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05-13-2008 CC Rpt A07 COUNCIL AGENDA STAFF REPORT CITY CLERK USE ONLY Meeting Date: May 13,2008 11Yr."Z Public Hearing: * Discussion Item: 0 y "t^ - 2 Consent Item: re' CITY Of OltMMILLS .... (i MAY 6, 2008 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY MANAGER SUBJECT: THIRD QUARTER BUDGET PROGRAM REVIEW RECOMMENDATION: 1. Receive, review, and file the quarterly budget review. 2. Approve the recommended changes in the Capital Improvement Program. 3. Approve the estimated revenue and appropriation budget amendments described in the Background/Analysis and Fiscal Impact sections of this report. OACKGROU ND/ANALYSIS: As part of the annual budget process, a quarterly review is performed to provide a status of the current financials. This is the third-quarter budget review for the fiscal year 2007-08. FINANCIAL REVIEW: Revenues: General Fund Property Taxes: The City received a total of $2,394,879, or 59% of the estimated revenue budget of $4,044,800 as of the end of the third quarter in fiscal year 2007-08. The City is expected to receive five more payments from San Bernardino County in the next quarter through year end. These payments include the second installment of property taxes that are due in April 2008, and the total amount is anticipated to be at least 35% of the overall budget. Sales Tax: As of March 31, 2008, a total of $2,443,694 was received, or 58% of the estimated revenue budget of $4,195,400. It is anticipated the City will receive five more payments in the fourth quarter of the fiscal year, including the year end adjustment. Due to the recent downturn in the economy, it is uncertain how this downturn is going to impact the overall sales tax collections. An update on the sales tax information will be reported in the fourth quarter budget eview. /9 7 AGENDA DATE: MAY 13, 2008 (OBJECT: THIRD QUARTER BUDGET PROGRAM REVIEW GE TWO Triple Flip: The City has received $735,928, or 53% of the estimated budget of $1,398,500 in the third quarter for the Triple Flip revenue. It is anticipated the second installment of $680,406 will be received in May 2008. The estimated revenue budget for the Triple Flip has been adjusted in the revenue section due to updated information provided by the County. Vehicle License-In-Lieu Fee (VLF Swap): The City has received $2,970,968, or 50% of the estimated budget of $5,869,000 as of the end of the third quarter in fiscal year 2007-08. It is anticipated the second installment of $2,970,968 will be received in May 2008. Based on updated information provided by the County, the estimated revenue budget for the Vehicle License-In-Lieu Fee has been adjusted in the revenue section below. BUDGET AMENDMENTS: Revenues: General Fund etn increase in the estimated revenue in the amounts of $17,800 and $72,900 are ecommended to account for the additional anticipated revenues for the Triple Flip and the Vehicle License In-Lieu Fee (VLF), respectively, based on the information provided by the County Auditor-Controller's Office. An increase in the estimated revenue is recommended for the TDA pass-through revenue account in the amount of $57,300. This increase is due to anticipated reimbursements from the developers for legal services provided for trust deposits related issues. Measure I Fund A decrease in estimated revenue is recommended from $1,553,900 to $1,176,400, or $377,500, for Measure I Sales Tax. This decrease is due to the estimated revenue being over estimated at the time the FY 07-08 budget was prepared. Water Utility Fund An increase in the estimated revenue in the Water Utility Fund is recommended in the amount of $848,500. This is due to the water sold to the Jurupa Water District from June 1 to November 1, 2007. 4111, AGENDA DATE: MAY 13, 2008 SUBJECT: THIRD QUARTER BUDGET PROGRAM REVIEW GE THREE Expenditures: General Fund Community Development An increase in budget appropriations in the amount of $57,300 is recommended in the General Fund to provide funding for legal services rendered for developer trust deposits related issues. Facilities Maintenance Division Increases in budget appropriations in the amounts of $25,800 and $20,800, respectively, is recommended to provide additional funding for under estimated repair and maintenance needs at the City's facilities, and for electricity usage at the City Hall and the Sheriffs Station that was not previously budgeted for. • Landscape and Lighting Districts Funds Park Maintenance Fund •n increase in budget appropriations in the amount of $11,200 is recommended to provide funding for under estimated electricity usage at the New Community Park for the lighted maintenance building, office, and the restroom. Increases in budget appropriations in the amount of $25,300 and $27,800 are recommended for the water accounts for the Los Ranchos and the Rincon areas, respectively. This is primarily due to increased water usage for re-growing frost damaged plants in the areas. Water Utility Fund An increase in budget appropriations in the total amount of $1,848,500 is recommended in the water purchase account for the purchase of water from Chino Desalter Authority, the Water Facilities Authority, and the Monte Vista Water District. The purchase cost of water sold to the Jurupa Water District was $848,500, and the water sold to the Jurupa Water District was the desalter water the City was obligated to purchase under agreement with the Chino Desalter Authority. This released the City's obligation to purchase the more expensive desalter water from the Authority