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Agenda Packet 2007-05-29 SP CITY OF Tony Ferrara Ed Arnold Joe Costello Jim Guthrie Chuck Fellows Mayor Mayor Pro Tern Council Member Council Member Council Member Agenda City Council ,'o/~~LIFOR~.~ ,,_~~~'.I Steven Adams City Manager Timothy J. Carmel City Attorney Keliy Wetmore City Clerk NOTICE OF SPECIAL MEETING CITY COUNCIL/REDEVELOPMENT AGENCY AGENDA SUMMARY TUESDAY, MAY 29,2007 6:00 P.M. Arroyo Grande City Council Chambers 215 East Branch Street, Arroyo Grande 1. CALL TO ORDER: 6:00 P.M. 2. ROLL CALL: COUNCIURDA 3. FLAG SALUTE 4. CITIZENS' INPUT, COMMENTS, AND SUGGESTIONS on Special Meeting Agenda Items. Members of the public wishing to address the Council/RDA on any item described in this Notice may do so when recognized by the Presiding Officer. 5. CONSIDERATION OF PRELIMINARY FISCAL YEAR 2007-o8/FISCAL YEAR 2008-09 BI-ANNUAL BUDGET (ADAMS/KRAETSCH) The City Council/Redevelopment Agency Board of Directors will review the Preliminary FY 2007-08 & FY 2008-09 Bi-Annual Budget. The City Council/RDA Board will consider adoption of the FY 2007-08 & FY 2008-09 Bi-Annual Budget at its Regular Meeting of June 12, 2007. 6. ADJOURNMENT to the Regular City Council/Redevelopment Agency Meeting of Tuesday, June 12, 2007 at 7:00 p.m. in the Council Chambers, 215 East Branch Street. MEMORANDUM FROM: CITY COUNCIUREDEVELOPMENT AGENCY BOARD OF DIRECTORS STEVEN ADAMS, CITY MANAGER/EXECUTIVE DIRECTOR Sf;; ANGELA KRAETSCH, DIRECTOR OF FINANCIAL SERVICES It!- PRELIMINARY FY 2007-08/ FY 2008-09 BI-ANNUAL BUDGET TO: SUBJECT: DATE: MAY 29, 2007 RECOMMENDATION: It is recommended the City Council/Redevelopment Agency Board of Directors view the Preliminary FY 2007-08/ FY 2008-09 Bi-Annual Budget, provide opportunity for public comment, and direct staff to make any requested changes prior to formal consideration at the June 12, 2007 meeting. FUNDING: All City funds, as proposed, are balanced. The Citywide total recommended budget for FY 2007-08 is $24,694,260 and $25,271,103 for FY 2008-09. The total proposed General Fund budget (without transfers) is $14,290,218 for FY 2007-08 and $14,723,090 for FY 2008-09. DISCUSSION: Staff is pleased to present the Preliminary Bi-Annual City Budget for FY 2007-08 and FY 2008-09 to the City Council for review and consideration. Budgets for all funds are incorporated into the document. The proposed budget is balanced, will continue to fund the high quality of services provided to the community, and will invest in the future through capital improvements and maintenance activities. The budget recommendations incorporate a balanced and responsible approach to meeting the City's short and long-term needs in a cost effective manner. The Bi-Annual City Budget is an important document because it serves as staff's recommendation, and ultimately Council's direction, for the work program for the upcoming two-year period. It also represents the collective recommendation of the executive team. The Preliminary Bi-Annual Budget was developed by incorporating budget goals and priorities recommended by staff and approved by City Council prior to the beginning of the budget process. These priorities were used as the basis for evaluating requests and developing recommendations. All budget priorities established have been addressed in the budget recommendations. CITY COUNCIL FY 2007-08/ FY 2008-09 PRELIMINARY BI-ANNUAL BUDGET MAY 29,2007 PAGE 2 The most significant change in this year's budget results from the approval of Measure 0-06, which established a half-cent local sales tax. As a result, the Preliminary Bi- Annual Budget is not only balanced, but is the first to include long-range financial projections that fully fund critical forecasted needs. Revenue from the local sales tax measure will now enable the City to dedicate funding to address four categories of important needs identified through the City's long-range financial planning process. The local sales tax measure was designed primarily to invest in a long list of capital needs that have accumulated due to financial challenges faced by the City over the past several years. Staff is committed to utilizing the new sales tax revenues for the purposes that were outlined in the advisory measures also on the November 2006 ballot. The results of these measures were used in prioritizing the proposed expend itu res. As a result, the recommended budget includes a substantial investment in