 7,325,000 Total Cost Yes
Economic E. facility at the southwest
OppO~unity corner of Feliz Dr. and
Corporation Washington St. to relocate the
Food Bank (25,000
KCEOC Se~ice Community Se~ices Center $275,000 City
Center (25,000 sq.E.) KCEOC $7,050,600 Other
Administrative offices (30,600 Funding
sq.E.) and a child care center
(2,000 sq.~.). Phase 2 - Final
commitment previously Has applied to County
considered FY 99/00. CDBG funds to
se~ice the 40% I
Ward 1 County residents. ·
Recommend funding. FY 2000/2001 - $275,000
Housing Authority of Install HVAC to replace $30,000 Total Cost Yes
the County of Kern obsolete system at the 1,660
sq.~. recreation center located
at 1102 South Robinson St.
Oro Vista Recreation The facility will sewe the 780 $30,000 City
Center HVAC public housing residents with
installation project, education and drug prevention
activities. Has not aPplied to the
County.
Ward 1
Recommend funding. FY 2000/2001 - $30,000
Greater Bakersfield Funding the operation cost of $108,536 Total Cost Yes, for
Legal Assistance, a housing counseling owners or
Inc. educational program to cities only.
promote awareness of
Homeownership homeownership oppo~unities
Preparation for Iow-income home $83,350 City
mentoring project, purchases. Proposal will hire $25,186 Agency
four employees.
City-wide
No funding recommended.
dlk:C:~VlyFiles~funding 2000 2001 mem Page 3 of 5
:,:.i:i.::;:::ii'.; ".C tY i;.:!!?
Hamilton Larkin, Inc. Financial assistance to $11,401,290 Total Yes
construct a 3-story, 160 senior Cost
East Hills Senior units on a 5.2 acre parcel
Living located at 3452 Bernard St. $780,000 City
· $2,669,000 Loan
Ward 3 $7,316,936 Tax Credit
$635,354 Owner
Additional information requested.
Kern County The continuation of KCEOC's $195,540 Total Cost Yes
Economic First Time Homebuyer /
Opportunity rehabilitation program.
Corporation (CHDO) $120,000 for Iow-income
families. In addition, the
Homebuyer and funding of a new homebuyer /
Maintenance maintain training program $150,000 City
Training Program ($30,000). $45,540 Agency
and First Time
Homebuyers City-wide
Program
Additional information requested.
Housing.Authority of Downpayment and closing $294,000 City Yes
the County of Kern cost assistance for 84 First
Time Homebuyers living at the
First Time Oro Vista Housing Project to *Based on 12/15/99
Homebuyers acquire their units. Lakeview meeting with the
Assistance Program Ave./Robinson St. Housing Authority,
application may be
Ward 1 withdrawn.
Application withdrawn.
..... ~, ,~,..i ~' ' -. ~,: :,:~.~,~; ... :::~-::,; ~;...~!:~ ~ :,;::::::.~:~:::~::~,,~;~::,,~.:..:.
Kern County To continue to fund shelter $35,000 Yes
Department of voucher services to mentally
Mental Health disabled homeless persons.
Services
City-wide
Kern Linkage
Program Shelter
Voucher Services
3300 Truxtun
Avenue, Suite 290
Recommend funding $20,432*.
dlk:C:\MyFiles\funding 2000 2001 mem Page 4 of 5
Alliance Against To continue to provide suppo~ $25,000 Yes
Family Violence and for battered women's shelter
Sexual Assault 1921 and other suppo~ se~ices
19~ Street activities.
City-wide
Recommend funding $15,996'.
Kern County Mental To continue to operate the $18,745 Yes
Health Association representative payee program
for mentally ill/homeless
Homerun Program clients. In addition to
345 Chester Avenue rehabilitate the KCMHA facility
at 345 Chester Ave.
City-wide
Recommend funding $11,676*.
Bethany Se~ices To continue to operate and $75,000 Yes
Bakersfield maintain the BHC to provide
homeless se~ices and
Homeless Center housing.
