Title
Adoption of Resolution Amending the Fiscal Year (FY) 2023-24 Budget; and
Adoption of Resolution Approving Workforce Changes for FY 2023-24. (Finance 10024056) [City Council and SACIC]
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
This report provides a review and an update to the Fiscal Year (FY) 2023-24 budget and revenue and expenditure projections through June 30, 2024. Budget adjustments are proposed for the General Fund, special revenue funds, capital projects fund, debt service fund, internal service funds, enterprise fund, and trust/fiduciary funds. The proposed adjustments would increase the General Fund revenue projection by $2.5 million, from $128.8 million to $131.4 million, increase the General Fund operating expense budget by $1.7 million and increase capital transfers out of the General Fund by approximately $270,000. Overall, the General Fund revenue adjustments exceed expense adjustments by approximately $540,000.
For non-General Fund programs, staff project an increase in revenues of $3,891,026 excluding transfers in, and propose an additional $7,330,667 in expense appropriations, excluding transfers out. Further, staff recommends the addition of two new positions, upgrade of one position, and a departmental transfer of one position.
BACKGROUND
City Council approved Resolution No. 16060, adopting the Biennial Budget for FYs 2023-25 on June 20, 2023. This report updates the FY 2023-24 financial projections for the General Fund and proposes current year budget adjustments for various City of Alameda (City) funds to reflect and respond to the City’s current financial condition, address urgent and unforeseen needs, and incorporate technical corrections.
The list of budget adjustments to the General Fund and other funds is attached as Exhibit 1 and the updated General Fund Budget Summary is attached as Exhibit 2.
DISCUSSION
I. General Fund Revenues
General Fund revenues in FY 2023-24 are projected to increase by $2,938,000 in ongoing funds and decrease by $400,000 in one-time funds to $131.4 million in total. Staff recommend the following changes to General Fund revenue forecast:
A1. Non-Department General Fund Revenue Update
Business License Tax - Increase $200,000
Business License Tax collections occur at the start of the fiscal year, and year-to-date actuals are $200,000 above budget.
Property Tax - Increase $1,815,000
Based on updated projections from the City’s property tax consultant, HdL, secured property tax is expected to come in higher due to growth in assessed values.
Property Transfer Tax - Decrease $2,200,000
Due to the impact of high interest rates on real estate activity, transfer tax receipts are trending below the projection.
Sales Tax and Transaction & Use Tax - Decrease $400,000
Based on updated projections from the City’s sales and use tax consultant, HdL, that identified decreases in the business and industry, fuel and service station, and building and construction industries.
Solid Waste Franchise - Increase $197,000
Technical correction to match actual billing according to the solid waste franchise agreement.
Successor Recognized Obligation Payment Schedule (ROPS) Residual Taxes - Increase $434,000
Based on the prior year actual, current year revenue is projected higher than previously expected.
Transfer In - AMP Reimbursable - Increase $39,000
Technical correction to match the Alameda Municipal Power (AMP) budget.
Utility Users Tax - Increase $370,000
This increase is due to AMP’s seven (7) percent rate increase and higher electricity consumption and natural gas prices remaining high.
A2. Transfer-In $1.8 Million State Earmark for CARE Team
The State of California budget included an earmark of $1.8 million for the Community Assessment Response & Engagement (CARE) Team. The one-time funding will be used to offset the General Fund expenses for Fire Department personnel, services, and supplies.
A3. Increase Recreation Fee Projection by $283,000
As participation in recreation programs continues to return to pre-pandemic levels, fee revenues are trending to exceed previous projections.
II. General Fund Operating Expenses
Overall aggregate budgeted operating expenses are tracking below 50% of the annual budget through the first six months of the year. However, some adjustments are requested to address increased programmatic needs identified during the FY.
The following General Fund expense budget adjustments total an increase in requested appropriations of $1,994,638, of which $1,724,384 are for operational needs and $270,254 are for capital needs.
B1. City Attorney - Increase Transfer-Out to Golf Fund for Legal Expenses - $250,000
As noted in the FY 2022-23 Fourth Quarter Revenue & Expenditure report provided to the City on December 19, 2023, the Golf Fund (Fund 250) finished FY 2022-23 over committed by $145,787. At the end of FY 2023-24, the Golf Fund is projected to have a negative fund balance of approximately $250,000 at fiscal year-end due to litigation costs discussed further below under item C13. Staff propose transferring funds from the General Fund to ensure the fund remains in positive territory.
