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CC 2012-11-27_08.f. Local Sales Tax Allocation Annual ReportMEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER fr SUBJECT: CONSIDERATION OF ANNUAL LOCAL SALES TAX ALLOCATION REPORT AND 5-YEAR PLAN DATE: NOVEMBER 27,2012 RECOMMENDATION: It is recommended the City Council: 1) approve the Annual Local Sales Tax Allocation Report; 2) approve additional recommended appropriations for FY 2012-13; and 3) approve recommended changes to the 5-Year Local Sales Tax Plan. IMPACT TO FINANCIAL AND PERSONNEL RESOURCES: Revenue from the local sales tax in FY 2011-12 was $1,851,734, which is above original projections. Therefore, additional revenues are available to be programmed and appropriated. Revenues for FY 2012-13 are projected to be approximately $1,879,510. This and projected revenues in future years of the 5- Year Plan are based upon a conservative estimated annual increase of 1.5%. The ending fund balance for FY 2011-12 is $1,736,274. A total of $3,314,894 in FY 2012-13 expenditures are proposed, which will result in a projected ending year fund balance of $300,890. This will maintain a reserve of approximately 16% of projected revenues. The proposed 5-Year Plan recommendations maintain a balance of at least 15% each year. There is minimal additional impact to staff resources when compared to the previous 5-Year Plan for the Local Sales Tax funds. Funding is programmed for major projects to include construction management. The recommendations are designed to reflect the priorities set forth in the Critical Needs Action Plan. Item 8.f. - Page 1 CITY COUNCIL CONSIDERATION OF ANNUAL LOCAL SALES TAX ALLOCATION REPORT AND 5-YEAR PLAN NOVEMBER 27, 2012 PAGE 2 BACKGROUND: In November 2006, the voters of Arroyo Grande approved Measure 0-06, which established a half-cent local sales tax to meet City needs identified in the City's long-range financial plan. The following four categories of needs were projected: • Transportation projects, including upgrade of the Brisco/Halcyon interchange; • Infrastructure improvements, including the street, drainage and creek systems; • Public safety needs, including Police and Fire Department facilities, equipment and staffing; and • Facility upgrades to meet Americans with Disabilities Act (ADA) requirements. To ensure accountability, the measure included a provision requiring the City to publish and distribute an annual report to each household on the revenues and expenditures from the local sales tax proceeds. As a result, staff has prepared the next annual Local Sales Tax Allocation Report, which is presented in Attachment 1. The report consists of four pages. It is designed to be printed in a fold-out format. It includes both actual expenditures from FY 2011-12 and recommended expenditures for FY 2012-13. While not required by the measure, staff has also maintained a practice of annually updating the 5-year plan. This enables the Council to ensure that immediate funding commitments are consistent with plans to achieve the long- term goals of the original local sales tax measure. The recommended 5-year Plan is presented as Attachment 2. ANALYSIS OF ISSUES: Changes to the Local Sales Tax budget for FY 2012-13 and to the 5-Year Plan previously approved by the City Council include the following: • It is recommended to reduce the carryover for sidewalk and cross gutter improvements by $20,000. Additional funds were appropriated for the East Grand Avenue sidewalk improvements in error due to a mistake in the project balance. As a result, more funding is available in the project account than anticipated. It is also recommended to combine the sidewalk and cross gutter project with concrete replacement. These two projects were previously separate to differentiate funding for contract projects and supplies for in-house work. However, due to existing staffing levels, most work is now contracted out. The recommendation will maintain $115,000 in the budget for FY 2012-13 and over $70,000 for additional improvements after the East Grand Avenue project is completed, which is still well above previous funding levels. Item 8.f. - Page 2 CITY COUNCIL CONSIDERATION OF ANNUAL LOCAL SALES TAX ALLOCATION REPORT AND 5-YEAR PLAN NOVEMBER 27, 2012 PAGE3 • It is recommended to increase funding for the Police Station project by $75,000 in FY 2012-13 and by $80,000 in FY 2013-14 in order to help ensure sufficient funding is available for the proposed plan for a new Police Station. The carryover