The City of Oakley will be hosting a Special Meeting of the Oakley City Council which will seek to approve its 2014-15 Annual Operating and Capital Budget.
The Total Fiscal Year 2014-15 Recommend Appropriations include:
- General Fund – $15,854,959
- Special Revenue Funds – $13,220,418
- Debt Service Funds – $2,491,546
- Capital Projects Funds – $6,155,864
- Internal Service Funds – $1,554,950
According to the Staff Report, the City had a 34% reserve ($4.7 million) which is $2 million more than the City’s targets 20% reserve level. They will be looking to spend $2 million of that reserve on one-time expenditures which was recently discussed by the City Council.
Meanwhile, there is a new Financial Policy included which states that 25% of the available replacement reserve balance, up to a maximum of $100,000, would be budgeted in a new “unassigned replacement reserve balance” account. The use of these funds would, like the other unassigned balances, require City Manager approval.
The City budget includes $17,500 in special funding for Agricultural Preservation for Viticulture—it should be noted this program is still not developed.
The City has also budgeted $275,000 for a Revolving Loan Program (a detailed parameters are still under development). The new
The City has also set aside $350,000 for Transition Costs associated with forming its own police department should the City want to end its contract with the Contra Costa County Sheriff’s Office—no decision has been made and Staff is still researching the idea.
Below is Oakley City Manager Bryan Montgomery’s Letter to the Council regarding the Annual Operating and Capital Budget – Fiscal Year 2014-15.
For the full 200 page 2014-2015 budget, click here
Oakley City Managers Budget Message For Fiscal Year 2014-15
INTRODUCTION
It is my pleasure to present the Fiscal Year 2014-2015 Recommended Budget for your consideration. The Budget for operations is balanced, but tight. As mentioned in the mid-year report, the City is continues to see modest benefits from improvement in the local economy. Employment continues to improve gradually and both business and building activity continue to increase. Real estate market values have improved as well, although we will need to confirm how much of an increase in property taxes to expect when the Assessor releases his valuations in July.
As always, we have developed the Recommended Budget with restraint and a focus on core services. While the Budget includes some increase in revenues, we also expect some losses, in particular, the State’s denial of the $250,000 minimum administrative allowance to manage the wind down of the Successor Agency to the Oakley Redevelopment Agency. In addition, we are facing a projected increase of approximately $600,000 in contracted police services costs charged by the County to maintain our current level of service. These items leave little for new initiatives; however, the Budget does include additions to the City’s operations that you directed at mid-year– adding to our economic development and code enforcement teams.
Lastly, we continue to increase our emphasis in restoring the annual allocations to augment roadway maintenance; in order to do so, it has required a reduction in allocations to the Vehicle & Equipment Replacement Reserve Fund. As a result, our projected balance in that fund will fall below our policy threshold; but given the Fund has a balance of more than $1 million, the Budget assigns more weight to the priority of restoring recurring capital expenditures. Should property tax or other revenues exceed the conservative level in the Budget, we will have to opportunity to propose increasing the allocation to the Vehicle & Equipment Replacement Reserve Fund.
Each year, we also look at the State Budget to determine whether there are components likely to affect the local outlook for the City. The State’s Fiscal Year 2014-2015 Budget was just recently updated and the State continues to report better than expected current year revenues and has begun focusing on establishing policies to ensure longer-term stability in the State’s budgeting practices, both of which are favorable and lead us to expect no further local government takeaways. We will continue to monitor State budget discussions and report to you any adjustments to the City’s Budget we believe become necessary.
Since the Budget Work Session held in May, we have also included all of the onetime uses of fund balance discussed, appropriating the full $2 million as directed. A detail of those items is included below. The appropriation of these funds reduces the projected fund balance to the City’s target policy level of 20% of annual budgeted expenditures.
Overall, we are not able to include in the Recommended Budget all that we know is on the City’s wish list, but the Budget presented here is lean, balanced, and remains true to the City’s current strategic priorities.
ACCOMPLISHMENTS
As a team, the City Council and all City departments play a role in accomplishing the goals and objectives outlined in the Strategic Plan. Towards that end, just some of the accomplishments from this year include:
- Successfully introduced the Heart of Oakley Festival, highlighting locally grown grapes, new businesses and the newly renovated are of Downtown. e Continued the City’s extensive public information program, leveraging online and social network communications using Nextdoor, Facebook, Twitter, and the City’s ;weekly Oakley Outreach email blasts, and publication of the quarterly Recreation Guide, and biannual publication of the OakLeaf newsletter.
- Launched the new Image Silo program, making a searchable public document database available on the City’s website.
- Installed safety improvements in the City’s parks, new bleachers for parks ball fields, and completed implementation of the automated irrigation system, which will result in improved water management and reduced maintenance costs for the affected City parks and streetscapes.
- Expanded the City’s recreation programs in virtually every way – coordinated more classes, more City events, and served more participants.
- Initiated the 2014-1022 Housing Element Update project
- Updated City ordinances related to commercial vehicle parking, Horne based businesses, accessory structures, and commercial signage.
- Secured the City’s third allocation of grant funding for the You, Me, We Oakley! Program, totaling $92,000.