1600 East Tru~un
Avenue Ward 2
ReCommend funding $37,946*.
Bakersfield Rescue To fund emergency shelter $133,650 Yes
Mission and se~ices operation for
homeless individuals.
Homeless
Inte~ention Se~ices This is the Rescue Mission's
Center 830 Beale first year to submit for ESG
Ave. funding. The proposed
funding would allow staff to
monitor and review their
capacity to comply with ESG
regulations and guidelines.
Ward 2
Recommend funding $8,000*.
*ESG applications submitted were reduced on a prorated basis to equal the City's FY 2000/2001
entitlement.
dlk:C:~MyFiles\funding 2000 2001 mern Page 5 of 5
-- Economic and Community Development Department
ME M O RAND UM
February 2, 2000
TO: -~ Jal~e Wager; Economic Development Director
FROM: George Gonzales,~. unity Development Coordinator
'"' ...... SUBJECT: Intr~-(~ty Pr(~_osal~ Received for FY 2000i01 CDBG Assistance
The deadline for submission of proposals for-FY 2000/01 was November 24, 1999. We
received 24 proposals totaling about $3.9 million. Staff met with other City
Departments to determine their priorities for the various projects that were submitted.
Below are project descriptions, cost estimates, and recommendations for next fiscal
year. Projects are listed in order of priority as determined by submitting department.
PUBLIC FACILITIES AND IMPROVEMENTS
Lake Street Improvements (Phase 9) Public Works Recommend
Reconstruction of Lake Street from Haley Street to Williams Funding - $50,000
Street to facilitate traffic flow and drainage of the area.
Because prior years funds were available, the recommended
funding amount will complete the entire project.
Estimated Cost - $118,000 (Ward 2)
Casa Loma #6 Street Improvement ) Public Works Recommend
Pro/ect (Phase 4 Funding - $275,000
Completion of curb and gutter within the Casa Loma #6 area.
Estimated funds expended in FY 99/00 - $275,000.
Estimated Cost - $378,000 (Ward 1)
Lincoln School Area Street Pro/ect (Phase .1)) Public Works Recommend
Street lights in an area bordered by East Truxtun Avenue on Funding - $77,032
the.north, Gage Street on the east, California Avenue on the
south, and Inyo Street on the west.
Estimated Cost - $ 77,032 (Ward 2)
DIk:S:\DEBBIE'S\CIPprop00-01 .wpd 1
PUBLIC FACILITIES AND IMPROVEMENTS
East Bakersfield Drainage Study) Public Works Recommend
To conduct a drainage studyin an area bounded by Hwy. 178 Funding - $0'
on the north, City limits on the east,~-Brundage Lane on the
.south and Union Avenue on the west. Proposal is a
planning/admin .cost and is not a CIP project coSt.
Estimated Cost - $168,000 .(Ward 2)
-Bemard Street Li.qfiting Ul~.q_rade} Public Works Recommend
South side of Bernard Street from:Stockton.Street to Alta Vista Funding - $0
Drive.
Estimated Cost - $ 8,000 (Ward 2)
California Ave. Streetscape Project EDCD Recommend
Streetscape improvements in the public right-of-way of Funding - $150,000
· California Avenue from Chester Avenue to .Union Avenue.
Estimated Cost - $1.50,000 (Ward 1 & 2)
Street Median Landscaping within EDCD Recommend
Redevelopment Areas Funding - $150,000
Street median landscaping within Redevelopment Project
Areas.
Estimated Cost - $150,000 (Wards 1 & 2)
Downtown Streetscape Expansion Project EDCD Recommend
Streetscape improvements within the public right-of-way of 17th, Funding - $100,000
18th, 19% 20th and 21St:streets between Eye to K streets.
Project to be phased and additional grants to be pursued for
funding.
Estimated Cost - $200,000 (Ward 2)
Baker Street Lighting Improvements (Phase 1) -- 'EDCD Recommend
The installation of pedestrian oriented street lights on Baker Funding - $20,000
Street from Jackson to Kentucky streets.
