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HomeMy WebLinkAbout02/01/2011 B A K E R S F I E L D Committee Members: Russell Johnson, Chair Assistant to the City Manager Ken Weir Sue Benham AGENDA SUMMARY REPORT REGULAR MEETING OF THE BUDGET AND FINANCE COMMlllEE Tuesday, February 1,201 1 12:OO p.m. City Hall North -Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 The meeting was called to order at 12:01 PM ROLL CALL Committee members present: Councilmember Russell Johnson, Chair Councilmember Ken Weir Councilmember Sue Benham Staff present: Alan Tandy, City Manager Ginny Gennaro, City Attorney Rhonda Smiley, Asst to the City Manager Joshua Rudnick, Deputy City Attorney Steven Teglia, Asst, to the City Manager Nelson Smith, Finance Director Greg Williamson, Police Chief Sandra Jimenez, Asst. Finance Director Lyle Martin, Asst. Police Chief Randy McKeegan, Accounting Supervisor Mike Payne, Police Lieutenant Bob Trammel, I.T. Director Donna Kunz, EDCD Director Raul Rojas, Public Works Director Rhonda Barnhard, Assistant EDCD Director Georgina Lorenzi, Asst, to the PW Director Ryan Bland, Associate Planner Other present: Steve Wornack, General Manager SMG Eric Xin, Brown Armstrong CPA's Gretchen Wenner, Media Jialan Sue, Brown Armstrong CPA's AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, February 1, 2011 Page 2 S:\Council Committees\2011\Budget and Finance\February\February 1 Agenda Summary.docx 2. ADOPT MARCH 3, 2010 AGENDA SUMMARY REPORT Adopted as submitted 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Discussion and Committee Recommendation Regarding CDBG Allocation Recommendation – Kunz Economic Development Director Donna Kunz summarized the Annual Entitlements received by the City through the U. S. Department of Housing and Urban Development (HUD). These entitlements help to improve the quality of life in low to moderate income neighborhoods. This is the first year of the new five-year HUD approved plan. The HUD Community Development Block Grant Program (CDBG), HOME Investment Partnership (HOME) and Emergency Shelter Grant (ESG) entitlements for FY 2011-12 are $5,514.998. Staff is projecting program income from repayments due to refinancing and payoffs in the amount of $7,000 for CDBG and $30,000 for HOME. The total proposed budget for CDBG, HOME, and ESG for FY11-12 is $5,514,998. It was suggested by Committee Chair Johnson to approve each item separately. FY 2011-12 Proposed CDBG: The total resources available for FY 2011-12 are $3,641,857. This amount includes the CDBG Entitlement of $3,634,857, and the project program income of $7,000. The total resources are allocated as follows: • Total Administration – 20% Cap: $728,371 • Long Term Obligations: $406,327. These on-going, long-term obligations are repayments of Section 108 Loans. The Motion was unanimously approved by the Committee. • Public Services -15% Cap: $515,000. Services include graffiti removal in HUD eligible areas, The Bakersfield Senior Center, Downtown Area Police Patrol, and Fair Housing. Chair Johnson asked Director Kunz if the Committee could recommend to the Bakersfield Senior Center that they try to find ways to be more self sufficient and cut the funds given to them by the City. Director Kunz agreed to pass on the recommendation to the Center, and would try to help them come up with ways of fund raising to help cut back on funds provided by the CDBG block grant. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, February 1, 2011 Page 3 S:\Council Committees\2011\Budget and Finance\February\February 1 Agenda Summary.docx The Motion was unanimously approved by the Committee. • Low-Mod Benefit -$467,159. At this time Committee Chair Johnson stepped out of the room because of possible conflict of interest since he is a volunteer Board Member for the Boys and Girls Club of Kern County. Services include Bakersfield Senior Center, Police Activity League, Boys and Girls Club, and Acquisition and Demolition in HUD areas. Committee Member Benham made a motion to approve staff’s recommendation, contingent upon the Boy’s and Girl’s Club acquiring the balance of the money needed for these improvements. If they cannot obtain the balance of the money, then it would come back for an amendment and Committee consideration. The Motion was approved, with Committee Member Johnson absent. FY 2011-12 Proposed Capital Improvement Projects: Net resources available for Capital Improvement Projects (CIP) are $1,440,000. Staff submitted the following for consideration: • Central Park water spray park; • Fire Station No. 1: paint exterior and install new windows; • California Avenue and P Streets: curb, gutter, and sidewalk with street refurbishment; and • Oleander Street: curb, gutter, and sidewalk with street refurbishment. The Committee unanimously approved staff’s recommendation. Director Kunz then presented the following programs that also would be included in the CDBG program: Home Investment Partnership (HOME): The total funding available for FY 2011-12 is $1,725,784, 10% of which was set aside for administrative costs. This amount includes the HOME Entitlement of $1,695,784, and $30,000 of projected program income. The Committee unanimously approved the proposal. Proposed Housing Programs: Staff estimates that the total Program/Project Costs and Direct Delivery for FY 2011-12 is $1,478,206. This Program/Project cost includes $1,223,838 in new construction, $254,368 in HUD HUD mandated Community House Development Organization (CHDO) sponsored projects, and $75,000 for Direct Delivery, which HUD allows for operating costs. The Committee unanimously approved the proposal. