HomeMy WebLinkAbout1996-03-25 City Council (6)THE SUBJECT OF
THIS REPORT
ISA
COUNCIL PRIORITY C ty
BUDGET 1996-98
City of Palo Alto
Manager Report
TO:HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE
SERVICES
AGENDA DATE: MARCH 25, 1996 CMR:165:96
SUBJECT:BUDGET ISSUE:
CONSIDERATION
PROGRAM
CONCEPTUAL FRAMEWORK FOR
OF 1996-98 CAPITAL IMPROVEMENT
RECOMMENDATIONS:
This report is information on an important budget issue, providing the conceptual framework
for consideration of the 1996-98 Capital Improvement Program (CIP). It is recommended
that the Council consider the option of pursuing supplemental long-term financing, for
rehabilititating the City’s aging infrastructure, and the City Manager’s Proposed 1996-1998
Capital Improvement Program has been prepared taking this into account. A comprehensive
infrastructure plan and recommended t~mancing mechanisms will be presented to the Finance
Committee in the fall of 1996.
BACKGROUND:
City General Fund departments submitted over $14 million in requests for the 1996-1998
CIP, an unprecedented level. The majority of these requests did not represent augmentation
of current services or new services, but were instead focused on repair and rehabilitation of
City facilities that are nearing the end of their useful lives in terms of service provision.
Attachment 1 summarizes the requests received. There may be other needs, as no specific
direction was given to staffto submit infrastructure projects in this year’s CIP. The scope
and dollar amount of projects clearly indicates that the traditional, $3-4 million pay-as-you-
go financing strategy for the General Fund CIP could not meet the identified needs, even
after screening the projects, a supplemental long-term financing plan is required.
In November 1995. (CMR:455:95), staffrequested that the Council give conceptual approval
to proceed with the initial stages of setting up a Landscape and Light’mg Benefit Assessment
District (LLAD) to fund additional levels of service related to tree care and maintenance, and
CMR:165:96 Page 1 of 12
maintenance of Palo Alto Unified School District (PAUSD) playing fields. The Finance
Committee decided to hold the staff recommendation in Committee, pending receipt of a
comprehensive review and funding proposal for the City’s non-utility infrastructure needs,
along with issues related to park maintenance. In its review of the Tree Task Force
recommendations on December 18, 1995, the City Council affirmed this direction. Staff
plans to return to Council in fall 1996 with such a comprehensive infrastructure plan.
Attachment 2 is a proposed timeline.
It would be premature to assume that the Council would approve any or all elements of a
supplemental long-term financing plan in fall 1996. Therefore, a somewhat different
approach was taken to develop the General Fund CIP for 1996-98. The City Manager’s
Proposed 1996-98 Budget assumes the "traditional" pay-as-you-go CIP for FY 1996-97. For
the second year of the budget, 1997-98, another "traditional" pay-as-you-go CIP has been
prepared, composed mainly of continuing projects. If the Council were to decide not to
pursue supplemental long-term financing, the 1997-98 Budget would be adjusted during the
Interim Budget process. Under this concept, the second year CIP could also be used, again
with adjustments, in the event that Council decided to take additional time or to undertake
additional public outreach programs for any elements of a supplemental long-term financing
plan, and had not made a final decision by the time the Interim 1997-98 Budget process was
under way.
If, on the other hand, Council decided, after reviewing all the infrastructure needs of the City
in fall 1996, to direct staff to pursue supplemental long-term financing, staff has a
contingency plan which could serve as the basis for the 1997-98 CIP. This CIP, with
adjustments, would be developed for presentation to Council during the Interim Budget
process. To prepare this contingency plan, a review has been completed of all projects
submitted for the 1996-98 CIP to determine whether they would be appropriate for either
debt or assessment district financing. (No assumption was made about other supplemental
long-term financing options, such as increases to utility users tax revenues). The
contingency plan envisions a 1997-98 CIP which reflects a combination of pay-as-you-go
and supplemental, long-term financing for major capital projects in areas such as buildings,
infrastructure and parks.
