Loading...
HomeMy WebLinkAbout6/4/2024 Item 6a, McDonald and Jackson - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: June 4, 2024 TO: Mayor and Council FROM: Emily Jackson, Finance Director VIA: Whitney McDonald, Interim City Manager SUBJECT: ITEM 6a - ADOPTION OF THE FY 2024-25 SUPPLEMENTAL BUDGET Staff received the following additional questions, regarding the FY 2024-25 Supplemental Budget. Questions related to the request from SLO REP were addressed in a separate agenda correspondence provided to Council on June 3. The questions are below with staff’s response shown in italics: 1) Table 4a.2 shows that General Fund staffing costs in FY 2024-25 are budgeted to increase by $1.5 million compared to what was projected in the 2023-25 Financial Plan. What is driving this increase? The primary driver of staffing cost increase compared to the Financial Plan is the required payment to CalPERS to paydown unfunded pension liabilities, which is $1.3 million higher than what was initially projected for FY 2024-25 in the 2023-25 Financial Plan. Significant Operating Budget Change recommendations add $0.4 million to the Staffing budget. The impact of these items is partially offset by $0.2 million in expected savings due to typically observed turnover and benefits elections. 2) Tables 4b.1 and 4b.2 show budgeted expenditures for the Avila Ranch and San Luis Ranch Community Facilities Districts (CFDs). What do each of the expenditure line items fund? Below is a detailed line-item budget for each CFD. Total Budget 512,770.39$ Annual Budget 1,309,883.00$ Debt Service Payment - Principal 175,000.00$ Authorized Services Budget 466,147.27$ Debt Service Payment - Interest 775,200.00$ CFD Administration - Consultant Fee 6,945.75$ City Staff Costs 26,530.00$ CFD Administration - City Staff 8,054.25$ CFD Administration - Consultant Fee 8,103.00$ Fire Protection 84,480.80$ Trustee Fees 2,200.00$ Police Protection 131,414.58$ Other Authorized Uses (pay as you go)322,850.00$ Maintenance 59,341.89$ Other Contract Services 45,910.00$ City Water Service 25,000.00$ City Sewer Service 15,000.00$ Electric Service 25,000.00$ Solid Waste Service 15,000.00$ Other Utility Service 25,000.00$ Other Misc Materials & Supplies 25,000.00$ Authorized Infrastructure/ Facilities Budget 46,623.12$ Reserve Fund 46,623.12$ Avila Ranch CFD Budget Line Details San Luis Ranch CFD 2023-25 Financial Plan Item 6a. Adoption of the FY 2024-25 Supplemental Budget Page 2 (Note: For the San Luis Ranch CFD, the Debt Service payments are related to bond proceeds which will be used towards the Prado Interchange project. Pay- As-You-Go revenue is split 50/50 between the City and Developer, which provides reimbursement for costs of acquisition, construction, and improvements of Authorized Facilities. Pay-As-You-Go is calculated by the CFD Administrator and is the amount remaining after annual costs are subtracted from special tax revenues. City Staff Costs support a portion of the City’s cost for administering the San Luis Ranch CFD.) 3) Table 5.1 shows total Local Revenue Measure (LRM) expenditures of $31,855,000. Where does this number come from, and can we reasonably expect to receive this much in LRM in FY 2024-25? Staff forecast $31,855,000 in LRM receipts based on the advice of our long-time sales tax consultant. The models underlying this forecast include assumptions for year-over-year growth in revenue by industry group and are adjusted for anomalies and new business openings and closures. Staff have reviewed the forecast assumptions and are confident that we can reasonably expect to receive these funds. We do caution that the forecast makes no prediction of a change in economic conditions, and should a recession occur during the fiscal year, we may not realize the budgeted revenue amount. 4) The Supplemental Budget recommends additional funding from various sources for the North Chorro Greenway project. What is the total amount recommend by source and what is driving the need for additional funding for this project? Table 7.1 shows the total funding going to the North Chorro Greenway Project, including $150,000 from the CIP Completed Projects Account and $225,000 from LRM. The need for funding is related to the unanticipated need to remove two large eucalyptus trees within the Highway 101 right of way, additional construction management services, and higher costs related to public art for the remaining project components under the Highway 101 overpass. 5) Table 6.1 current debt issuances. What are the issuances budgeted in the Debt Service Fund for? The Debt Service Fund’s obligations represent debt issuance for General Fund capital projects, including: • 2012 lease revenue refunding bonds - refunding of prior bonds which were issued to purchase property and build athletic fields, purchase property for police station expansion, and purchase Downtown Plan properties. • 2014 lease revenue bonds - Los Osos Valley Road overpass • 2018 lease revenue refunding bonds - refunding prior bonds which were issued to construct several high priority capital improvement projects and to finance the costs of acquisition and construction of public parking facilities, and the public safety communications and emergency operations center project Item 6a. Adoption of the FY 2024-25 Supplemental Budget Page 3 6) The Capital Improvement Plan true-up includes additional funding for the Mid-Higuera Bypass project. Are there any attempts to get more Zone 9 funding for this project? The Mid-Higuera Bypass project includes additional Water Fund contributions to the to the project to address the necessary relocation work of water infrastructure. Some cost increases related to silt removal or vegetation thinning are Zone 9 eligible for additional reimbursement in compliance with the City/County Zone 9 funding agreement. The next opportunity to request additional Zone 9 funding for items covered by the agreement is in Fall 2024, if funding is granted it would be appropriated in July 2025. Staff intends to request additional funding from Zone 9 at that time. 7) The Capital Improve Plan true-up includes additional funding for the Salinas Reservoir Transfer of Ownership Plan. What is the intent of this project? The Salinas Reservoir Transfer of Ownership Plan is also referred to as the Salinas Reservoir Feasibility Study. This work is intended to identify the measures that would be required to transfer the Salinas Dam from federal jurisdiction (from the Army Corps of Engineers) to the City of San Luis Obispo or County of San Luis Obispo, which would result in the dam falling under California Department of Safety of Dams (DSOD) jurisdiction. This project is also identified under the City’s Legislative Platform. If approved, this project will have costs shared between the City of San Luis Obispo ($700,000), County of San Luis Obispo ($700,000), and State of California, through Assembly Bill 102 ($500,000). 8) What is the difference between Smart Water Meters (also called AMI) and Flume water meters? Flume water meters are manufactured by a private company for the purposes of creating remote sensing equipment that can attach to the outside of older positive displacement water meters. The Flume device allows individual properties owners who have purchased / installed these devices to see their water consumption and use patterns. As the City transitions to newer water meter technologies, staff are proposing to install Smart Water Meters to all meters in the City over a three year period. An AMI system would also allow the City to achieve water meter reads in a timely manner as they would not need to be manually read, and allow for quicker customer response when changing account holders. These devices would allow for the users to see their own water use patterns as well as allow City staff to immediately be notified in the event of water leaks - the Flume system does not allow the City to receive usage data.