|
Back to Calendar
Return
|
| |
Agenda Item 22.
|
| City Council Meeting |
|
|
|
| Subject: |
| Budget Adjustments to the City Operating and Capital Improvement Program Budgets for Fiscal Year 2018-19 |
| RECOMMENDATION |
| Adopt the attached resolutions appropriating funds to adjust the Fiscal Year 2018-19 City Operating and Capital Improvement Program Budgets. |
| BACKGROUND/DISCUSSION |
Budget adjustments are presented to the City Council periodically for review. These adjustments represent the appropriation of items previously approved by the City Council during the fiscal year, or staff recommended adjustments for City Council consideration. The recommended adjustments to the City Operating Budget are listed in City - Exhibit A. These adjustments are separated by funding source and the accounts are identified as either revenue or expenditure accounts.
In October 2018, the City received a one-time payment of $270,341 from the County of Orange for prior years property taxes collected from the former Brea Redevelopment Agency (Successor Agency). Of this amount, $70,072 was deposited in the Paramedic Tax Fund. The remaining $200,269 was was deposited into the General Fund.
The Fire Department continues to respond to mutual aid throughout California. Fortunately, Fire Administration has been diligent in seeking reimbursement from costs incurred. Mutual aid responses included: the Lion Fire in the Sierra National Forest, the Carr Fire in the Shasta Trinity Forest, the Ferguson Fire in the Sierra National Forest, the Stone Fire in the Modoc National Forest, and the Mendocino Fire. These strike team responses resulted in the Fire Department's overtime budget and other operating costs to increase by $256,817. This cost is fully offset by reimbursements.
In addition, on July 17, 2018, the City Council approved the purchase of a used 1998 American LaFrance 105" Aerial Ladder Truck. This truck was purchased from the City of Vernon. The Fire Department also requested an additional $10,000 for repairs needed for the used fire truck. The total transfer from the General Fund (110) to the Equipment and Vehicle Maintenance Fund (480) is $60,000.
The City of Brea purchases water from CDWC and is entitled to purchase 1.6 acre feet of water for each share of common stock owned by the City (entitlement water) at a certain rate (entitlement rate). The City also purchases water from CDWC in excess of its entitlement at a higher rate (over-entitlement rate).
Recently, the City was notified that water service to certain CDWC retail customers in the La Habra area is now being provided by CDWC through pipelines owned and maintained by the City of La Habra. These customers now have the option to transfer their water service from CDWC to the City of La Habra. If they choose to transfer their water service to the City of La Habra, these customers will no longer be required to retain their common stock shares in CDWC. Therefore, there are CDWC common stock shares available for purchase by the City of Brea or other CDWC wholesale water customers.
By purchasing additional CDWC common stock shares, the City would be able to purchase more water at the entitlement rate and lower its annual water supply costs. Therefore, on December 18, 2018, the City Council authorized the City Manager to offer $15,250 per common stock share to these shareholders and purchase up to 100 shares. Funding for these purchases is available from the Water Enterprise Fund capital reserves, while still maintaining the capital reserve target balance of approximately $6 million. Based on current CDWC rates, the savings from each share of common stock purchase is approximately $884 annually which is a return on investment of 5.8% with a payback period of 17.2 years. A budget adjustment of $250,000 (about 16 shares) is proposed based on purchases made or interest expressed to date.
For Capital Improvement Project #7251 - Lambert Road/57 Freeway, Caltrans, who is the lead agency on this project, will now oversee the state and federal grant funding totaling $74,705,000. Since funding will be distributed to Caltrans, expenditures for this project need to be reduced accordingly. In the same way, for Capital Improvement Project #7305 - Brea Boulevard Widening, the County of Orange is the lead agency on this project. The County will now oversee the revenue and expenditures of $172,500. |
| COMMISSION/COMMITTEE RECOMMENDATION |
| The attached FY 2018-19 budget adjustments were reviewed by the Finance Committee on January 29, 2019 and recommended for City Council approval. |
| FISCAL IMPACT/SUMMARY |
| The City Operating Budget adjustments for the General Fund (110) in Exhibit A resulted in an increase in revenues of $459,263 and an increase in expenditures and transfers out of $318,994, for a net General Fund increase in revenues of $140,269. The City Operating Budget adjustments for all funds resulted in an increase in revenues and transfers-in of $589,335 and an increase in expenditures and transfers-out of $643,994 for a net increase in expenditures and transfers-out of $54,659.
The Capital Improvement Program Budget adjustments in CIP - Exhibit A consists of a decrease in expenditures of $74,877,500 with a corresponding net decrease in revenues. The adjustments to revenue and transfers-in are as follows:
| County Grants |
($172,500) |
| State Grants |
($9,000,000) |
| Federal Grants |
($65,705,000) |
| TOTAL |
($74,877,500) |
|
| RESPECTFULLY SUBMITTED: |
William Gallardo, City Manager
Prepared by: Faith Madrazo, Revenue and Budget Manager
Concurrence: Cindy Russell, Administrative Services Director
|
|
|
|