amount is also increased by $10,492 to correct an error due to the amount of expenses paid from tax increment funds approved by the Successor Agency. • It is recommended to increase funding for the Pavement Management Program by $40,000 in order to fund the Halcyon Road and Fair Oaks Avenue improvements. • It is recommended to increase funding appropriated in FY 2012-13 for the Le Point Street Parking Lot by $75,000 to replace funding used to pay for lease costs that were previously budgeted from Redevelopment funds and an increased cost for the parking lot lights. It is also recommended to increase the amounts programmed in FY 2013-14 and FY 2014-15 by $25,000 to address future lease costs. This recommendation is also designed to address the goal communicated by Council to purchase the land as soon as allowed for by the existing lease-purchase agreement. • It is recommended to eliminate the carryover of $19,7 41 in funding for replacement of the roof at the Elm Street Community Center. After extensive study, it has been determined that the replacement of the roof on that building will be complex and cost prohibitive. Given the age and condition of the building, it is instead recommended to begin work on a plan for replacement of the building. The existing plan includes $20,000 annually for "Other City Facilities". It is recommended to designate this as the Elm Street Community Center Project and increase the funding to $50,000 annually beginning in FY 2014-15 in preparation of future replacement of the structure. • It is recommended to add $20,000 for upgrades to the Corporation Yard. Staff is preparing a plan to add an office building at the site and upgrade the existing buildings for storage and maintenance. An overall funding plan for the project will be prepared and presented to the City Council within the next few months. • It is recommended to eliminate the carryover of $97,242 for the Traffic Way Extension overlay. This project was previously completed and the carryover was an error. • It is recommended to add $90,000 in FY 2012-13 for the El Camino Real resurfacing project to complete the final payment. The project remains Item 8.f. - Page 3 CITY COUNCIL CONSIDERATION OF ANNUAL LOCAL SALES TAX ALLOCATION REPORT AND 5-YEAR PLAN NOVEMBER 27, 2012 PAGE4 within the budget, but actual costs turned out to be higher with regard to street improvements and lower for water system improvements. As a result, the remaining funds are Water funds that are not eligible to pay for the final costs. • It is recommended to add $25,000 in FY 2012-13 for the Alpine Street project. Drainage improvements have been identified as needed prior to completing the street resurfacing. • It is recommended to increase funding for Drainage and Creek Improvements from $30,000 to $45,000 in FY 2013-14 and $50,000 in other future years. Due to the failure of the corrugated metal pipe on West Branch Street, staff is preparing a City-wide plan to line other pipes throughout the City. This change will help fund those improvements on an ongoing basis. • It is recommended to decrease funding for the East Branch Street Paulding Wall project from $50,000 to $25,000 in FY 2014-15. A service club has expressed an interest in taking responsibility for rehabilitation of the existing wall. Therefore, these funds will be used exclusively for future extension of the wall, which results in a lower cost projection. • It is recommended to add $40,000 in FY 2013-14 for reinforcement work to the Swinging Bridge, which has been identified as desirable in order to extend the future life of the bridge. ALTERNATIVES: The following alternatives are provided for consideration: 1. Approve staff's recommendation; 2. Direct staff to make adjustments to appropriations and approve the recommendation; 3. Provide direction to staff. ADVANTAGES: The proposed report will educate the community regarding the expenditure of the local sales tax funds, will provide transparency, and will meet the City's legal obligations as set forth in the original ballot measure. The recommended expenditures increase funding for important projects, particularly street improvements, the Police Station, and the Elm Street Community Center. DISADVANTAGES: No disadvantages regarding the recommendations have been identified. Item 8.f. - Page 4 CITY COUNCIL CONSIDERATION OF ANNUAL LOCAL SALES TAX ALLOCATION REPORT AND 5-YEAR PLAN NOVEMBER 27, 2012 PAGE 5 ENVIRONMENTAL REVIEW: No environmental review is required for this item. Environmental