POLICY IMPLICATIONS:
It is prudent for Council to consider a change to the traditional pay-as-you-go philosophy for
the General Fund CIP, as the City’s aging infrastructure will require significant investment
in the next several years, and the traditional pay-as-you-go financing will not be sufficient.
Potential supplemental long-term financing options include debt f’mancing and other
alternative revenue sources, such as a downtown business improvement district and a
Citywide landscape and lighting assessment district. The Council may also have the option
CMR:165:96 Page 2 of 12
of extending the utility users tax (UUT) to international and interstate phone calls, or of
raising the UUT rate; however, it is unclear at this time how the recent court decision on
Proposition 62 may impact the Council’s ability to act.
The City has used such alternative financing options for infrastructure in the past. Debt
financing has been used for capital improvements to the Golf Course, and was also utilized
when the City needed to make major structural improvements to the Civic Center for seismic
safety and fire prevention. Parking assessment districts in the Downtown and California
Avenue areas were the vehicle to issue debt to acquire land for, and construction of, parking
facilities. The UUT, approved by voters in 1989, was a general purpose tax, but filled a
funding need to address the backlog of street and sidewalk repair. The Storm Drainage
Enterprise Fund was created in 1989 to address major capital requirements in that system,
previously part of the General Fund base budget.
DISCUSSION:
In recent years, it has become apparent that the City’s infrastructure is aging rapidly, and that
major efforts will be required to ensure continuation of adequate levels of service. The City’s
Utilities are already well along in the process of infrastructure rehabilitation. The Electric,
Water, Gas and Wastewater Collection Systems have all embarked on a major infrastructure
renewal program. The Water Quality Treatment Plant Partners are currently in the early
stages of investigating alternatives for a capital rehabilitation plan for the sludge incinerators
that will require debt financing and may range from $15 million to $30 million.
In the 1995-2000 CIP, the Council conceptuallp approved moving towards acquisition of the
Los Altos Treatment Plant site for construction of refuse transport facilities and possibly a
Utilities infrastructure program staging area. This project could cost as much as $6.5 million
for site acquisition and construction.
The City recently issued $8.6 million in utility revenue bonds to finance first phase
improvements to the Storm Drainage system. While the final scope of the storm drainage
master plan implementation is dependent upon the results of a public outreach effort and
Utilities Advisory Commission review currently underway, it is estimated that up to a total
of a 30-year, $60 million rehabilitation program may be required, to be financed through a
combination of debt and pay-as-you-go, rate-based financing.
It is not only the City’s Utility operations that are sorely in need of attention, however. In
February 1996 (CMR: 123:96), staff presented an update to the Finance Committee on the
proposed renovation of the Golf Course. Staff anticipates beginning construction in FY
1997-98, and is recommending issuing debt ($5.0-$6.0 million in revenue bonds) to finance
the bulk of the improvements, with some in-house improvements being undertaken in
CMR:165:96 Page 3 of 12
subsequent years. Consultant work has also recently begun on a planning and feasibility
study for the development of a parking structure(s) on one or more sites located within the
parking assessment district in downtown Palo Alto. The feasibility study is included in the
City’s 1994-95 CIP and will include conceptual designs, cost estimates, environmental
analysis, economic impacts and consideration of ground floor retail uses. The estimated cost
of the study is $80,000. The General Fund would eventually be repaid for the costs of the
study from bond proceeds generated to construct a parking facility, should an assessment
district be formed for that purpose. The cost to design and construct a parking structure(s)
is likely to be in the range of $4 to $6 million and would be fully financed through debt
issued by the assessment district.
However, the majority of General Fund-supported programs impacted by deteriorating
infrastructure do not have the option that the rate- or fee-based operations have to pass these
costs for maintaining the infrastructure back to the customers purchasing the commodity or
receiving the service. This report focuses on those infrastructure needs which do not have
an identified source of funding at this time.