transportation, street, drainage, creek, street tree, and public safety facility and equipment improvements. Highlights include design of the Brisco-Halcyon Interchange project; resurfacing of Brisco Road, Farroll Avenue, E. Grand Avenue, and EI Camino Real; Newsom Springs and Valley Road drainage improvements; an increase in street, sidewalk and street tree maintenance; creek preservation projects; upgrade of Fire Department staffing; fire engine purchase; and expansion of the Police Station. A summary of proposed local sales tax expenditures is provided in Attachment 1. The Budget also includes an update to the City's Long-Range Financial Plan, which represents the City's continued commitment to planning long-term to meet future needs. The purpose of the Long-Range Financial Plan is to serve as a financial planning tool to address funding needs over a 1 O-year period rather than only on an annual or bi-annual basis. This better enables the City Council and staff to view the long-range financial implications of decisions before they are made, to identify future needs and how to address them through long-term strategies, and to better adjust to fluctuations in the economy. The long-range financial plan forecasts that revenues will be sufficient to meet important needs over the next 10-year period, although sluggish sales tax growth, rising personnel costs due to the high cost of housing and medical benefits. and reduced building permit revenue from slowing construction activity are all identified as concerns important to monitor. Attachment 2 includes the proposed Work Program for FY 2007-08 and FY 2008-09. It consists of the major new goals, programs and projects that are funded in the proposed budget. Staff will be responsible for preparing and submitting project schedules for each project and program listed. These schedules will be used to monitor and track progress on an ongoing basis. CITY COUNCIL FY 2007-08/ FY 2008-09 PRELIMINARY BI-ANNUAL BUDGET MAY 29,2007 PAGE 3 Recognizing that this is a draft budget document, staff has identified the following errors and/or adjustments that need to be made: o In the Capital Improvement Program, the E. Grand Avenue Utility Pole Relocation (Applebee's Restaurant) project is listed twice. One will be eliminated, which will result in an additional $75,000 to the Redevelopment Fund Balance. o The amount for Liability Insurance is overstated by $39,000 in FY 07-08 and $41,000 in FY 08-09, which will increase the General Fund fund balance by that amount. o The Sewer revenue did not include a 3% for FY 07-08 and there was a formula error that did not pick up the penalty revenue. It is understated by $25,000 in FY 07-08 and $18,000 in FY 08-09. o The preliminary budget does not include the 3rd quarter budget adjustments in the amended budget line or the estimated expenditures. Therefore, the beginning fund balance number for FY 2007-08 will change for the final budget. o The City received a revised estimate from Zone 3 for the Lopez charge for FY 2008-09, which was overstated in the Preliminary Budget by $29,000. o The Preliminary Budget includes the $25,000 revenue estimated in each of the two years from the proposed PG&E lease of the 5-acre City parcel on W. Branch Street for temporary parking. At City Council direction, staff is meeting with PG&E to develop an alternative proposal. However, if an agreement is not reached, this will reduce overall revenue by $50,000. ALTERNATIVES: The following alternatives are provided for the Council's consideration: - Provide staff direction to present the Preliminary Budget for formal consideration at the June 1ih meeting; - Provide staff direction to make specific changes to the proposed budget for consideration at the June 12th meeting; Provide staff direction. Attachments: 1. 