review will be performed individually for the projects identified within the funding report. PUBLIC NOTIFICATION AND COMMENTS: The agenda was posted in front of City Hall and on the City's website on Wednesday, November 21, 2012. Attachments: 1. Annual Local Sales Tax Allocation Report 2. Local Sales Tax 5-year Revenue and Expenditure Projections Item 8.f. - Page 5 CITY OF ARROYO GRANDE FY 2011-12/ FY 2012-13 LOCAL SALES TAX ALLOCATION REPORT In November 2006, the voters of Arroyo Grande approved Measure 0-06, which established a half-cent local sales tax to meet City needs identified in the City's long- range financial plan. The following four categories of needs were projected: • Infrastructure improvements, including the street, drainage and creek systems; • Transportation projects; • Public safety needs; and • Facility upgrades to meet Americans with Disabilities Act (ADA) requirements. To ensure accountability, the measure included a provision requiring the City to Attachment 1 publish and distribute an annual report to each household on the revenues and expenditures from the sales tax proceeds. As a result, this report summarizes all actual local sales tax expenditures for Fiscal Year 2011-12 and all budgeted local sales tax expenditures for Fiscal Year 2012-13. Total costs for some items exceed the amounts listed due to revenues provided from other sources. If you have questions or would like additional information regarding any of the items or figures outlined in this report, please feel free to contact City Hall at 473-5400. LOCAL SALES TAX ACTUAL AND BUDGETED EXPENDITURES FOR FISCAL YEARS 2011-12 AND 2012-13 FY 2011-12 FY 2012-13 Item Actual Infrastructure Newsom Springs Drainage Project $165,567 Improvements at Branch Mill Road and E. Cherry Avenue to correct drainage deficiencies- constntction is complete and was funded primarily by private development. Short Street Narrowing and Realignment $24,554 Improvements to Short Street to narrow the street and enhance pedestrian access - construction is complete. City Tree Inventory and Trimming Program $12,520 Matching funds for a State grant to prepare a City-wide tree invent01y and contract sen,ices to be used for a comprehensive street tree maintenance program. Project is complete. Montego Street Sidewalk Project $3,956 Preliminary design work to install sidewalks on the northeast side of Montego Street to provide safe pedestrian access to Ocean View School from both sides of the street. The total project cost is $259,000.funded entirely through a State grant. Traffic Way Extension Resurfacing $2,758 Resurfacing of the Traffic Way e.x:tension south of Cherry Avenue-construction is complete. El Camino Real Resurfacing Project $428,224 Resurfacing, utility, and sidewalk improvements on El Camino Real from E. Grand Avenue to Oak Park Boulevard-the total budget was $2.1 million and construction is complete. The remainder of costs were funded from Water, Sewer and Federal grant funds. Pavement Management Program $1 ,069,312 The City's annual slurry seal and microsurfacing street maintenance and improvement program. Over 60 streets have already been upgraded in FY 2012-13. Greenwood Tract Resurfacing Pavement reconstruction of the Greenwood Tract, located off of Branch Mill Road. The project is complete. $5,920 Budgeted $0 $0 $0 $0 $0 $90,000 $1,021,693 $444,080 Item 8.f. - Page 6 LOCAL SALES TAX ACTUAL AND BUDGETED EXPENDITURES FOR FISCAL YEARS 2011-12 AND 2012-13 (CONTINUED) FY 2011-12 FY 2012-13 Infrastructure (continued) Street Maintenance Item Funding for ongoing street maintenance and repairs conducted by in-house staff Sidewalk, Crosswalk, Striping, and Cross Gutter Improvements Funding for replacement and repair of damaged sidewalks and cross gutters, improvement to crosswalks, and striping of streets and intersections. Drainage and Creek Preservation Projects Funding for improvements and repairs to drainage infrastructure and enhancements to the City's creek system. Retention Basin Maintenance Ongoing maintenance of drainage retention basins conducted by in-house staff Le Point Street Parking Lot Expansion Expansion of the public parking lot on Le Point Street. Construction is complete. Additional funding is for lease and future purchase of a portion of the property that remains in private ownership. Capital Project Planning Studies Planning and engineering studies for projects when infrastructure deficiencies are identified. Crown Hill ADA Ramps and Crosswalk Construction of ADA ramps and