B2, C50. City Attorney - Convert Part Time to Full Time Deputy City Attorney II - Prosecution Unit - No budget adjustment needed for current fiscal year.
This proposal requests conversion of a part-time position to full time. The Prosecution Unit is required to staff multiple courtrooms daily and process approximately 700+ criminal cases annually; such obligations require a constant and minimum level of staffing. The Unit currently operates at full capacity which includes the utilization of two part-time prosecutors working substantially full time. Additionally, the Unit has recently experienced significant staff turn-over in part due to burn-out. Continuing to rely on part-time staff to perform full-time work further risks burn-out, turnover and exacerbates staffing concerns. Conversion of a part-time position to a full-time position is needed to distribute cases more appropriately among prosecutors and create more equity. In addition, 25% of this position may provide litigation/general legal support to the Rent Stabilization (Fund 207), General Liability (Fund 611), Workers’ Compensation (Fund 610), and City Attorney Administration (Fund 100) functions. The annual cost to the Rent Stabilization (Fund 207), General Liability (Fund 611), Workers’ Compensation (Fund 610) will be approximately $12,000 each. No budget adjustment is needed in the current fiscal year as the costs will be covered by salary savings. In FY 2024-25, a portion of the position costs will be offset by continued salary savings and by the part-time pay budget currently used for part-time attorneys in the Prosecution Unit.
B3. City Clerk - Overtime Technical Correction - $13,500
Overtime was inadvertently left out of the City Clerk Administration budget.
B4. City Council - Special Pay and Benefits Technical Correction - $90,000
Special pay and benefits that went into effect in July 2023 were inadvertently left out of the budget.
B5. Finance - Aquatic Center Debt Service Technical Correction - $(36,600)
The lease revenue bonds for the Aquatic Center were priced on December 14, 2023. Due to the cautious timing of the sale of the bonds that resulted in favorable market conditions, the actual principal and interest payments, which are covered by the General Fund, will be lower than projected in the adopted budget.
B6. Finance - Transfer Payroll Position from Fire to Finance - Net $0
Staff is requesting to transfer a position from the Fire Department to the Finance Department budget to provide improvements in payroll administration. Improvements include but are not limited to improved compliance with all payroll functions and improved customer service, while building knowledge capacity within the payroll division. The Finance Department is requesting to transfer the incumbent and the General Fund budget appropriation. There is no additional expense.
B7. Finance - Upgrade Administrative Technician III to Senior Management Analyst - $33,000
The requested upgrade was recommended as a result of a class study of the incumbent. The Administrative Technician III classification is not descriptive for the level of work being performed and the incumbent is receiving acting pay to a higher classification, which covers required duties of the position. The Finance Department is asking to elevate the incumbent from an Administrative Technician III currently at Step 5 to a Senior Management Analyst at Step 1, resulting in additional cost to the General Fund of approximately $33,000 annually, or $11,000 for the remainder of the fiscal year.
B8. Fire - Transfer Budget to Public Provider Ground Emergency Medical Transport (PPGEMT) Fund - $(85,276)
Effective January 2023, the Department of Health Care Services (DHCS) implemented a new reimbursement methodology for the previous GEMT program. The new Public Provider Ground Emergency Medical Transport (PPGEMT) program increases the fee-for-service reimbursements for eligible emergency medical transports but requires quarterly payments to DHCS. The fee-for-service reimbursements vary month-to-month, so staff recommends budgeting expenses to program the prior year actual revenue to cover eligible costs of emergency medical transports. The amount received in the PPGEMT Fund in FY 2022-23, net of the payments to DHCS, totaled $85,276. This adjustment transfers the expense budget from the General Fund to the PPGEMT fund (see C11 below).
B9. Human Resources - Professional Services for Labor Negotiations - $50,000
Human Resources contracted for professional labor negotiation services to engage the International Association of Firefighters (IAFF) in contract negotiations on behalf of the City. Contract negotiations began in August 2023 and concluded in December 2023.
B11. Police - Concealed Carry Weapons Project - $30,000
Additional budget is needed to cover the cost of background investigations to comply with laws regarding people's right to apply for concealed weapons permit. For example, California Penal Code 26155 requires that when a person applies for a license to carry a pistol, revolver, or other firearm capable of being concealed upon the person, the chief or other head of a municipal police department may issue a license to that person upon meeting all requirements. A background investigation is necessary to ensure the person meets all the requirements.