2. Summary of Proposed Local Sales Tax Expenditures Proposed FY 2007-08/ FY 2008-09 Work Program I Proposed Local Sales Tax Expenditures FY 2007-08/ FY 2008-09 Expense FY 2007-08 FY 2008-09 Transportation Brisco - Halcyon Design $100,000 $100,000 Traffic Way Channelization/Cherry Avenue Left Turn Lane $50,000 ~ Subtotal $150,000 $100,000 Infrastructure Pavement Management Program $150,000 $200,000 Brisco Road rehab $100,000 $0 F arroll Road rehab $144,000 $0 E. Grand Avenue resurfacing $40,000 $0 EI Camino Reai Improvements $0 $259,000 Sidewalks $125,000 $125,000 Concrete maintenance $25,000 $25,000 Addition of 2 part-time street maintenance workers $48,000 $50,000 Street tree trimming contract $50,000 $50,000 Creek preservation projects $75,000 $75,000 Castillo Del MarNalley Road Drainage $75,000 $75,000 E. Branch drainage improvements $75,000 $0 Retention basin maintenance $20,000 $20,000 Poplar Street Retention Basin Improvements $10,500 $0 Capital Project Planning Studies $30.000 $30.000 Subtotal $967,500 $909,000 Public Safety Fire Battalion Chief $35,000 $40,000 Police Position Upgrades $11,500 $15,000 Emergency Operations Center $33,600 $3,500 Fire Truck $100,000 $0 Fire Department Radio Equipment $25,000 $0 Police Station Expansion $100.000 $300.000 Subtotal $305,100 $358,500 Public Facilities/ADA Improvements Corporation Yard Improvements $0 $5,000 ADA Sidewalk Retrofits ~ $20.000 Su btotal $0 $25,000 Other Mailing of Annual Report $2,000 $2,000 Reserve $75.000 $75.000 Subtotal $77 ,000 $77,000 Total $1,499,600 $1 ,469,500 " ,I :1 CITY OF ARROYO GRANDE WORK PROGRAM FY 2007-08/ FY 2008-09 Administrative o Update City personnel regulations o Complete update of Administrative Policy Manual o Develop plan for reduction oflong-term retiree medical costs o Establish comprehensive Records Management Program and Records Retention Schedule o Prepare Comprehensive Annual Financial Report o Establish vehicle replacement fund tracking system o Implement recommendations of the Development Review and Application Process Study Redevelopment o Prepare development agreement for Le Point Street property o Negotiate DDA for Faeh Street Hotel project o Develop agreement for redevelopment of southwest comer of E. Grand Avenue and Elm Street o Develop agreement for affordable housing project Automation o Complete implementation of geographic information system (GIS) o Prepare and add atlas information to web site , ~ City of Arroyo Grande FY 2007-08/ FY 2008-09 Work Program Page 2 o Implement land use/permit tracking software o Purchase and install Microsoft Office upgrade o Prepare automated citizen request tracking system Land Use o Complete Creek Study o Complete Conservation Element Update o Prepare landscape guidelines ordinance o Prepare affordable housing ordinance o Complete local historical resource designation process o Complete Development Code update for signs and parking Public Safety o Complete joint dispatch feasibility study o Coordinate design of Police Station expansion o Integrate Neighborhood Officer and Neighborhood Watch programs o Prepare graffiti ordinance o Upgrade Emergency Operations Center o Expand disaster preparedness program o Prepare proposal for Fire Sprinkler Ordinance City of Arroyo Grande FY 2007-08/ FY 2008-09 Work Program Page 3 Parks o Complete ADA improvements at Elm Street and Strother Parks o Complete proposal for Dog Park improvements at Elm Street Park o Construct improvements at Health Fitness Park o Construct Village Green improvements o Resurface Elm Street tennis courts o Install lighting at Don Roberts Field o Establish plan and begin implementation of three-year turf and facility improvements to Soto Sports Complex fields o Replace lights at Ikeda and Volunteer fields o Install citywide centralized irrigation control system Infrastructure o Replace fencing adjacent to Oak Park Leisure Gardens o Establish contract for citywide street tree trimming program o Complete Drainage Master Plan update o Update Water Master Plan o Prepare Sewer and Water rate study o Complete Desalination Study o Design and construct E. Branch streetscape project o Design and construct Traffic Way streetscape improvements City of Arroyo Grande FY 2007-08/ FY 2008-09 Work Program Page 4 I:] Complete Brisco Road/Halycon Road - Highway 101 P A&ED and begin design I:] Construct Brisco Road pavement rehabilitation I:] Construct Farroll Avenue pavement rehabilitation I:] Construct E. Grand Avenue microsurfacing and restriping I:] C~nstruct pavement management program projects I:] Coordinate Route 227 relinquishment process I:] Construct Fair Oaks sewer line upgrade I:] Construct Reservoir No.6 upgrade I:] Complete Well No. 10, Phase II project I:] Construct Well NO.7 rehabilitation I:] Construct water pressure zone connection, Ranch Grande to Oro Zone I:] Construct Castillo Del Mar extension and drainage improvements , I:] Implement grease control program I:] Construct sidewalk improvements at Montego Street and Crown Hill I:] Construct Poplar Street drainage basin improvements I:] Complete E. Branch sewer lining project