crosswalk at Crown Hill and E. Branch Street -construction is complete. Americans with Disabilities Act (ADA) Retrofits Program to systematically upgrade and provide ADA accommodations on sidewalks throughout the City. Alpine Street Resurfacing Reswfacing portions of Alpine Street between Eman Court and Dodson Way in conjunction with utility upgrades-construction is projected in Spring 2013. Larchmont Drive Drainage Improvements Installation of subswface drainage improvements to redirect ground water that has been seeping through the asphalt onto the roadway-construction is projected in Spring 2013. Larchmont Drive Street Improvements Design of street resurfacing on Larchmont Drive when drainage deficiencies have been corrected. Total projected cost of the improvements is $150,000. The remainder of the funding is programmed in FY 13-14, when the project will be constructed. Colina Street and Via La Barranca Drainage Improvements Construction of an underground drainage system to collect and discharge rising ground water--construction is projected in Spring 2013. Platino Lane and Oro Drive Inlet Construction of an underground drainage system to collect and discharge rising ground water--construction is projected in Spring 2013. East Grand Avenue Underground Utilities Cost for installation of street light poles in association with undergrounding of utilities on East Grand Avenue. Page 2 Actual Budgeted $53,027 $97,700 $46,557 $115,000 $44,233 $45,767 $25,700 $26,214 $100,267 $100,000 $3,750 $10,000 $0 $20,000 $0 $40,000 $0 $75,000 $0 $30,000 $0 $25,000 $0 $15,000 $0 $50,000 $0 $50,000 Item 8.f. - Page 7 LOCAL SALES TAX ACTUAL AND BUDGETED EXPENDITURES FOR FISCAL YEARS 2011-12 AND 2012-13 (CONTINUED) FY 2011-12 FY 2012-13 Transportation Traffic Model Update Item Update of the Citywide traffic model to assist in update of the City's General Plan and to improve the ability to prepare traffic analysis for design of improvements and assessment of project impacts. Digital Speed Limit Sign Installation of digital speed limit sign on Huasna Road at the entrance to the City to slow traffic entering the City at the Strother Park area. Castillo Del Mar Extension Constmction, widening and drainage improvements to extend Castillo Del Mar Road from Orchard Street to Valley Road. The initial cost is for matching funds for a bike path associated with the future roadway, which has been completed. Public Safety Five Cities Fire JP A Costs associated with the Battalion Chief position to perfonn training and administration functions and enhancement ofsen,ices throughfonnation of the Five Cities Fire Authority. Emergency Operations Center Equipment, supplies and staffing assistance necessary to prepare the City's Emergency Operations Center (EOC) for disaster response operations. Fire Aerial Apparatus The City's portion of costs for matching funds for a Federal grant to purchase the new Five Cities Fire Authority ladder tmck. Police Station Upgrade Initial funding for feasibility study, design and costs to upgrade and relocate the City's Police Station. Total costs are anticipated to be approximately $6 million. The remainder of funding is proposed to come from long-term financing and sale of existing property. Construction is projected in Fall 2013. Narcotics Task Force City's costs for participation in a countywide narcotics enforcement unit. Police Firing Range Upg~ades to the Police firing range to address facility needs and reduce future cleanup costs. City Facilities City Hall Complex Upgrade Upgrade and relocation of City Hall to consolidate staff and address ADA, space and structural issues, including development of automated document storage system. A portion of costs are to fund ongoing debt sen, ice on the improvements already completed. Corporation Yard Upgrade Repair and upgrade of Corporation Yard facilities, including replacement of offices, painting, roof improvements, building exterior and parking areas. The remainder of costs are projected to be paid for from the Water and Sewer Funds and sale of land. Miscellaneous Sales Tax Administration and Mailing of Annual Report Costs for sales ta.x consultant services and preparation and mailing of this report. Page 3 Actual Budgeted $11,465 $13,535 $0 $10,000 $0 $19,000 $115,000 $117,300 $1,000 $5,000 $21,163 $21,163 $57,846 $737,153 $24,000 $24,000 $0 $40,000 $70,448 $35,289 $0 $30,000 $4,296 $7,000 Item 8.f. - Page 8 LOCAL SALES TAX ACTUAL AND BUDGETED EXPENDITURES FOR FISCAL YEARS 2011-12 AND 2012-13 (CONTINUED) Summary