Buildings and Building Support Systems:
The 1995-96 Public Works budget includes funding for the first phase of an Infrastructure
Management System, which will encompass City buildings and building support systems.
The consultant working on the project is scheduled to complete data gathering and have a
report to the Finance Committee in August 1996, which will identify a recommended
prioritized list of backlogged infrastructure replacement and maintenance items with costs,
as well as an annual life cycle expenditure requirement. Information from this report will be
critical to determining funding capacity for this element of the City’s infrastructure. It is
anticipated that, in future years, the Infrastructure Management System will encompass all
other General Fund infrastructure components, such as bridges, parks and parking lots.
Over the past several years, the only building system category which has received priority
for CIP funding is roof replacement. Many of the City’s buildings are approaching 30, 40
or 50 years old, and their roofs have deteriorated to the point of requiting replacement.
While significant progress has been made by funding roof replacements at the Civic Center,
Municipal Services Center, Senior Center and several fire stations, a significant short-term
backlog remains. It is estimated that $700,000 will be required over the next five years for
roof replacement projects, in order to prevent failure and leaks as the City’s buildings
continue to age. This figure will be updated upon completion of the building systems
assessment.
The Police and Fire Departments have significant space needs that are not being met by the
space allocated to them in the Civic Center complex. In the 1996-97 CIP, the Police
Department submitted a proposal for major structural modifications to the A Level to
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reconfigure the current locker rooms and office space area. The reconfiguration is needed
since the existing space is no longer adequate to meet the needs of Police personnel. While
some minor changes have been made over the years in order to accommodate female and
reserve officers, these modifications have resulted in five small, separate and inadequate
locker rooms that still do not provide enough room for all the lockers that are needed. The
piecemeal approach has also resulted in a serious compromise to the security of the area.
One of the great security concerns is that officers store their weapons in their lockers.
Additionally, the design of the office areas on A Level does not meet minimum standards for.
efficient use of space, which has resulted in crowded and compromised working situations.
For example, until a recent temporary remedy was found, nine sergeants were sharing a 64
square foot office.
The Fire Department submitted a project to equip a modem Emergency Operations Center
(EOC), utilizing not only the A level, but other City Hall space. The existing EOC is not
adequately equipped or sized to function effectively or efficiently during a long-term
disaster. Since the current EOC serves as the City’s computer training center, the project
would also involve enabling the Cubberley Community Center to be connected via a wide-
area network to City Hall, so that computer training can be moved. Preliminary analysis
indicates it may be prudent to consider the need for a separate Public Safety Building, prior
to spending $1 to $2 million, plus more, for such renovations of the current, inadequate space
in City Hall.
Community. Services Facilities
As part of the discussion of the Comprehensive Plan (CMR: 119:96), staff presented the
Council with information regarding the stress on community facilities resulting from longer
operating hours, more diverse programs and uses, and more things happening at each site.
Reinvestment in these aging facilities - libraries, the Cultural Center, community centers -
will be critical in the near future. In addition, emerging service concepts may require
consideration of new facilities for childcare, youth programs, homeless services or the
performing arts. The Community Services Department is currently preparing an inventory
of the facilities needs, and will bring that back as part of the overall infrastructure plan in fall
1996.
Tree Program
In December 1995 (CMR:516:95), stafftransmitted recommendations to the Council on Tree
Task Force (TTF) issues. The Council adopted a goal of phased implementation of certain
TTF proposals over a two to five-year period, subject to the development and approval of
new revenue sources during that period. The TTF proposals included staffing and funding
to undertake: a five-year average trimming cycle, annual planting targets, creation of a
nonprofit tree group, and the development and implementation of a tree protection ordinance.
