Loading...
HomeMy WebLinkAbout05/09/2006 B A K E R S F I E L D Mike Maggard, Chair Irma Carson *. Harold Hanson Staff: John W. Stinson SPECIAL MEETING NOTICE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Tuesday, May 9, 2006 - 10:00 a.m. City Manager's Conference Room, Suite 201 Second Floor- City Hall, 1501 Truxtun Avenue, Bakersfield, CA AGEN'DA 1. ROLL CALL 2. ADOPT MARCH 8, 2006 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Update Report and Committee recommendation regarding Refuse Hauling Contract extension negotiations - Rojas/Barnes 5. NEW BUSINESS A. Discussion and Committee recommendation regarding sewer connection fee increase - Rojas/Smith B. Discussion and Committee recommendation regarding dispensing with bidding proCedures - Gennaro 6. COMMITTEE COMMENTS 7. ADJOURNMENT A Mike Maggard, Chair lan ' ~ ' ' h mtensen, Assmtant C;ty Manager Irma Carson For: Alan Tandy, City Manager Harold HanSon AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Wednesday, March' 8, 2006- 10:00 a.m. City Manager's Conference Room - Suite 201 City Hall, 1501 Truxtun Avenue, Bakersfield, CA 1. ROLL CALL Councilmember Harold Hanson Called the Meeting to Order. at 10:10 a.m. Present: CoUncilmembers Irma Carson; and Harold Hanson Councilmember Mike. Maggard, Chair, seated at 10:17 a.m. 2. ADOPT FEBRUARY 8, 2006 AGENDA SUMMARY REPORT Adopted as.submitted. (Committee Chair Mike Maggard absent) 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Report and Committee recommendation on PoliCy regarding Land Based , Financing I Community Facility Districts (CFD's and Assessment Districts) Finance Director Nelson Smith gave a brief history. Recently the City has entered into development agreements with local landowners associated with the Old River Ranch, Rosedale Ranch and a pre-annexation agreement regarding the McAIlister Ranch project. Each of these agreements includes a commitment by the City to provide a mechanism for financing public facilities and/or services commonly known as Community Facilities Districts (CFD); also known as Mello-Roos financing. An Ordinance regarding these special tax districts was reviewed by this Committee and forwarded to the Council for first reading on February 22nd. In AGENDA SUMMARY REPORT Page 2 BUDGET AND FINANCE COMMITTEE MEETING Wednesday, March 8,.2006 addition to the ordinance, the City needs to adopt a policy document to provide guidelines regarding the formation of CFD's. CFD's provide large subdivision developments with a financing mechanism to finance public facilities and services, such as fire and police. Homebuyers in these develOpments will be paying for these improvements on their property taxes. Finance Director Nelson Smith provided an overview of the draft policy. The proposed draft policy was prepared by the Finance. Department after requesting input from a variety of sources including, developers, Bond Underwriters, Special Bond Counsel, the BIA (who did not respond), and City staff. The City has had a policy in place for several years for Assessment Districts. Highlights of changes being proposed by staff to the current Assessment District financing (PoliCy Resolution 86-95) were: Maximum Term of Bonds - The current maximum on district bond issues is 20 years. The proposed draft policy allows for bond issues to generally range from 20 to 30 years, with the maximum term not to exceed 35 years. Minimum Bond Amounts - Staff is proposing the minimum bond issuance requirement be raised from $1 million (current district policy) to a minimum of $2 million. There are some definite economies of scale in processing larger bond projects, and because the majority of these costs' get passed on to !homebuyers, it is prudent to raise this minimum threshold. Value to Lien Ratio - The current policy states: "The value to lien ration for .each individual property within a district shall be at lease 3:1. The City Council .is also desirous of a value to lien ratio of at least 4:1 district-wide." In order to stay on the conservative side, staff is recommending strengthening the !language to make the 4:1 ratio "required" rather than "desirous." Developer ;input on this issue indicated a desire to reduce the ratio to a 3:1 ratio district- wide. Level Debt Service vs. Tax Escalation Clause - Staff is recommending the City not allow the special tax to escalate, thus maintaining a level debt service on any bonds issues for two reasons: 1) If property values drop, taxes can be reduce, while the special taxes would continue to escalate; and 2) It does not seem appropriate to tax property owners at an escalating rate for public assets that depreciate over time. The development groups would have preferred to allow for a 2% annual escalation of the special tax within the CFD's. ~Committee Member Irma Carson made a motion that the Committee approve the