B12. Police - In-Car Dash Cameras Technical Correction - $66,240
The agreement for adding in-car dash cameras to police vehicles was approved by City Council in May 2023 (see File 2023-3016), but the budget allocation for the first year of the agreement was inadvertently left out of the budget.
B 10 &13. City Wide Salary Savings - $600,000
As a result of the highly successful Alameda Police Department (APD) hiring incentive program, APD has hired more new officers this year than anticipated. In fact, APD is projecting to be fully staffed in patrol by early next fiscal year and have filled all police officer vacancies by early 2025. Consequently, the amount of budgeted salary savings from APD will be lower than previously budgeted, and the overtime costs associated with more field training will be higher, which is expected to result in an increase of $900,000 to the APD budget. This additional cost will be offset by a $300,000 increase in salary savings from the remaining General Fund funded departments, resulting in a net increase to the General Fund budget of $600,000. The costs associated with increased training hours is not expected to continue beyond next fiscal year once all police officer vacancies have been filled.
B14. Public Works - Facility Maintenance Cost Allocation Technical Correction - $286,520
The budget for Facility Maintenance is under-recovering charges from receiver programs because the Facility Maintenance cost allocation plan did not capture the cost allocation charges to Facility Maintenance. The General Fund share of the under-recovery is $286,520.
B15. Public Works - Part-Time Pay and Overtime - $10,000
A part-time position is needed to address coverage when full-time staff take vacation and/or there are other gaps in coverage. The position will be split between the Sewer, Streetlights, and Traffic Signals. In addition, Streetlight staff regularly need to go out at night to identify operational issues and follow up to requests. This request also adds to the overtime budget. The General Fund share of the request is $10,000.
B16. Recreation & Parks - Part-Time Pay and Overtime - $162,000
Additional part-time pay and overtime budget is needed for the Classes, Park Maintenance, Summer Youth, and Youth Sports programs due to the restoration of recreation programs and services to pre-pandemic levels. The costs are partially offset by additional recreation fee revenue.
B17. Recreation & Parks - Professional Services and Supplies Technical Correction - $157,000
Additional professional services and supplies budget is needed for the Classes, Mastick Classes, and Park Maintenance programs due to the restoration of recreation programs and services to pre-pandemic levels. The costs are partially offset by additional recreation fee revenue.
B18. Recreation & Parks - Part-Time Pay and Other Services for Extended Pool Operations - $120,000
The Emma Hood and Encinal Pools will remain open five months longer than previously anticipated. Additional budget is needed to cover the maintenance costs shared with the school district as well as Aquatics program part-time staffing. The costs are partially offset by additional recreation fee revenue.
B19-B24. Public Works and Recreation & Parks - Capital Transfers - $270,254
Staff propose transferring $270,254 from the General Fund to the Capital Projects Fund for three Public Works projects and three Parks projects, discussed further below under items C32 through C34 and C48.
III. Pension/OPEB Funding Policy
Through the City’s Pension/OPEB Funding Policy, the City commits additional funds as available at the end of each year to pay down pension/OPEB obligations in advance. Specifically, if a General Fund surplus exists from the prior year (FY 2022-23), then 50% of the General Fund surplus is to be used in the following manner: 75% shall be used to reduce CalPERS unfunded liability and 25% shall be contributed into the City’s Public Agency Retirement Services (PARS) Section 115 Irrevocable Trust.
Due to programming approximately $30 million of General Fund Residual Fund Balance in the FYs 2023-25 Biennial Budget, there was no surplus at the end of FY 2022-23 when applying the funding formula adopted by City Council Resolution No. 15998. Therefore, staff is not recommending a discretionary Pension/OPEB contribution in FY 2023-24. However, City Council at its discretion could direct staff to return at a later date with options for making a discretionary contribution utilizing available General Fund Residual Fund Balance.
IV. Non-General Fund Programs
In addition to the General Fund amendments discussed above, the following adjustments are proposed for programs outside of the General Fund. These adjustments are included in the list of budget adjustments presented on Exhibit 1.