Totals Total Beginning Fund Balance Projected Revenues Projected Ending Fund Balance Oily qf .tl.rrogo Grande City Manager's Office 300 East Branch Street· Arroyo Grande, CA 93421 POSTAL CUSTOMER FY 2011-12 FY 2012-13 Actual Budgeted $2,291,563 $3,314,894 $2,176,103 $1,851,734 $1,736,274 $1,736,274 $1,879,510 $300,890 Pre-Sort Standard U.S. Postage PAID Arroyo Grande California Permit #37 ECRWSS ARROYO GRANDE, CA 93420 Item 8.f. - Page 9 Attachment 2 LOCAL SALES TAX REVENUE AND EXPENDITURE 5-YEAR PLAN FY 11-12 Item Actual Carryover FY 12-13 Total FY 12-13 FY13-14 FY 14-15 FY 15-16 FY 16-17 Strother Park Sign $0 $10,000 $0 $10,000 $0 $0 $0 $0 Castillo Del Mar $0 $19,000 $0 $19,000 $50,000 $0 $0 $0 Traffic Model Update $11,465 $13,535 $0 $13,535 $0 $0 $0 $0 Brisco/Halcyon Interchange $0 $0 $0 $0 $0 $200,000 $200,000 $200,000 Subtotal Transportation $11,465 $42,535 $0 $42,535 $50,000 $200,000 $200,000 $200,000 Pavement Management $1,069,312 $21,693 $1,000,000 $1,021,693 $525,000 $550,000 $575,000 $600,000 Sidwalks and Cross Gutters $46,557 $50,000 $65,000 $115,000 $65,000 $65,000 $65,000 $65,000 Street Maintenance $53,027 $97,700 $97,700 $100,000 $100,000 $100,000 $100,000 ADA Ramps $20,000 $20,000 $40,000 $20,000 $25,000 $25,000 $25,000 Montego Street Sidewalk Project $3,956 $0 $0 $0 $0 $0 $0 $0 Crown Hill Crosswalks and Ramps $20,000 $0 $20,000 $0 $0 $0 $0 Project Studies and Planning $3,750 $0 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 El Camino Real $428,224 $0 $90,000 $90,000 $0 $0 $0 $0 East Branch Paulding Wall $0 $0 $0 $0 $0 $25,000 $50,000 $0 Short Street $24,554 $0 $0 $0 $0 $0 $0 $0 Alpine Street $0 $50,000 $25,000 $75,000 $0 $0 $0 $0 Tree Inventory and Trimming $12,520 $0 $0 $0 $0 $0 $0 $0 Traffic Way Extension $2,758 $0 $0 $0 $0 $0 $0 $0 Greenwood Tract $5,920 $144,080 $300,000 $444,080 $0 $0 $0 $0 Larchmont Street Improvements $0 $0 $25,000 $25,000 $125,000 $0 $0 Underground Utilities $0 $0 $50,000 $50,000 $100,000 $50,000 $0 $0 Pecan Place $0 $0 $0 $0 $50,000 $0 $0 $0 Swinging Bridge Reinforcement $0 $0 $0 $0 $40,000 $0 $0 $0 Le Point Street Parking Lot $100,267 $0 $100,000 $100,000 $100,000 $100,000 $100,000 $125,000 Subtotal Street Improvements $1,750,845 $305,773 $1,782,700 $2,088,473 $1,135,000 $925,000 $925,000 $925,000 Drainage/Creek Protection Projects $44,233 $5,767 $40,000 $45,767 $45,000 $50,000 $50,000 $50,000 Retention Basin Maintenance $25,700 $0 $26,214 $26,214 $26,738 $27,273 $27,819 $28,375 Newsom Springs $165,567 $0 $0 $0 $0 $0 $0 $0 Colina & Via La Barrance Drainage $0 $15,000 $0 $15,000 $0 $0 $0 $0 Larchmont Drainage $0 $30,000 $0 $30,000 $0 $0 $0 $0 Platino Lane & Oro Drive Inlet $0 $0 $50,000 $50,000 $0 $0 $0 $0 Other Drainage Projects $0 $0 $0 $0 $0 $0 $0 $50,000 Subtotal Drainage Improvements $235,500 $50,767 $116,214 $166,981 $71,738 $77,273 $77,819 $128,375 Fire JPA $115,000 $0 $117,300 $117,300 $119,646 $122,039 $124.480 $126,969 Emergency Operations Center $1,000 $0 $5,000 $5,000 $2,500 $2,500 $2,500 $2,500 Fire Apparatus $21,163 $0 $21,163 $21,163 $21,163 $21,163 $21,163 $0 Police Station Expansion $57,846 $472,153 $265,000 $737,153 $180,000 $180,000 $180,000 $180,000 Narcotics Task Force $24,000 $0 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 Police Firing Range $0 $20,000 $20,000 $40,000 $20,000 $20,000 $0 $0 Subtotal Public Safety $219,009 $492,153 $452,463 $944,616 $367,309 $369,702 $352,143 $333.469 City Hall Upgrade $70,448 $15,289 $20,000 $35,289 $20,000 $20,000 $20,000 $20,000 Corporation Yard Repairs $0 $10,000 $20,000 $30,000 $20,000 $20,000 $20,000 $20,000 Elm Street Community Center Roof $0 $0 $0 $0 $0 $0 $0 $0 Elm St. Community Center Upgrade $0 $0 $0 $0 $0 $50,000 $50,000 $50,000 Subtotal City Facilities $70,448 $25,289 $40,000 $65,289 $40,000 $90,000 $90,000 $90,000 Transfer to Address State Takeaways $0 $0 $0 $0 $250,000 $250,000 $250,000 $250,000 Annual Audit and Report $4,296 $0 $7,000 $7,000 $7,500 $7,500 $7,500 $8,000 Subtotal Other $4,296 $0 $7,000 $7,000 $257,500 $257,500 $257,500 $258,000 Total $2,291,563 $916,517 $2,398,377 $3,314,894 $1,921,547 $1,919.475 $1,902,461 $1,934,844 Projected Revenue $1,851,734 1,851,734 1,879,510 1,907,703 1,936,318 1,965,363 1,994,843 Annual Change to Fund Balance -$439,829 -546,643 ·1,435,384 -13,845 16,843 62,902 59,999 Balance $1,736,274 $300,890 $287,045 $303,889 $366,790 $426,790 Percentage of Projected Revenues 16% 15% 16% 19% 21% Assumes: 1.5% annual sales tax growth FY 11-12 Beginning Fund Balance $2,176,103 Item 8.f. - Page 10