Community Facilities District Policy and recommend forwarding the Policy to the Council. The Committee unanimously approved the motion. AGENDA SUMMARY REPORT Page 3 BUDGET AND FINANCE COMMITTEE MEETING Wednesday, March 8, 2006 5. NEW BUSINESS A. Report and Committee recommendation on Fiscal Year 2006-07 Community Development Block Grant (CDBG), Home Investment Partnerships (HOME), and Emergency Shelter Grant (ESG) Annual Spending Plan Economic Development Director Donna Kunz gave a report on the U.S. Department of Housing and Urban Development (HUD) annual .entitlements the CitY receives to improve Iow-income neighborhoods..The Federal Government has reduced HUD funding again this year. The CitY's entitlements for Fiscal · Year 2006-07 have an overall reduction of 9.2% from $5,620,980 in 2005-06 to $5,144,124 for 2006-07. The Fiscal Year 2006-07 HUD entitlements are: $3,391,309 for CDBG funding; $1,608,770 for HOME Investment Partnership Program (included is this amount is $22,537 allocated to the American Dream Downpayment Initiative); and $144,045 for Emergency Shelter Grant funding. Community Development Coordinator George Gonzales gave an overview of the applications that were received from nonprofit organizations and public entities and the proposed allocations, which were included in the packet. Marque R. Stansberry, Ebony Counseling Center, Spoke regarding their application, which was not included in the proposed allocations for funding. Their request was for replacement of 7,000 square-feet of roof surface. He, expressed he did not understand the requirement for paying prevailing wage. Committee Chair Mike Maggard requested staff to meet with Mr. Stansberry to .explain how prevailing wage becomes a requirement for a contract when the funding is coming from government dollars and also requested staff to look for .another funding source to fund Ebony Counseling Center's request. Jeff Green' spoke on behalf of the request for $25,000 from Bethany Services Inc. for repairs to the heating and cooling units at the Homeless Center. Louis Gill, Director, Bakersfield Homeless Center, spoke about 'their request and the application process for CDBG funding. Community Development Coordinator George Gonzales explained Bethany Homeless Shelter applied and is on the list to be funded from the.Emergency Shelter Grant (ESG) for $60,880 for' Fiscal Year 2006-07 for operational purposes. The request for facility repairs was not considered as they did not apply by the deadline of October 31st. AGENDA SUMMARY REPORT Page 4 BUDGET AND FINANCE COMMI'I-I'EE MEETING Wednesday, March 8, 2006 Committee Member Irma Carson expressed as their request comes under the Public Services .category, she would vote to approve one-time funding for the Homeless Center's facility repairs by transferring funding from another source. Committee Member Harold Hanson expressed he was sympathetic with the needs of the poor and homeless. However, as there are so many deserving nonprofits with no possible way to fund all the requests, he suggested ~ fund-raising within the community for facility improvements. COmmittee Chair Mike Maggard expressed since the City has a long-term history with the Homeless Center, he would like to be able to provide one-time funding so the repairs to the heaters and coolers could be made to get them through the rest of the year. Economic Development Director Donna Kunz indicated if the Committee's desire is to provide funds for facility repairs, the money could be transferred from CDBG Capital Improvement Projects for the Central Park Improvements. Committee Member Irma Carson made a motion to approve one-time funding of $25,000 for facility repairs for the Bakersfield Homeless Center by reducing CDBG funding from the Central Park Restrooms Project. Committee Chair Maggard and Committee Member Carson voted: Aye. Committee Member Hanson voted: Nay. Committee Member Irma Carson made a motion that the Committee approve proceeding with the public notice and forwarding the Fiscal Year 2006-07 Community Development Block Grant (CDBG), Home.Investment Partnerships (HOME), and Emergency Shelter Grant (ESG) Annual Spending Plan to the City Council. The Committee unanimously approved the motion. B. Discussion and Committee recommendation regarding Southeast Redevelopment Project Area request for additional property acquisition funds City Attorney Ginny Gennaro recommended this item .be discussed in Closed Session by the full City Council. The Committee .unanimously approved the recommendation. C. Wastewater Treatment Plant Expansion Overview City Manager Alan Tandy provided an update. He exPlained as the Committee is aware, prior to the Thomas Road Improvement Project, the largest capital improvement need the City had was an approximate $115 million project for the expansion of Wastewater Treatment Plant