Staff estimated the costs associated with implementing the TTF proposals at $342,000 in
CMR:165:96 Page 5 of 12
ongoing additional annual costs for the General Fund and $169,000 in one-time General
Fund costs. In addition, maintenance costs for Golf Course trees and trees in open space
areas, which were not a part of the TTF proposal, will need to be considered in developing
0the total cost of the Citywide tree program.
PAUSD Fields
As part of the 1995-96 Budget, Council approved a parmership arrangement with PAUSD
which involved the City assuming responsibility for the maintenance of the District’s athletic
fields at two middle schools and one elementary school (CMR:202:95). Because of the need
to identify supplemental long-term financing for the additional maintenance and capital costs
associated with the plan, the first two years of implementation envision only an enhanced
maintenance effort, with significant capital expenditures not beginning until at least the third
year. The 1995-96 and 1996-97 annual budgets of approximately $370,000 will escalate in
1997-98 to $640,000, with the assumption of the remaining 24 acres of elementary school
sites into the program; and in 1998-99 to $1,131,000 and 1999-2000 to $1,280,000,
incorporating maintenance and initiating capital improvements to all sites. This five year
plan does not include all capital renovations required: an estimated $609,000 would remain
for elementary school in~gation renovations and major renovations to the tennis courts at JLS
and Jordan School sites.
Parks and Open Space
In early 1989, Community Services staffprepared a condition evaluation of the City’s urban
parks, landscaped median strips, landscaped parking lots and three open space preserves, in
order to provide the basis for a long-range plan for the City’s CIP to address deficiencies in
the parks system and related parks equipment. The- study was updated and revised in 1992
to separate pathways, picnic areas, tennis courts, basketball courts and satellite irrigation
sites. This Parks Infrastructure Survey, updated each year to recognize inflation and to
incorporate changes to proposed projects, has been used to develop the past six years’ capital
program for the parks. Another full revision is planned for the summer of 1996, to be
incorporated into the comprehensive report to the Finance Committee on infras~acture. The
current cost estimate for parks infrastructure needs totals $6.3 million.
The City also manages and maintains approximately 4,000 acres of open space, including
Foothills Park, the Arastradero Preserve, Esther Clark Park, Byxbee Park, Palo Alto
Baylands and the City-owned marshlands in East Palo Alto. Contained within these open
space lands are more than 22 miles of hiking trails, 8 picnic areas, an overnight campground,
2 nature interpretive centers, a sailing station, numerous restrooms, 3 lakes, 21 acres of turf
and thousands of trees. Staffhas been working diligently to maintain this critical element
of the City infrastructure, but the scope of work and associated costs is daunting. It includes
addressing issues of overgrown trees; needed trail restoration; erosion damage; antiquated
irrigation systems and the need to install backflow devices for health and safety reasons;
CMR:165:96 Page 6 of 12
maintenance of firebreaks given heavy vegetation growth; picnic and campground area
amenities; heating and ventilation systems at the interpretive centers and ranger stations, as
well as deterioration due to wear and tear; road systems in the open space areas, lake and
duck pond aeration and vegetation clearance; parking lots; duck pond aeration and
vegetation; signage; fencing; and a host of other concerns.
Cubberley Master Plan
In the original Cubberley Master Plan, approximately $18 million in improvements to the
Cubberley facility were identified. These needs have been prioritized and some capital
repairs, mainly to roofs, has taken place. However, in November 1995 (CMR:457:95), staff
informed the Council that revenues from the UUT over the past several years have been less
than originally anticipated, and furore projections do not provide for significant increases in
UUT revenues. Revenues from the UUT are not sufficient to cover payments associated with
the Lease and Covenant Not to Sell or Develop with the PAUSD, as well as to provide
funding for eliminating the backlog of street and sidewalk repairs over time, provide for
operational and maintenance costs associated with the Cubberley Community Center, and,
over a period of years, fund capital improvements outlined in the Cubberley Master Plan
(CMR:240:91). A separate budget issues staffreport provides the Council with alternatives
for addressing this infrastructure and service level issue.