Estimated Cost - $20,000. (Ward 2)
Pacheco #10 Area Sewers EDCD Recommend
Installation of sewer lines and laterals in the area bounded by Funding - $33,000
Centaur Street, Faith Avenue, Elysium Street, and Pacheco (design only)
Road. Design phase complete by November 2000.
Estimated Cost - $526,000 (design cost - $33,000) (Ward 7)
Gwendolyn Street Area Sewer Project EDCD Recommend
To install a sewer line to serve the Gwendolyn Street area. It's Funding - $14,000
an area bordered by Clara Court, Hughes Lane, Fairview Road,(design only)
and Gwendolyn Street. Design phase complete by November
2000.
Estimated Cost - $ 215,000 (design cost - $14,000) (Ward 7)
DIk:S:\DEBBI'E'S\CIPprop00-01 .wpd 2
PUBLIC FACILITIES AND iMPROVEMENTS
'~..~th Street Culd-de-Sac Project EDC'DRecommend
Placement of a cul-de-sac on 11th Street at the west side of its Funding - $0
intersection with Lakeview Avenue. Initial request was from the
Housing Authority of the County of Kern. ..
Estimated Cost - $57,000 (Ward 1)
Jefferson Area Water'improvement Project Fire Recommend
To bring the Jefferson area up to City fire protection standards. Funding - $0
The project area is bounded by Bernard Street on the north,
Kern Street on the east, Hwy. 178 on the south, and Union (does not qualify
Avenue on the west. for assistance)
Estimated Cost - $890,800 (Ward 2)
California Ave. Area Sidewalk Public Works Recommend
ReConstruction Project Funding - $81,000
Reconstruct existing deteriorated sidewalk within an area
bordered by California Avenue on the north, Union Avenue on
the East, Brundage Lane on the south, and Chester Avenue
on the west.
Estimated Cost- $81,000 -(Ward 1)
MLK Community Center Exterior Restoration Parks Recommend
Exterior painting of the 22,000 sq. ft. MLK Community Center, Funding - $36,500
1000 Owen Street.
Estimated Cost - $36,500 (Ward 1)
Saunders Park Playground ADA Modifications Parks Recommend
Removal of existing playground equipment and rePlacement Funding - $0
with permanent accessible playground apparatus and
rubberized surfacing.
Estimated Cost - $99,128 (Ward 4)
Lowell Park Playground ADA Modifications Parks Recommend
Removal of existing playground equipment and replacement Funding - $0
with permanent accessible playground apparatus and
rubberized surfacing.
Estimated Cost - $126,730 (Ward 1)
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PUBLIC FACILITIESAND IMPROVEMENTS
Planz Park Playground ADA Modifications ParkS Recommend
Removal of existing playground equipmentand replacement Funding - $0
with permanent accessible playground apparatus and
rubberized surfacing.
Estimated Cost - $ 88,325 (Ward 7)
Wayside Park-Playgrou/3d ADA Modifications : ~- Parks Recommend
Removal of existing playground equipment and replacement Funding - $0
with permanent accessible playground apparatus and
rubberized surfacing.
Estimated Cost- $142,220 (Ward 1)
Jefferson Park Court Resurfacing Parks Recommend
Surface restoration of tennis and basketball courts at Jefferson Funding - $0
Park.
Estimated Cost - $31,430 (Ward 2)
Lowell Park Recreational Improvements Parks Recommend
Replacement of eight dilapidated portable picnic tables with Funding - $0
permanent tables and BBQ pits on concrete slabs.
Estimated Cost - $ 9,620 (Ward 1)
MLK Park Recreational Improvements Parks Recommend
Replacement of 12 dilapidated portable picnic tables with Funding -$0
permanent tables and BBQ pits on concrete slabs.
Estimated Cost- $14,430 · (Ward 1)
Graffiti Removal General Services Recommend
Removal of graffiti within various Iow-income areas within the Funding - $162,000
City including education and outreach.