No. 3. Obviously, this involves AGENDA SUMMARY REPORT Page 5 BUDGET AND FINANCE COMMITTEE MEETING Wednesday, March 8, 2006 dealing with the tremendous growth rates of the City and the fact that the previous plant expansion has been consumed by that growth rate. The City currently has the $115 million expansion project under design and the financing documents and the mechanism to retire the debt on the financing need to be prepared. Doug Houston, George K. Baum & Company, the City's bond underwriter, presented a slideshow presentation on the rate survey and proposed financing information, which was included in the Committee packet. The rate survey was completed in 2005, and the financing plan is in progress. At the end of 2006. there will be a series, of meetings to finalize the financing plan with a presentation to Council, a review meeting with the Council and a Council workshop on the financing plan. In early 2007 there should be formal approval of the documents and then with Council approval the proposed plan is to issue the bonds. D. :Discussion and Committee recommendation'on requestfrom Bakersfield ,Homeless Center for $25,000 The Committee took action on this item under New Business, 5.A. 6. COMMITTEE COMMENTS Committee Member Irma Carson expressed she would like to review the City's policy on one-time funding for nonprofits. 7. ADJOURNMENT The meeting adjourned at 12:30 p.m. Attendance: Staff: City Manager Alan Tandy; City Attorney' Ginny Gennaro; Assistant City Manager Alan Christensen; Finance Director Nelson Smith; Public Works Director Raul Rojas; Economic Development Director Donna Kunz; Public Works Civil Engineer Marian Shaw; Assistant Finance Director Sandra Jimenez; Deputy Fire Chief Gary Hutton; Police Sergeant Scoff Faulkenberry; Community Development Coordinator George Gonzales; Economic Community Development Business Manager Rhonda Barnhard; and Wastewater Engineer Art Chianello Others: Jeff Green; Marque R. Stansberry, Ebony Counseling Center;.Essie Blue, Bakersfield Senior Center; Ken Miller, Police Activities League; Doug Houston, George K Baum & Company; Louis Gill, Bethany Homeless Shelter; and Michelle Durgy cc: Honorable Mayor and City Council S:UOHN~Council Cornrnittees\06Budget&Finance~bf06 mar 08surnrnary.doc  F~EC~iVED PlAY - 2 2006 B A K E. R $ F I E L D CITY OF BAKERSFIELD PUBLIC WORKS DEPARTMENT CITY MANAGER'S OFFICE MEMORANDUM TO: Alan Tandy, City Manager FROM: Raul Rojas, Public Works Director//;~--_~_._ DATE: May 1, 2006 SUBJECT: NEGOTIATIONS WITH PRIVATE TRASH HAULERS Referral No. 1485 ***DUAL REFERRAL TO BUDGET. AND FINANCE COMMITTEE (LEAD) AND PUBLIC WORKS DEPARTMENT*** VICE-MAYOR MAGGARD REQUESTED STAFF PROVIDE AN UPDATE AT THE NEXT BUDGET AND FINANCE COMMITTEE MEETING REGARDING THE STATUS OF NEGOTIATIONS BETWEEN THE CITY AND PRIVATE TRASH HAULERS. Staff has met with the haulers to negotiate the requested contract'time extension, and is waiting for a reply to the City's February '24th letter. However, since the separate issue of mandatory curbside recycling Came .up at'the FebrUary 27~ joint City/County meeting, the haulers have stated that the contract time negotiation answer will depend On.how the curbside recycling issue comes out. More meetings are pending, and staff will update the Budget. and FinanCe Committee at the next meeting. The May 1, 2006 Budget and Finance Committee meeting was Cancelled. C:\DOCUME-1~Iskinner~LOCALS~1~Temp~Ref81485 Pdvate Haulers.doc ' MEMORANDUM TO: . Budget and Finance Committee Members FROM: Nelson K. Smith, Finance Director /v~ DATE: May 2, 2006 SUBJECT: Proposed Increase to Sewer Connection Fees to Facilitate Financing of Wastewater Treatment Plant Expansion The City has been developing a financing plan for the expansion of Wastewater Plant #3. The City's bond consultant presented an extensive multi-city fee survey and an' overview of the draft financing plan to the committee at the March 8, 2006 Budget and Finance meeting. Part of the financing plan includes .the raising of Sewer Connection Fee charges to assist in the repayment of the debt service on the impending plant expansion. While all sewer revenues will be pledged a~lainst any debt incurred for the project, the City has historically attempted to cover the annual debt service requirements with connection fee revenues, so to match the cost of plant expansion with the associated new development growth that is driving the need for the plant expansion. Staff is proposing a "phased" approach to the fee increases to provide developem with a known plan for this fee to assist in their forecasting and planning pr°cesses. The current fee for a single family residence is $2,500. The proposed fee schedule, which is designed to provide adequate debt service, coverage for the proposed bond 'issue, will .raise the fee ' $30.0 per year for the next five years, with