Streets and Sidewalks
All of the City’s streets are surveyed every two years, to assess condition and to determine
maintenance requirements. The last survey was completed in early 1994. A new survey will
be conducted in spring 1996. The current backlog of unfunded street maintenance needs is
$3 million. This backlog is coupled with an average annual deterioration rate of $1.5 million
of additional repairs needed per year. Historically, the CIP has provided $1.8 million per
year for contract street maintenance and resurfacing activities. Thus, the annual budget -
allocation exceeds the average deterioration rate by $0.3 million per year, enabling that
amount to be applied to the accumulated backlog. At $0.3 per year, it would take an
estimated ten years to accomplish the known backlog of work.
The estimated backlog for sidewalk, curb and gutter replacement is based on a Citywide
needs assessment performed in 1985. This assessment is updated based on actual work
requirements experienced during annual repair contracts as compared to 1985 estimates.
Based upon that data and additional requirements added to the program as legislative
mandates, the current estimated backlog is $9 million. This includes an estimated $1.5
million in curb ramp installations, required by the Americans With Disabilities Act, which
were not part of the 1985 database. The CIP has historically provided $0.5 million per year
from a combination of utility users tax and other General Fund revenues for the sidewalk
program. At this rate of funding, the backlog would take eighteen years to be accomplished.
CMR:165:96 Page 7 of 12
Two factors could drastically increase the identified backlog: an increase in the deterioration
rate; and competing demands for the use of revenues currently allocated to street and
sidewalk replacement.
Regarding the first factor, the estimated street backlog and deterioration rate was developed
from historical information from the late 1980’s through the mid-1990’s, most recently
updated in 1994. The majority of this period involved unusually mild, dry weather, and
consequently reflects minimal pavement deterioration and tree root growth. After the past
two years of normal to above average rainfall, staff has made preliminary observations of
significantly increased pavement deterioration, as well as above normal tree root growth.
Therefore, staff is concerned that this year’s update may show corresponding increases in
both backlog and deterioration rate.
The second factor potentially subject to change is the allocation of funding for street
resurfacing and sidewalk replacement. Funding for the City’s street and sidewalk program
comes from two sources: the General Fund and Street Improvement Fund. In the General
Fund, $1 million is annually allocated from L~T revenues, along with $0.4 million in non-
UUT funding. The Street Improvement Fund, which relies on State gas tax monies and
interest earnings, provides another $0.9 million to $1 million for street resurfacing.
The Street Improvement Fund has traditionally been used primarily to fund the City’s street
resurfacing program; each year, some monies have also been allocated for minor traffic or
bicycle safety improvements. In recent years, however, the number and cost of such projects
has escalated sharply, to the point that projections now show that the Fund’s reserve balance
will be totally exhausted within the next two years. This means that, unless Council
determines that the prior commitment of funding for street resurfacing should be scaled back,
the General Fund will have to take on such traffic and bicycle safety improvements or
increase its share of funding the total street resurfacing program budget. Insufficient UUT
revenue to meet such needs was discussed briefly above, in the section on the Cubberley
Master Plan; and is also discussed in more detail in a separate budget issues staff report.
Traffic Safety. Improvements
Infrastrncture costs associated with the Traffic Program are discussed in a separate Budget
Issues staff report (CMR: 161:96).
Comprehensive Plan Implementation
Implementation of the new Comprehensive Plan is discussed in the accompanying staff
report on Service Proposals Proceeding on Alternative Timelines (CMR:139:96). An
estimate of the capital costs will be made during preparation for publication of the Draft Plan,
scheduled for fall 1996.
CMR:165:96 Page 8 of 12
Downtown Business District Improvements
Funding of $100,000 for the schematic design for downtown improvements is included in
the 1995-96 Budget. The goal is to define the areas of the downtown that are in need of
improvement, prioritize improvements to be made, propose a schedule for undertaking the
improvements and identify the costs of the program. Based upon the final schematic design,
estimated costs for implementation are $250,000 for FY 1996-97 and a like amount for FY
97-98. First year improvements will be in signage, street furniture, newsracks and
landscaping. It is anticipated that downtown business owners will participate financially in
implementation of the improvements. Future improvements could total as much as $1 to
$1.5 million, depending upon available funding.