Estimated Cost - $221,550 FY 99/00 funding was $162,000.
(Various Wards)
Clearance and Demolition Building Recommend
Removal of vacant substandard buildings and improvements in Funding - $53,000
targeted areas and neighborhoods.
Estimated Cost - $90,000 FY 99/00 funding was $53,000
(Various Wards)
Please let me know if you have any questions.
DIk:S:\DEBBI E'S\CIPprop00-01 .wpd 4
Community Development Block Grant Fund
Proposed Uses for FY 2000/01
I oo/ol I oo/o'!
DeScription · Requested Recommended
FY 2000/01 Resources
Entitlement Allocation 2,787,000 2,787,000
Program Income 100,000 100,000 ~
Program Savings 0 145,000
ESG Allocation 99,000 99,000
Total Resources 2,986,000 3,131,000
Administration
Planning & Administration 390,000 390,000
Indirect Charges 115,000 115,000 ·
Sub-Total 505,000 505,000
Public Services
Enterprise Zone 15,000 15,000
: Graffiti 221,550 162,000
Looking Good Neighborhood 10,000 10,000
Fair Housing !03,500 80 000
Sub-Total .: 350,050 267,000
HOusing
'Clearance 90,000 53,000
Acquisition 350,000.... 343,000
Lead Based Paint Abatement 0: 0
i Home Access 58,000 58,000
, Program Costs 45,000 45,000
Sub-Total 543,000 499,000
Economic Development
Business Loans 152,000 152,000
Other 0:'," 0
Sub-Total 152,000 ' 1'521000
Non-Profit Assistance
Greenfield Union School District 1,126,181
Valley Achievement Center 25,000
Child Care Financing (Mid State Development) 100,000 '*
The Garden Childcare & Youth Center 357,793
KCEOC 275,000 275,000
HACK 30,000 30,000
Sub-Total 1,913,974 305,000
ESG Allocation
Alliance Against Family Violence 25,000 15,996
County Mental Health System of Care 35,000 20,432
Bethany Services 75,000 37,946
Kern Mental Health Association 18,745 11,676
Bakersfield Rescue Mission 133,650 8,000
ESG Administration (5%) 4,950 4,950
Sub-Total .292,345 99,000
CD Direct Delivery (ClP's) 25,000 25,000
Total Operating Expenditures 3,78'1,369 i,852,002
CIP'slDebt Service . ,
Section 108 Loan Payment 340,375 340,375
Lake Street Improvements 118,000 50,000
Casa Loma #6 Street Improvements 378,000 275,000
Street Light Upgrade - Lincoln School 77,320 77,320
East Bakersfield Drainage Design 168,000 0
Bernard Street Lighting Upgrade 8,000 0
Sidewalk Reconstruction - Ward 1 81,000 81,000
CA Ave Streetscape Project 150 000..'. 100,000
Downtown Streetscape Expansion 200 000 ' 100,000
Baker St, Lighting Improvements 20 000. . 20,000 i.~ I ~ .
Median Landscaping in CDBG eligible areas 150 000 150,000
Pacheco #10 Area Sewers 526 000 33,000
Gwendolyn Street Sewer Upgrade 215 000 14,000
Jefferson Area Water Main Replacement 890 800 0
11th St; & Lakeview Ave Cul-de-Sac 57 000 0
MLK - Commnty Cnter Exterior Restoration 36 500 36,500
Saunders Park ADA Playgrnd Modifications 99 128: 0 ':
Lowell Park ADA Playground Modifications 126.730. ' 0
Planz Park ADA Playground Modifications 88,325.. 0 ' '
Wayside Park ADA Playground Modifications 142,220 0
Jefferson Park - Resurface Courts 31,430 0
Lowell Park - Replace Picnic Tables 9,620 0 ~=.i.
MLK - Replace Picnic Tables 14,430 '. 0
Sub-Total ClP Expenditures "~. 3,927,878 1,277,195
Total Expenditures 7,709,247 3,129,'197
Amount Under / (Over) Resources (4,723,247) :: 1,803