C1, C51. Fund 101 Police/Fire Pension 1079 - Closed Pension Plan Transfer -$1,440,000
This fund accounts for the payment of pension benefits enacted under closed pension plan #1079. Contributions transferred from the General Fund provide current year pay-as-you-go benefits for retirees and qualified beneficiaries covered by this fund. As beneficiaries of the closed plan die, the fund accumulates excess resources that are periodically transferred by policy to the City’s Pension Reserve (Fund 720), which may be used for future payment of pension obligations. Staff propose transferring $1,440,000 in excess funds from Fund 101 to Fund 720.
C2, C42. Fund 211 Gas Tax and Fund 501 Sewer Services - Part-Time Pay - $15,000
Public Works requests a part-time position to address coverage when full-time staff take vacation and/or there are other gaps in coverage. The annual cost to the Gas Tax and Sewer Services funds is $7,500 each.
C3, C38. Fund 310 Capital Projects - Shoreline Maintenance - Repairs for Encinal Outfall - $60,000
Staff propose appropriating $60,000 from the fund balance of the Tidelands Fund (Fund 216) to implement the permitted design to remove debris and install a gabion wall (a cage, cylinder or box filled with rocks, concrete, or sometimes sand and soil) to address shoreline erosion and protect the outfall pipe.
C4. Fund 219 Asset Seizure - Program Funds Received in FY 2022-23 - $41,310
In FY 2022-23, the City received $41,310 in asset seizure funds. The Police Department requests to program an expense budget to use the funds for eligible activities.
C5. Fund 220 Fire Grants - CARE Team State Earmark - $1,800,000
The State budget included an earmark of $1.8 million for the Community Assessment Response & Engagement (CARE) Team. The one-time funding will be received in the Fire Grants fund and transferred out to the General Fund to offset General Fund expenses for CARE Team personnel, services, and supplies.
C6-C9. Fund 221 Police Grants - JAG Grant, COPS Grants, Abandoned Vehicles - $773,529
The 2022 Byrne Justice Assistance Grant (JAG), prior and current year allocations for the Citizens’ Option for Public Safety (COPS) Program, and current year reimbursements for abandoned vehicle abatement were inadvertently left out of the budget. The Byrne JAG funding in the amount of $12,400 may be used for local initiatives, technical assistance, training, personnel, equipment, supplies, contractual support, and information systems for criminal justice. The COPS funding totaling $681,129 may be used to fund front-line law enforcement services but may not be used to supplant existing funding. Abandoned vehicles abatement reimbursements average approximately $80,000 annually.
C10, C36. Fund 310 Capital Projects - Commercial/Slow Streets - Park and Webster Street Striping - $200,000
The Commercial Streets Program was established as part of the City’s multi-pronged response to the COVID-19 pandemic’s dramatic and immediate negative impacts on the local business community. In July 2023, City Council provided direction on the Park Street and Webster Striping Plans (see File 2023-3170). Staff request allocating an available $200,000 in American Rescue Plan Act of 2021 (ARPA) funds for the commercial corridor improvements to preserve Measure BB transportation funds for other priority projects.
C11. Fund 224 PPGEMT - Establish Expense Budget - $85,276
As discussed above under item B8, $85,276 was received in the PPGEMT Fund in FY 2022-23, net of payments to DHCS. Staff recommend programming the net revenues received last year to offset General Fund expenses for emergency medical transports.
C12. Funds 231 BB Local Streets/Roads and 233 BB Bike/Pedestrian - Add Senior Management Analyst/Re-allocate Senior Transportation Coordinator - $188,000
The proposed Senior Management Analyst position will continue to manage sea level rise adaptation projects, including ones with grant obligations that formerly had insufficient staffing to deliver, while also managing ongoing traffic safety and mobility projects (20% FTE) as well as supporting the Smart Cities Master Plan (10% FTE). The incumbent Senior Transportation Coordinator began doing this combination of work, with associated funding, at the beginning of this fiscal year, leaving the Transportation Planning Unit understaffed by 70% of one full-time position (reducing the core team from 3 FTE to 2.3 FTE). This new position needs to be created so the Senior Transportation Coordinator position may be filled with someone who will perform work matching the person’s job description. The new Senior Management Analyst position will still include 30% transportation work to help deliver important corridor projects (bringing the core team to 3.3 FTE). The annual cost of the new position is approximately $188,000.