for its own use. It is recommended to increase the budget appropriation in an amount of$848,500 to allow the City to purchase water from other water agencies at a lower cost. There is no fiscal impact to the Water utility fund as it is offset by the revenue collected from the Jurupa Water District. On addition, ground water production has been reduced due to contaminants that created the need to purchase water from the Water Facilities Authority and the Monte Vista Water District. It is estimated an additional $1,000,000 would be needed for the water purchase. AGENDA DATE: MAY 13, 2008 oliBJECT: THIRD-QUARTER BUDGET PROGRAM REVIEW GE FOUR Community Facilities District (CFD) No. 9 An increase in budget appropriation in the amount of $2,944,000 is recommended for the Settlement and Judgment involving CFD No. 9 and related transfers. This is the total amount remitted to the developer to date. CAPITAL IMPROVEMENT PROGRAM: The City currently has 116 projects designated in the Capital Improvement Program. As of March 31, 2008, there are 21 projects completed and 59 projects either in the design process or under construction. The completed projects are listed as follows: Azurite Drive Water Main Extension Fairfield Plaza Multi - Purpose Trail Fairfield Ranch Road Fairfield Ranch Road Parkway (PM 15505) Fieldstone Communities (Ridgegate) - 0/S/ Rehab Fieldstone Communities (Ridgegate) - Pump station Landscape Fieldstone Communities (Ridgegate) - Soquel Canyon Median/Parkway 0 Fieldstone Communities (Ridgegate) - Trail System Government Center Property Acquisition - Salvadore Vasquez Greater Prado Basin Clean Up and Restoration KB Homes — Lexington Multi Purpose Trail Landscape Frost Mitigation Project McCoy Equestrian Center Exhibition/Reception Facility Opticom Emergency Vehicle Preemption System Overlay/Slurry Seal FY 2006-07 Parkway at Fairfield Ranch Road (PM 15504) Security Upgrades for the City Yard Street Tree Improvement Project Trail Construction Vellano — Neighborhood Park Vellano — Overlook Park Capital Project Budget Modifications: Following are recommendations to eliminate, re-allocate, or modify funding sources for specific capital projects for management purposes or as described: Overlay/Slurry Seal Program — FY 2007/08 (Modify) Appropriation: Increase by $325,000 410 Funding source: Traffic Congestion Relief Fund $325,000 (decrease) Measure I Fund $325,000 (increase) Reason: City will not receive funding for the Traffic Congestion Relief Fund in FY 2007-08. It is necessary to replace the funding source from the Traffic Congestion Relief Fund to the Measure I Fund. AGENDA DATE: MAY 13, 2008 iBJECT: THIRD-QUARTER BUDGET PROGRAM REVIEW GE FIVE Eucalyptus Avenue Sewer Line Replacement Project (Deleted) Appropriation: Decrease by $449,500 Funding source: Sewer Utility Fund Reason: This project is no longer required as the scope of work is covered by the Relocation Clay Pipe-Eucalyptus project. As a result, the unused budget appropriations will be released to the original funding source. Widening of CFD No.9 Channel Access Road (Transfer) Appropriation: Increase by $25,000 Funding source: General Fund (increase by $25,000) Sewer Utility Fund (decrease by $25,000) Reason: To appropriate General Fund Reserves since the project does not qualify for Sewer Utility Funding. • Los Serranos Infrastructure Improvement Project — Phase 1B • Los Serranos Infrastructure Improvement Project- Phase II • Los Serranos Infrastructure Improvement Project- Safe Routes to School (SRTS1 1110 Due to Federal regulations, the CDBG funding originally appropriated for the Los Serranos Infrastructure Improvement-Phase 1B project is required to be expended by April 30, 2008. As this project is not anticipated to begin construction soon, it is necessary to re-allocate the program funding to the Los Serranos Infrastructure Improvement Project-Phase II and the Los Serranos Infrastructure Improvement Project-SRTS, which are currently under the design phase or EIR, respectively. Both projects are qualified for use of the CDBG funds under the Los Serranos Infrastructure Improvement Program. Los Serranos Infrastructure Improvement - Phase 1B (Modify) Appropriation: Decrease by $138,000 Funding source: CDBG Fund Los Serranos Infrastructure Improvement Project- Phase II (Transfer) Appropriation: Transfer of $100,000 Funding source: General Fund (decrease by $100,000) CDBG Fund (increase by $100,000) Los Serranos Infrastructure Safe Routes to School Grant Project (Modify) Project Description: (Name Change to) Los Serranos Infrastructure Improvement Project-SRTS • Appropriation: Increase by $38,000 Funding source: CDBG Fund AGENDA DATE: MAY 13, 2008 iiirJECT: THIRD-QUARTER BUDGET PROGRAM REVIEW GE SIX REVIEW BY OTHERS: This agenda item has been reviewed by the Community Development Director, the Interim City Engineer and the Public Facilities and Operations Director. FISCAL IMPACT: The recommended modifications to the budget will increase the General Fund balance by a total of $119,100. The following table indicates the financial impact to the fund reserves as a result of the recommended modifications: Net Increase/(Decreasel General Fund $119,100 Measure I Fund ($702,500) Landscape and Lighting District Fund ($64,300) 111) Miscellaneous Grant Fund $325,000 Water Utility Fund ($1,040,000) Sewer Utility Fund $474,500 Community Facilities District Funds ($2,944,000) TOTAL ($3,832,200) Respectfully submitted, Recommended by: 72 I // Dougla . La Belle, City Manager,e Juf A. L.; caster, Finance Director DLB:JRL:ps:dk 41111