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, February 1, 2011 Page 4 S:\Council Committees\2011\Budget and Finance\February\February 1 Agenda Summary.docx Emergency Shelter Grant (ESG): Staff proposes $147,357 in ESG to fund the Bakersfield Rescue Mission Homeless Intervention Services ($60,000), Bethany Homeless Shelter ($60,000), and Alliance against Family Violence (16,305). Also included is the $7.5% Administrative Cap of $11,052. The Committee unanimously approved the proposal. B. Discussion and Committee Recommendation Regarding Annual Audit Report FY ending 2010-Smith Finance Director Smith provided a review of six separate audit reports that were included in a hard copy to the Committee. 1. Comprehensive Annual Financial Statement There were no significant issues with the audit. 2. Agreed Upon Conditions Report This is also known as the Management Letters. There are two letters involved, and the first one is an Agreed-Upon Conditions Report Designed to Increase Sufficiency, Internal Controls, and /or Financial Reporting”. There are current year and prior year findings. During the audit process, the auditors make note of internal control issues or other things that come to their attention, and they then make recommendations to City staff. If those conditions continue for multiple years, they will continue to be addressed until they are resolved to the satisfaction of the auditors. The following are the conditions found: • There was a calculation error in a report filed with the HOME Program involving the home match requirement. The next report will be correct. • There was a problem identified by the auditors with the highway planning and construction time sheet. Recommendations have been made to tighten up the controls for time keeping records. • In regard to the controls for information technology services, the auditors recommend full adequacy tests for our disaster preparedness and contingency plans. It was explained by Finance Director Smith that there is no money in the Information Technology (I.T.) budget for such testing. I. T. Director Trammell explained the process that would be involved with this comprehensive testing, and estimated the cost to be $250,000. Committee Member Weir suggested looking for opportunities, such as grants, to see if there might be money available for this. Committee Chair Johnson suggested that staff contact the County and partner with them on the new facility located on Mt. Vernon Avenue. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, February 1, 2011 Page 5 S:\Council Committees\2011\Budget and Finance\February\February 1 Agenda Summary.docx 3. The Single Auditor Report is the schedule of Federal expenditures. A hard copy was presented to the Committee that provided a detailed listing of programs and expenses incurred during the year for those particular items. 4. The Independent Auditor’s Report contains the Bakersfield sub-regional Wastewater Management Plan, and a two-page letter addressed to the Technical Advisory Committee of the Plan. There is a very old agreement with East Niles and the Kern Sanitation Area that requires the City to have this audit review done to certify compliance to the terms of the agreement. This letter confirms compliance. 5. Appropriations Limit -This is a letter addressed to the Mayor and Council regarding the State Government appropriations limit. There is a calculation that has to be done every year to certify that the City is budgeting the correct amount. 6. Rabobank -This is an independent audit report for the Rabobank Arena, Theater, and Convention Center, that was conducted by a separate firm. There was a question by Committee Member Weir as to whether the money to support the Arena and Convention Center was General Fund money. City Manager Tandy stated that the Transit Occupancy Tax is used as the basis for the Arena funding. The Committee unanimously recommended that the reports be forwarded to the full City Council for approval. C. Update on Assessment District Delinquencies – Smith Committee member Weir had requested periodic updates on the status of assessment district delinquencies. Finance Director Nelson summarized this report for the Committee. There are a number of parcels that the City has already initiated collection activity upon, but judicial foreclosure of these parcels is a lengthy process. The City is pursuing collection on bond covenants because the City received loans and is obligated to pay it back. The City is under under no obligation to make any payments on the bonded indebtedness, but will make every effort to collect the annual assessments to make the payments. This makes the City a trustee or fiduciary between the property owners and the bond holders, and an administrator to collect the assessments and make the bond payments. City Manager Tandy stated that the creation of assessment districts to fund infrastructure is a service that the City used to provide to developers. Some developers believed that it was a lower cost or less impactful way to finance street, curb, gutter, sidewalks and sound walls; and when the economy began to deteriorate, under Council direction, that practice stopped because of the increase in delinquencies. Finance Director Smith stated that these delinquencies will not have a negative effect on the City’s debt capacity or credit rating. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, February 1, 2011 Page 6 S:\Council Committees\2011\Budget and Finance\February\February 1 Agenda Summary.docx D. Discussion and Approval of the 2011 Committee Meeting Schedule – Teglia Due to the fact that Committee Member Benham will be out of the country in March, the March 28, 2011 meeting was removed from the calendar and the calendar was then approved. The next meeting is scheduled for April 25, 2011. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting adjourned at 1:58 p.m.