C13. Fund 250 Golf - Legal Expenses - $650,000
The FY 2023-24 budget included $300,000 for Golf Legal Services. As of December 12, $278,312 had been spent with an additional $650,000 in legal expenses anticipated to be spent by fiscal year-end, so staff is requesting an additional budget of $650,000. As discussed above under item B1, a $250,000 General Fund transfer will be needed to cover negative cash in the Golf Fund at fiscal year-end due to the increase in legal expenses.
C14. Fund 260 Solid Waste - Doolittle Landfill Long-term Flood Protection Plan - $81,500
The Regional Water Board issued a Waste Discharge Requirement to all closed bay side landfills to develop a Long-term Flood Protection Plan for both sea and groundwater rise. The Doolittle Landfill is subject to this requirement and the report was due November 9, per an extension granted to the City. This request allocates $65,000 to develop the plan, which includes the initial plan submittal to the Water Board and funding to develop an implementation plan.
In addition, the vegetation at the site needs to be removed twice per year at $16,500 per year. This is in addition to the existing maintenance contract.
C15, C35. Fund 310 Capital Projects - Pavement Rehabilitation Update - $643,000
City Council programmed $318,000 in Infrastructure Mitigation Fees (in Fund 261) for the Pavement Management Project (C11000) in FY 2023-24. The total amount collected by the City in FY 2022-23 was $961,585. The request is to appropriate the remaining amount of $643,000 for this fiscal year.
C16. Fund 264 Stormwater - Full Trash Capture Device Maintenance - $20,000
Unanticipated private development installation of public Full Trash Capture (FTC) devices has caused an increase in maintenance costs under the existing City contractor maintenance program. Additional budget of $20,000 is needed to cover the additional maintenance costs.
C17, C37. Fund 310 Capital Projects - Golf Course Drainage Improvement Work - $348,000
Staff propose appropriating $348,000 from the Stormwater Fund (Fund 264) for work to improve drainage at the Corica Golf Course including replacement of the culvert on the western slough, dredging near the Maitland Drive outfall, removal of organic material in the Island Drive canal and dredging near the pump station. Other than the pump replacement, this work was assumed to be the responsibility of the golf course operator and therefore was not previously budgeted. Due to the flooding impacts on adjacent streets, staff determined this work should be prioritized and completed. This request backfills the project funds that were used in the Stormwater Management (C31000), Stormwater Pump Stations (C32000), Green Infrastructure/Trash Capture (C33000) projects to complete the work.
C17, C37. Fund 310 Capital Projects - Additional Storm Drainage Improvement Work - $1,000,000
Based on an updated FY 2023-24 year-end fund balance projection, additional fund balance was confirmed available for addressing replacement of storm culverts, installation of new storm mains, and other drainage related issued. Staff propose appropriating $1 million in Stormwater Fund (264) fund balance for these improvements.
C17, C37. Fund 310 Capital Projects - Green Infrastructure/Trash Capture Technical Correction - $87,400
The Stormwater Management Project (C31000) did not have enough funding for contracted storm culvert replacement work. Staff propose allocating $87,400 in Stormwater Fund (264) fund balance to the Green Infrastructure/Trash Capture Project (C33000) to backfill the portion of the $150,000 contract that was encumbered to that project.
C18. Fund 265 Parking - Electric Vehicle (EV) Charging in Parking Garage - $15,000 increased revenue
The City has for years offered free EV charging at the Civic Center parking garage. The City is paying on average $15,000 per year in electricity costs for these EV chargers, not including repair costs for the chargers. The City will begin charging for EV charging at the Civic Center parking garage, consistent with the charging rate set for the chargers at the Seaplane Lagoon Ferry Terminal. This proposal increases revenue to cover the electricity costs of EV charging at the parking garage for the last six (6) -months of the fiscal year at a charging rate of $0.40/kWh.
C19. Fund 265 Parking - Carryforward Prior Year Budget for Parking Enforcement Contract - $102,000
The City received a late invoice from the parking citation processing service provider in the amount of $101,226 for services rendered in FY 2022-23. Since the invoice was received after the cutoff date for making payments in FY 2022-23, the invoice was paid in FY 2023-24. The professional services account had an available balance of $128,376 at the end of FY 2022-23; staff propose carrying forward $102,000 of the unused budget to FY 2023-24 to cover the late invoice.
