Budget Presentation 2017-18 Final
FY 2017/18 OPERATING AND CAPITAL BUDGET &
FY 2017/18 - 2021/22 CAPITAL IMPROVEMENT PROGRAM
Town Council Meeting
5/16/2017
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Good Governance
Community Character
Quality Public Infrastructure
Public Safety
Civic Enrichment
Fiscal Stability
CORE GOALS
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Reconstruct Phase II of Almond Grove Streets
Complete the Bicycle Pedestrian Master Plan
Create a Complete Streets Policy Implementation Plan
Enhance the Diversity of Businesses in the Downtown
Address Downtown Parking
Address Unfunded Pension and OPEB Liabilities
Develop Measure B Transportation Projects and Funding Requests
Reduce Summer Cut Through Traffic
Install Bicycle and Pedestrian Improvements
Obtain an Age-Friendly Community Designation
STRATEGIC PRIORITIES FY 2017-2019
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Key Principles:
Balance the budget to maintain service levels
Continue to make progress on Strategic Priorities identified by the Town Council
Identify opportunities to enhance service delivery through technology and open government
Proposed Fy 2017/18 budget
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General Fund Balanced Budget
Proposed Fy 2017/18 budget
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Expected Increase
Property Tax
Transient Occupancy Tax
Business License Tax
Franchise Fees
Expected Decrease
Sales Tax
GENERAL FUND REVENUE TRENDS
General fund revenues
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Limited Increases
Non-Discretionary/Contractual
Salary, Retirement, and OPEB
Mandated Increases
Urban Run Off, Clean Water
Utility Rate Increases
OSHA Gas Masks
One-Time Uses
Street Tree Trimming
Library Collections
PROPOSED FY 2017/18 BUDGET
General fund
expenditures
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OUTLOOK
FIVE-YEAR FORECAST
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TOWN’S TOTAL UNFUNDED LIABILITY
CALPERS/OPEB
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CITIES UNFUNDED PENSION LIABILITY
CALPERS
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CITIES FUNDED PENSION RATIO
CalPERS
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LOS GATOS LEADS IN ADDRESSING OPEB
Los Gatos – 50% funded
OPEB
50% funded
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ACTIONS TAKEN BY THE TOWN
CALPERS/OPEB
2009 OPEB Trust established (Pre-funding)
2015 Side Fund $4.5M paid off
2016 GF CalPERS/OPEB Reserve established (minimum $300K per FY; $1.9 million from FY 15/16 year end savings)
FY 16/17 $1 Million OPEB additional payment
FY 17/18 Proposed $1 Million from prior years savings
Council Finance Committee exploring other strategies
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CIP Development Process
Council Core Goals and Strategic Priorities
Current and Scheduled Projects
Priorities are Matched to Available Resources
Planning Commission Review
Capital Improvement program
Proposed 5 Year CIP
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Proposed 5-year CIP: $45.2 M
Proposed FY 2017/18 CIP: $25.4 M
Carryforward: $21.4 M
New Funding: $4.0 M
FUNDING OVERVIEW
Capital Budget
Material Contracts – RFP or Bid
Service Contracts – RFP or Bid
Consultant Contracts – RFP (qualifications based)
Construction Contracts – Bid (price determinative)
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GFAR (65%)
Utility Undergrounding (15%)
Gas Tax (13%)
Traffic Impact Mitigation Fees (5%)
Grants and Storm Drain Fee (3%)
Total is 101% due to rounding.
SOURCE OF FUNDS
Capital Budget
Material Contracts – RFP or Bid
Service Contracts – RFP or Bid
Consultant Contracts – RFP (qualifications based)
Construction Contracts – Bid (price determinative)
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Project Concept – the Idea Stage
Rough scope and estimate
Refine Scope – Is there a Viable Project?
Driven by available funds
or project need
Detailed Estimate (Engineer’s Estimate)
Cost estimated by market,
experience, comparisons
Bid Supported Costing
Project defined and bid.
CREATING A CAPITAL PROJECT
Capital Budget
Costs
+/- 50%
or more
Costs +/- 30% - 50%
Costs +/- 15% - 30%
Costs +/- 10% - 15%
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Capital Budget
CREATING A CAPITAL PROJECT
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Design
Approval of Plans & Specs (Council)
Authority to Award (Council)
Construction
Close Out (Council)
STEPS TO CAPITAL PROJECT DELIVERY
Capital Budget
Design is iterative
Approval of plans and specs allows Council to see the project. Provides design immunity.
Authority to award – non discretionary for bids
Often combine these two steps.
Construction – where the project gets built
Close Out – report out project results. Decrease claim timeframe from 90 to 60 days. Moving towards posting report outs on the website in association with the project status.
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Material Contracts
Computers, Vehicles, etc.
Service Contracts
Landscaping, Custodial, etc.
Consultant Contracts
Financial Services, Design Services
Construction Contracts
Building or Repairing
TYPES OF CONTRACTS
Capital Budget
Material Contracts – RFP or Bid – buying something
Service Contracts – RFP or Bid – more operating budget type items
Consultant Contracts – RFP (qualifications based)
Construction Contracts – Bid (price determinative)
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Design
Design Review
Public Outreach & Communication
Project Delivery and Inspection
Testing
Construction
PROJECT COSTS
Capital Budget
Design is typically consultant costs. Costs vary dramatically depending on project. Should equal 10% of project cost.
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Design Review is intensive for complex projects.
Public Outreach at a high level is important.
These are the beginning of staff costs. Should total 8-12% of project cost. Discussion on tracking these costs.
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Project Delivery and Inspection are in house costs. This is the opportunity to ensure the project is built correctly. Consider the life of the project – pavement, buildings, etc.
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Testing – Allows for highly technical analysis of materials and methods. Concrete cylinders as an example.
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Construction – the build it phase. Most of the project costs here.
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Close out – final paperwork, payment, grant reimbursement, etc. Can be time consuming.
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Accountability & Transparency
Reflect Actual Program Costs
Target 8% - 12%
Staff Capacity
4 FTE Operating Budget for Project Delivery
(+1.9 FTE Administrative)
Summer Spike in Project Delivery
Existing Staffing Hours Short of Need
Potential for Temp Staffing
to Increase Capacity
PROJECT STAFFING
Capital Budget
Estimated 5000+ hours in need to deliver projects in CIP
Manage demand with temp staffing
Cost to project
Alternative to spread project delivery over time.
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Almond Grove
Pavement Maintenance
SR2S / Bike Ped Plan Projects
Belgatos Park Restroom
Bachman Park
Storm Drain Master Plan
FY 2017/18 PROJECT HIGHLIGHTS
Capital Budget
Pavement - $2.5M per year. Holds the Town steady at a PCI of 66
$28M backlog. $3.5M to get to a 72. $3M to increase to a 70
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RECOMMENDATIONS
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RECOMMENDATIONS
Consider the FY 2017/18 Proposed Operating Budget
Consider the FY 2017/18 - 2021/22 Proposed CIP
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Calpers Investment loss impact to pension liability
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Equipment Replacement Fund
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Facilities Maintenance Fund
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ABAG Self Insurance Fund
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Workers’ Comp Self Insurance Fund
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Management Information System Fund
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Office Stores Fund
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Vehicle Maintenance Fund
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