University. Avenue Intermodal Transportation Center ("Dream Team")
Planning Department staff indicates there is a high likelihood that the State will provide
$200,000 toward the next phase study of issues related to the University Avenue Intermodal "
Transportation Center area. Funds would likely become available after fall 1996. A total of
$400,000 was originally projected to cover the full costs of the Environmental Impact Report
(EIR) and design development. Staffhas prepared a draft request to three other entities, the
Joint Powers Board, County Transit Agency and Stanford University, to contribute the
remaining unfunded costs of this element of the project. Staff from these entities have
indicated tentative willingness to jointly plan the area, and City staff believe that shared
design development and EIR costs is in the interest of all the entities. If funding is identified,
it is anticipated that the design/EIR will start in FY 1996-97 and continue into FY 1997-98.
Implementation will occur incrementally, may be paid for by developments in the area or
other public agencies and is unlikely to be possible until the year 2000, with the exception
of circulation and facility expansion and potential circulation improvements now being
considered by the Santa Clara County Transit Agency. The entire cost for the improvements
is estimated to be $33 million.
Infrastructure Project Management
Public Works staff is currently developing a computerized project management system,
which will fully assess the ability of the Public Works Department to administer the
construction-related portion of the CIP budget. Preliminary results indicate that the current
level of staff’mg is unable to keep up with the FY1995-96 and proposed FY1996-97 CIP
workload. This confirms the findings of the Hughes Heiss audit, which concluded that, in
the case of the Engineering Division, three additional FTE’s are required to support the
assigned workload. Staff intends to perform a more comprehensive evaluation, taking into
account the workload generated from both the Infrastructure Management Study, and from
a possibly expanded FY1997-98 CIP program funded from nontraditional funding sources.
The workload capability information would be available when these items are discussed with
Council next fiscal year.
CMR:165:96 Page 9 of 12
ALTERNATIVES:
The 1996-97 CIP allocates approximately $4.7 million for immediate capital needs, focusing
on projects which represent health and safety concerns or deteriorating infrastructure that,
if not addressed, will be significantly more expensive to repair or rebuild in future years. In
addition, some projects are recommended because their implementation will have substantial
productivity benefits for the entire City. Instead of preparing a "traditional" CIP for 1997-98,
however, included in the proposed budget is only the funding which will be required to
continue or fulfill commitments rnade for projects through FY 1996-97. It is recommended
that alternative additional funding be pursued for capital improvements needed in 1997-98
and subsequent years, and that the 1997-98 CIP should be finalized after Council has given
approval to a specific funding strategy.
A number of altematives could be considered to address infrastructure issues, alone or in
combination one with the other.
Pay-as-You-Go Financing or Financing from the Budget Stabilization Reserve
The Council could choose to continue to utilize the pay-as-you-go philosophy for major
infrastructure needs. This would mean prioritizing the most critical needs, and postponing
capital rehabilitation and replacement for many projects. The Council could also make
reductions in the operating budget by reducing services, in order to make monies available
for the capital program. The Budget Stabilization Reserve, on the other hand, is forecast to
be approximately $15 million at the end of this fiscal year. Council has adopted a policy to
keep this reserve at between 10 and 30 percent of General Fund operating expenditures,
roughly $8 million to $30 million. The current level is within those guidelines. Council
could choose to use these accumulated savings to address infrastructure needs.
Given the magnitude of the needs, either pay-as-you-go or reserve financing is not viable on
its own, without consideration of other sources of supplemental financing.