C20, C22. Fund 269 Urban Forest/Fund 272 Zone 5 - Funding for Urban Forest for Zone 5 Tree Work - $70,000
This is a one-time adjustment of Zone 5 (Harbor Bay Landscape and Lighting District) charges made previously to the Urban Forest Capital Project. The Urban Forest Capital Project transitioned to a Special Revenue Fund in FY 2023-24. The proposed transfer of $70,000 will repay the Urban Forest Fund for tree work done in Zone 5 in FY 2022-23.
C21. Fund 271 Landscape/Lighting District 84-2 Zone 4 - Landscaping, Recycling Units - $32,000
The City received late invoices for landscaping services rendered in FY 2022-23 that were paid in FY 2023-24. A carryforward of $12,000 in residual budget from the prior fiscal year is needed to ensure sufficient funds are allocated to pay for landscaping services in the current year.
Additionally, the audited fund balance at the end of FY 2023-24 shows higher than expected available funding to accommodate needs previously thought not to be achievable in FY 2023-24, including (1) $3,000 to purchase of spring flags to display along downtown Park Street to enhance ambience and encourage economic activity; (2) $7,000 to purchase and install two new recycling units; and (3) $10,000 for installation of seasonal décor.
C23. Fund 273 Landscape/Lighting District 84-2 Zone 6 - Engineer’s Report Technical Correction - $165,000
A technical correction is needed to match the capital improvements approved in the Engineer's Report for Zone 6 (Marina Village) with the approved budget. The requested one-time expense adjustment is $165,000 from the fund balance of the Zone 6 fund.
C24. Fund 274 Landscape/Lighting District 84-2 Zone 7 - Spending Plan to Dissolve Zone 7 - $88,127
The City Council provided direction on June 20, 2023 to enable dissolution of the Zone 7 by the end of FY 2023-24 (see File 2023-3146). The proposed expense adjustment of $88,127 will align the budget with a spending plan to reduce the fund balance of the Zone to $0 to enable this dissolution.
C25. Fund 275 Landscape/Lighting District 84-2 Zone 8 - Tree Injection Technical Correction - $1,080
A technical correction is needed to address an administrative error that charged injections to trees in Zone 7 (Bay Street) to Zone 8 (Webster Street) in FY 2022-23. The proposed technical correction will transfer $1,080 to reimburse Zone 8.
C26. Fund 280 Bayport Municipal Services District - Part-Time Pay Technical Correction - $30,000
The $30,000 part-time pay budget for park maintenance services in the Bayport Municipal Services District was inadvertently left out.
C27. Fund 281 Alameda Point Community Facilities District 17-1 - Seaplane Lagoon EV Chargers - $28,000 net expense
A budget adjustment is needed for the new EV chargers now on-line at the Seaplane Lagoon Ferry Terminal parking lot. Additionally, other electricity costs are higher than previously projected. Revenue collected from the EV charger provider, projected at $31,000, will partially offset the increased costs of $59,000.
C28, C39. Fund 310 Capital Projects - Harbor Bay Ferry Terminal Parking Lot ADA Improvements - $135,000
The ADA Transition Plan identifies accessibility barriers at the Harbor Bay Ferry Terminal parking lot and in the restrooms. Staff propose using available Harbor Bay Transportation Funds (287) for the $135,000 project rather than the limited funds previously appropriated by City Council for the ADA Transition Plan.
C29. Fund 290 Alameda Point - Legal Expenses - $500,000
The Alameda Point Legal Services budget in FY 2023-24 is $440,000, of which $344,027 has been spent as of December 12, 2023. Traditionally, this budget is only designated for transactional and advisory legal work. Litigation is not routinely budgeted from this line item. However, several non-routine litigation matters at Alameda Point are ongoing, including trials. Accordingly, additional budget of approximately $500,000 from the fund balance of the Alameda Point/Base Reuse Fund is necessary to fund such non-routine ongoing litigation.
C30. Fund 290 Alameda Point - Tree Maintenance Work - $167,000
Pruning and tree removals are needed in residential areas of Alameda Point for safety. The budget adjustment also includes additional as-needed and after hours work for Alameda Point trees for FY 2023-24. The tree work is expected to total $167,000 and will use the fund balance of the Alameda Point/Base Reuse Fund.
C31. Fund 310 Capital Projects - Parking Demand Management Grant - $742,000
On June 6, 2023, the Metropolitan Transportation Commission (MTC) awarded a $742,000 grant to the City to implement the Demand-Based Parking Pricing and Curb Management in the Business Districts and Ferry Terminals Project. On November 7, 2023, City Council authorized the City Manager to execute necessary documents with MTC to accept the grant funding (see File 2023-3414). At that time, staff noted that the revenue and expense budget for the grant would be included in the mid-year budget update. The City will receive reimbursement for supplies and staff time.