the .single 'family fee reaching $4,000 in July 2010. ^ draft resolution and fee schedule is attached for your review. The last time that the City Council took action to raise the sewer connection fee was back in 1997, when they adopted a multi-year "phased" approach to raising the fee up to the current $2,500 amount. This action was associated With a debt financing plan to expand Sewer Plant # 3. Staff is requesting a motion from the Committee to recommend adoption of the resolution to the full. City Council at their June 7, 2006 meeting. If the resolution is approved, the first fee increase is subject to a 60 day waiting period associated with development fees. The first increase would be effective August 15, 2006. cc: Alan Tandy, City Manager . Raul Rojas, Public Works Director Attachment - Draft Resolution and proposed fee schedule File name: nks:/p:/bond issue.~n'~mo-sewer expan bud and fin may 2006.doc RESOLUTION NO. A RESOLUTION ADOPTING SEWER CONNECTION FEES PURSUANT TO SECTION 14.12.380 OF THE BAKERSFIELD MUNICIPAL CODE~ WHEREAS, Section 14.12.380 of the Bakersfield MuniciPal Code (BMC) authorizes the establiShment each fiscal year of sewer connection fees sufficient for the .: City to recover the reasonable costs of providing sewer connection services, which include the costs associated 'with and necessitated by the upgrading and expansion of sewer facilities; and WHEREAS, the City plans to upgrade and expand Sewer Treatment Plant #3 from ~,' 16 MGD capacity (mgd = .million gallons daily) to 32 MGD capacity and finance the improvements, in whole or in part, with Sewer Revenue Bonds; and WHEREAS, City staff have computed the reasonable cost of providing sewer connection service through fiscal year 2010-2011; a[~d WHEREAS, the sewer connection fees set forth in Exhibit "A" attached hereto and incorporated by reference as though fully set forth herein, do not exceed the ~. reasonable estimated cost of providing the services for which the fees are charged; and. ~-" WHEREAS, the fees shall be due and payable upon aPplication for a building permit or permit to connect an existing building to the City sewer system. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Bakersfield as follows: 1. The above recitals and findings are true and correct; 2. The Sewer Connection Fees under Section 14.12.380 of the Bakersfield Municipal Code are hereby adopted and shall become effective on the dates and in the amounts set forth in Exhibit "A", attached hereto. Page 1 of 3 I HEREBY CERTIFY that the foregoing Resolution was passed and adopted the Council of the City of Bakersfield at a regular meeting thereof held· , by the following vote: AYES: COUNCILMEMBER CARSON, BENHAM, MAGGARD, COUCH, HANSON, SULLIVAN, SCRIVNER NOES: AGENCYMEMBER ABSTAIN: AGENCYMEMBER ABSENT: AGENCYMEMBER CITY CLERK and EX OFFICIO of the Council of the City of Bakersfield APPROVED: HARVEY L. HALL, MAYOR CITY OF BAKERSFIELD APPROVED AS TO FORM: VIRGINIA GENNARO CITY ATTORNEY. JANICE SCANLAN Assistant City Attorney Page 2 of 3 EXHIBIT "A" I. CONNECTION CHARGES All new connections or new fixture units connected to the City sewer system will require payment of a sewer connection charge. Any individual, firm, company or corporation making such connection shall pay the charge at the time the building permit is issued in accordance with the following: Dwellings Per Fixture Single Multiple' with 14 or Unit for Family Family Less Fixture Commercial or Effective Date Dwellin,qs ,Dwellin,qs Units(A) !,ndustrial Aug. 15, 2006 $2,800 $2,106 $1,782 $127 July li 2007 $3,100 $2,232 $1,973 $141 July 1, 2008 $3,400 $2,448 $2,164 $155 July 1, 2009 $3,700 $2,664 $2,355 $168 July 1, 2010 $4,000 $2,880 $2,545 $182 (A) Single family dwellings or units in multiple family dwellings with 14 or less fixture units (including shared fixtures in multiple unit complexes) as per Uniform Building Code and with two. (2) bedrooms or less. (B) Equivalency factor shall be 1.0 for all uses excepting markets, mortuaries, restaurants/coffee shops, food service shops' and bakeries which uses shall have an equivalency factor of 2.0. To determine the total connection charge, multiply the number of fixture units (as per Uniform Plumbing Code) by the per fixture charge and that answer by the equivalency multiplier. The equivalency multiplier adjusts for loadings greater or less than the residential loadings. II. ,TIMING AND BASI-~ The sewer connection charge is to be paid prior to issuance'of a building permit, and will be based on the current adopted charges at the time of issuance of the permit. Fixture Units shall be as defined in the Uniform Plumbing Code. File name:p;nks;bond issues;resolution sewer connection fees 2006.doc Page 3 of 3 MEMORANDUM CITY ATTORNEY'S OFFICE April 12, 2006 TO: BUDGET & FINANCE COMMITTEE Mike Maggard - Chair Harold Hanson Irma Carson FROM: VIRGINIA GENNARO, CITY ATTORNF~\~ .