Debt Financing
Debt financing is appropriate for large projects or for a number of similar projects (such as
facilities rehabilitation) that cannot be accommodated within the pay-as-you-go CIP. Assets
acquired or rehabilitated using debt financing must have useful lives commensurate with the
term of the debt. Debt financing may also provide cost benefits in cases where advanced
deterioration means an asset is more costly to repair or replace than if replacement were
planned for the optimal point in its life cycle. This type of financing allows payments to be
spread evenly over the economic useful life of the acquired or restored asset(s). It also
ensures, from an equity standpoint, that the people who are enjoying the benefit of an asset,
such as a facility, are the same ones who are paying for it. There are at least $10 million in
such projects that staffbelieves could be debt financed, judging from 1996-98 CIP submittals
alone. Finally, debt financing can be identified with a specific geographic area. Assessment
CMR:165:96 Page 10 of 12
districts are typically formed for these types of improvements. The next two examples are
types of assessment districts.
Landscape and Lighting Assessment District
A recent staff report (CMR:455:95) provided information on this form of financing. Staff
believes that a landscape and lighting assessment district would be appropriate for funding
an expanded tree program and the PAUSD fields, as well as augmented parks and
landscaping work. The current tree program, or other current parks maintenance and capital
programs, could also be funded using an LLAD.
Special Assessment Districts
Special assessments may be used as a financing vehicle when the value or benefit to property
of the improvements for which the assessment is levied can be assigned to the individual
properties. This may be appropriate financing for business district improvements. Improve-
ments are usually associated with infrastructure or support structures, including street paving,
sidewalks, curbs, gutters, street lighting, off-street parking, or landscaping. There are a
number of special assessment acts under Califomia law, and districts do not necessarily have
to be formed for debt financing purposes, but may be used solely for maintenance.
Utility. Users Tax
The Council could increase General Fund revenues over the long-term, by increasing the
UUT rate or by approving the extension of the tax to interstate and international phone calls.
In September 1993, staff presented the Finance Committee with a recommendation to
consider extending the UUT (CMR:423:93). It was estimated at that time that the additional
revenue that could be generated by such action would be between $400,000 to $600,000 per
year. Staff believes that this may have been a conservative estimate. The Finance
Committee decided to hold the extension of the UUT in Committee for the purpose of
determining which customer classes would be impacted and the nature of the impact, and to
recommend to the Council that no further action be taken in the absence of a determined
fiscal need.
Both the extension of the UUT and an increase in the UUT rate may be affected by the recent
court decision regarding Proposition 62, and by a proposed voter initiative that would sharply
curtain cities’ ability to raise taxes. It is unclear how the decision affects Charter cities, and
until this issue is either clarified by the legislature or the courts, this option may or may not
be possible.
FISCAL IMPACT"
Attachment 3 summarizes cost estimates for each of the infrastructure areas discussed, and
provides an indication of potential financing sources.
CMR:165:96 Page 11 of 12
ATTACHMENTS:
Attachment 1:
Attachment 2:
Summary of 1996-98 Capital Improvement Fund Requests for the
General Fund and Street Improvement Fund
Proposed Timeline for Consideration of Comprehensive General Fund
Infrastructure Plan
Attachment 3:Estimated Unfunded Infrastructure Needs and Potential Financing
Mechanisms ’
DEPARTMENT HEAD APPROVAL:~. ~
Em~ily Harrison
¯Deputy City Manager,
CITY MANAGER APPROVAL:
CC:N/A
CMR:165:96 Page 12 of 12
ATTACHMENT 2:
PROJECTED TIMELINE
for the Infrastructure Plan
DATE ACTION ITEM FOR REPORT
January CIP Screening Committee Meeting to determine goals for the Long-Term
infrastructure needs.
April-May Gather information, structure report, and write it up.
June 30 Consultant Infrastructure Management System report due.
July Report to CIP Screening Committee.
Aug 21 Report to City Manager.
Sept 12 Finance Committee Meeting.
Oct 21 Council meeting.
~o~_