C32. Fund 310 Capital Projects - Littlejohn Recreation Center - $52,000
An additional $52,000 in funding from the General Fund is needed to complete the Littlejohn Recreation Center replacement project. The original project budget did not include $35,000 for fencing, landscape, and irrigation costs necessary to secure the facility, or $17,000 for furnishing, tables, chairs, and supplies.
C33. Fund 310 Capital Projects - Encinal Boat Ramp - $33,254
The funds received from State Grant for the Encinal Boat Ramp project were $104,233 lower than originally budgeted. An additional $33,254 is needed from the General Fund to cover expenses incurred and to close out the project.
C34. Fund 310 Capital Projects - Playground Replacement - $60,000
The Playground Replacement budget included $250,000 for private donations/contributions, but only $136,228 was received. At the end of FY 2022-23, $60,000 in funding from the Park Maintenance Improvements project (C51000) was used to cover the costs not covered by available revenue. Staff is now requesting appropriation of $60,000 from the General Fund to restore the budget in C51000 Park Maintenance Improvements.
C40. Fund 320 Transportation Management - Alameda Transportation Management Association (TMA) Pass-Through True-Up - $520,000
In September 2023, City Council approved a funding agreement with the Alameda TMA allowing pass through of Transportation Demand Management Fees for the implementation of the Alameda Point Transportation Demand Management Plan (see File 2023-3188). Staff reviewed the fund balance of the Transportation Management Fund (320) and determined that approximately $520,000 in fee revenue accumulated at the end of the prior fiscal year that needs to be passed through to the Alameda TMA. Staff propose increasing the budget for the Transportation Management Fund to enable pass through of the fund balance.
C41. Fund 421 Aquatic Center Debt Service - Debt Service and Costs of Issuance Update - $33,000
Lease revenue bonds for the new Aquatic Center were priced on December 14, 2023. Debt service payments were budgeted at $900,000 annually, and the actual annual debt service will be $863,400 in FY 2023-24 and $861,800 in FY 2024-25.
Additional funding is needed to cover costs of issuance already paid by City, including $24,000 for a bond rating update and $9,000 for a seismic assessment of the City building used to secure the lease revenue bonds. All other costs of issuance will be paid by the bond trustee and the trustee will reimburse the City for costs already incurred.
C43. Fund 501 Sewer Services - Machinery/Equipment Acquisition - $60,000
Sewer operations require confined space entry. While the Sewer program has the equipment to enter most manhole types, a Davit Arm is needed to enter certain manholes. Entry to these manholes is currently contracted out, which is costly and difficulty to schedule. The one-time purchase of the equipment for $60,000 using available fund balance in the Sewer Services Fund will allow this work to be done in house.
C44. Fund 601 Fleet Maintenance & Replacement - Advance Replacement from FY 2024-25 Budget - $91,284
A dump truck (MSC-07) was originally scheduled for replacement in FY 2024-25. Due to mechanical failures, staff requests adjusting the budget to advance the replacement to FY 2023-24 and avoid the repair costs on the existing truck. This proposal increases the expense budget in FY 2023-24 by $91,284 and separately the expense budget for the purchase will be backed out of the FY 2024-25 budget as part of the mid-cycle budget update.
C45. Fund 601 Fleet Maintenance & Replacement - Unexpected Repairs - $100,000
Unexpected, large scale repair costs are difficult to predict and estimate. Last fiscal year, the Fleet Maintenance function needed additional funding due to significant repairs for fire apparatus. This proposal increases the repair contingency budget by $100,000 in case there is a need. Funds will not be spent otherwise. If funding is used, the departments receiving the services will be charged as part of future cost allocation charges to bring the revenue to the Fleet Fund.
C46. Fund 603 Facility Maintenance & Replacement - Cost Allocation Correction - $483,187
The costs allocated to programs that receive Facility Maintenance services did not fully capture the overhead costs for operating the Facility Maintenance program, so the biennial budget for Facility Maintenance is under-recovering charges from receiver programs. The recommended adjustments are a technical correction for fully recovering the costs of the Facility Maintenance program.