~ ROBERT M. SHERFY, DEPUTY CITY A~TTORNEY SUBJECT: DISPENSING WITH BIDDING PROCEDURES. COUNCIL REFERRAL NO. 001446 Councilmember Maggard requested staff explore all options of non-traditional ways, as well as design build, to secure construction contracts, and the feasibility of dispensing with traditional bidding procedures. Staff to work with legal to assure chartedmunicipal code compliance. Bring back a report to Budget & Finance Committee. Procedures for entering into construction contracts must comply with the Charter of the City of Bakersfield. Section 136 of the Charter provides that the City Council shall establish by ordinance criteria, including dollar amounts, requiring bidding and award of a contract. The contract must be awarded to the lowest responsible bidder that submits a responsive bid. The Council may, at its discretion, reject all bids and re-advertise for bids. According to Section 136, there are exceptions to the bidding requirements. Those exceptions include where the work or materials can only be reasonably obtained from one vendor because of restricted availability of such work or materials, or because of the need to successfully integrate such work or materials into an existing City project or system (sole source). Additionally, bidding may be dispensed with when the Council determines work to be of urgent necessity for the preservation of life, health, or property. Finally, there is an exception to allow City employees to do the work or allow materials and equipment to be purchased on the open market if no bids are received or the Council rejects all bids. In implementing Section 136 of the Charter, the Council has passed Chapter 3.20 of the Bakersfield Municipal Code. According to BMC § 3.20.060, with certain exceptions, all contracts for the erection, improvement or repair of any public buildings or works, or in furnishing any supplies, equipment or materials for the same, must be accomplished by bid procedures. Council Referral- Dispensing with Bidding Procedures April 12, 2006 Page 2 Exceptions to bidding are as follows: · Annual contracts for purchases of repetitively used items that are required in minor undetermined quantities may be negotiated by the Finance Director or his designee. (BMC § 3.20.040.) · Projects for the construction, repair or maintenance of all public works and buildings, and supplies and materials for the same, the cost of which is $40,000 or less, and contracts for the purchase of concrete, fUel and asphalt, the cost of which is $75,000 or less, may be obtained in the open market. (BMC § 3.20.060(D)(1).) The sole source exception. (BMC § 3.20.060(D)(2).) · The open market exception. (BMC § 3.20.060(D)(3).) · The urgent necessity exception. (BMC § 3.20.060(D)(4).) · When the Council, by resolution, determines that the work or materials can be obtained through the design/build construction procurement process. (BMC § 3.20.060(D)(5).) Except as set forth hereinabove, some type of bidding requirement (formal or othenNise) would apply. The erection of any public building or works or furnishings, supplies or materials for the same, where the estimated value is greater than $40,000, and contracts for the purchase of concrete, fuel and asphalt with an estimated value greater than $75,000 shall be by written contract and awarded to the lowest responsible bidder. (BMC § 3.20.090.) Where the estimated value of the public works project is $40,000 or less, and contracts for the purchase of concrete, fuel and asphalt where the value is less than $75,000, may both be made by the Finance Director in the open market without following formal bidding procedures. (BMC § 3.20.100(A).) Council Referral- Dispensing with Bidding Procedures April 12, 2006 Page 2 The Finance Director is required to solicit, where possible, 3 written quotes for single purchases of more than $10,000 and less than $40,000.01 and for single purchases of concrete, fuel and asphalt of more than $10,000 and less than $75,000.01. (BMC § 3.20.100(C).) The Finance Director shall obtain oral quotes from prospective vendors for single purchases of $10,000 or less except when (1) written quotes have been obtained; (2) the amount involved is less than $5,000.01 and the Finance Director has determined more than one quote to be impractical; (3) bidding has been dispensed with because one of the above referenced exceptions applies; or (4) the purchase may be made through petty cash procedures. (BMC § 3.20.100(E).) The Council can adjust the dollar amounts and criteria for formal and informal bids by ordinance. Other changes that would impact the Charter provisions must go to a vote of the people. VG/RMS:dll cc: Honorable Mayor and City Council Alan Tandy, City Manager S:\COUNClL\Referrals\05-06 Referrals\Maggard - BiddingProcedures.doc