C47. Fund 603 Facility Maintenance & Replacement - Maintenance Contracts - $22,900
The Facility Maintenance division has taken on two additional services: maintenance of the uninterrupted power supply systems (UPS) at the Alameda Police Department and Emergency Operations Center and landscape maintenance of the City Hall West drought tolerant landscape. Previously the landscaping costs at City Hall West were incurred by the Alameda Point Fund. These costs will be recovered via interdepartmental charges, per the Internal Service Fund model.
C48. Fund 603 Facility Maintenance & Replacement - City Buildings Update - $125,000
Fleet Garage Gate Replacement
Staff propose transferring $50,000 from the General Fund to the City Facilities Project (C41000) in the Facility Replacement Fund (603) to install a gate in the Fleet Services garage that allows mechanics to work with the doors open while protecting employees from unauthorized people walking in. Employees have expressed safety concerns at the garage to the labor union and the City Manager’s Office.
Uninterrupted Power Source Replacement at Police Administration Building
Uninterrupted Power Sources are necessary to maintain emergency communications during power outages. The existing system at the Police Administration Building has reached its end of life. This system was previously managed by the Police Department and will now be managed by Public Works. Staff propose transferring $50,000 from the General Fund to the City Facilities Project (C41000) in the Facility Replacement Fund (603) for this replacement. Ongoing maintenance costs will be incorporated into the Facility Replacement Internal Service Fund (603).
Bus Shelter Replacement
The City is responsible for the maintenance and replacement of bus shelters served by AC Transit. Staff propose transferring $25,000 from the General Fund to the City Facilities Project (C41000) in the Facility Replacement Fund (603) to replace a bus shelter at Santa Clara and Webster that was struck by an automobile.
C49. Fund 701 Successor Agency/ Fund 310 Capital Projects - Workers’ Compensation Cost Allocation Correction - $301,000
The Workers’ Compensation internal service charges for the Public Works Administration program were incorrectly allocated to the Successor Agency Fund. The recommended adjustments are a technical correction to recover Workers’ Compensation costs from the appropriate program.
V. Workforce Changes
The FY 2023-24 budget includes funding for 505 allocated full-time positions, excluding Alameda Municipal Power. The recommended workforce changes include the addition of two new positions, one position upgrade, and one departmental transfer, as shown below.
The effective date of approved workforce changes would be February 21, 2024 pending City Council approval.
ALTERNATIVES
• Authorize the budget amendments and workforce changes proposed in the staff report.
• City Council may take no action, in which case the previously adopted and revised FY 2023-24 budget and authorized positions would remain in effect.
• City Council may provide further direction on these proposed budget amendments and workforce changes.
FINANCIAL IMPACT
The proposed FY 2023-24 budget adjustments will increase the General Fund revenue projection by $2,938,000 in ongoing funds and decrease by $400,000 in one-time funds to $131.4 million in total. The proposed expense adjustments include $1,724,384 in additional operating expenses, and $270,254 in capital transfers, for total expenses of $132.8 million, excluding the one-time use of fund balance of $23,772,830 previously approved by City Council in June 2023, and previously approved carryover of $4,304,076 in unexpended budget from FY 2022-23. In total, staff project General Fund expenses to exceed revenues by approximately $29.5 million at year end.
The unaudited General Fund residual unassigned fund balance at the end of FY 2022-23 was $64.5 million. With the General Fund’s proposed mid-year operating expense budget of $160.9 million and projected revenues of $131.4 million, the General Fund residual unassigned fund balance is projected to be approximately $34.9 million at year-end.
The General Fund five-year forecast will be presented as part of the FY 2024-25 Mid-Cycle Budget workshops with City Council in spring 2024.
The net impact of the proposed adjustments on all other funds will be an increase in the revenue projection of $3,891,026 and additional expenditure authority of $7,330,667, excluding interfund transfers.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no climate impacts associated with this action; implementation of the Climate Action and Resiliency Plan continues to move ahead with available funding.
RECOMMENDATION
Adopt a resolution amending the Fiscal Year (FY) 2023-24 Budget; and adopt a resolution approving Workforce Changes for FY 2023-24.
Respectfully submitted,
Margaret O’Brien, Finance Director
By,
Jennifer Tell, Budget Manager
Exhibits:
1. FY 2023-24 Mid-Year Budget Adjustments
2. General Fund Budget Summary
3. Recommended Workforce Changes