- Expanded the City’s volunteer and project search internship programs -achieving significant savings in Staff cost
- Approved entitlements for twelve separate residential and commercial developments
- Approved amended Development Agreements for property in the Dutch Slough development area Assisted with components of the new Ace Hardware building in the Oakley Plaza.
- Approved plans for Grocery Outlet to locate within the Downtown Oakley Plaza property.
Capital projects completed or nearing completion this year include
- The Downtown Main Street Improvement project
- The O’Hara A venue widening projects that include a segment from Vineyard to Carpenter and from Laurel to Cypress
- The Civic Center parking lot resurfacing project
- Traffic safety and neighborhood traffic calming projects in the Gateway and Riata neighborhoods.
- All planned fiscal year 2013-2014 pavement management plan projects
- All planned fiscal year 2013-2014 City-wide safety improvement plan projects
- All planned fiscal year 2013-2014 gap closure projects
- All planned fiscal year 2013-2014 street name sign replacement projects
- Supervised the construction of two (2) new City parks in the Summer Lake subdivision (Lakeside Park and Leeward Park)
GENERAL FUND
The Recommended General Fund Budget reflects our continued commitment to keeping City administrative operations lean and ensuring the budget reflects a focus on the City’s highest priorities: public safety, economic development, completion of capital projects, and maintenance of the City’s neighborhoods, parks and roadways.
The General Fund Budget includes $13,887,175 in estimated revenues and $15,854,949 in proposed expenditures, including the budgeting of the $2 million in available fund balance for one-time uses. Revenues are approximately $412,000 more than projections for Fiscal Year 2013-2014; however, the increases in estimated property taxes, franchise fees and interfund charges for services are offset by the loss of the Successor Agency administrative allowance and a more conservative estimate of building permit revenues. Operating expenditures (excluding Fiscal Year 2013-2014 one-time expenditures for economic development projects and the one-time uses of fund balance proposed for Fiscal Year 2014-15) are approximately $446,000 more than those currently projected for Fiscal Year 2013-2014. Increases in Police, Code Enforcement, and General Fund contributions to augment roadway maintenance funding are offset in part by reduced contributions to the Vehicle & Equipment Replacement Fund and reductions in the Public Works and Building departments, resulting from this current year’s restructuring.
Available Fund Balance is expected to be approximately $4.7 million at June 30, 2014, which is 34% of Fiscal Year 2014-2015 proposed expenditures and approximately $2 million higher than the targeted reserve level established in the City’s policies. As mentioned above, the Recommended Budget includes appropriation of the $2 million excess for one-time uses.
To ensure longer-term sustainability, development of the Budget continues to incorporate the presentation and analysis of the City’s 10 Year Plan. As noted in the Plan, the Budget has been prepared to ensure recurring revenues remain in excess of recurring expenditures. To accomplish this and meet the City’s highest priorities, allocations to the City’s Vehicle & Equipment Replacement Reserve have been reduced, and annual allocations to capital projects for roadway maintenance have been increased. In addition, in order to accommodate the increase in contract police services costs and to remain balanced, the 10-Year Plan includes changing the rate at which we expect to increase police staffing, from one officer every two years to one officer every three years.
TRANSFERS
In pre-recession years, the Budget included larger recurring transfers for road maintenance and for the Main Street Fund. This year’s Recommended Budget includes reduced transfers for what is now the sixth year – although for the first time since the recession, the Budget contains a more significant amount towards restoration. In addition, it contains the first allocation to the Roadway Maintenance Reserve Fund established this past year. The Recommended Budget includes the following transfers:
- $100,000 to the General Capital Projects Fund for road maintenance,
- $100,000 to the Main Street Fund to beautify and improve Main Street, and
- $75,000 to the Street Maintenance Reserve Fund.
ONE-TIME USES OF FUND BALANCE
While the City has not yet returned to “full recovery” from the recession, the need to protect against further near term economic setbacks has lessened; and with that in mind, the City Council discussed the use of up to $2 million of available fund balance at the recent budget work session. This $2 million is the amount of projected available fund balance at the beginning of the year that exceeds the City’s targeted level of 20% of budgeted expenditures for the year. Following the work session discussion, we have added appropriations for the following items to the Recommended Budget:
Roads:
Pavement Management Program Addition – $550,000
Main Street Landscape Median Upgrades – $125,000
Safety
Parks Security Cameras – $70,000
Security Cameras at Intersections – $28,000
Economic Development
Facade Improvement Revolving Loan Program – $275,000
Main Street Visioning Concept – $80,000
Hwy 160 Entry Sign and Landscaping – $150,000
Special Projects – $25,000
Public Outreach and Engagement
Citizen Academy – $12,000
Downtown Events – $60,000
Senior Center ADA Improvements – $15,000
Library Site and Elevation Drawings – $15,000
Long-Term Land Use Planning Projects
General Plan Scoping Project – $20,000
Housing Element Update CEQA – $30,000
Ag Conservation & Vineyard Preservation Program – $17,500
Burrough’s/City Property Entitlements – $90,000
Items to Enhance/Improve the Efficiency of City Services
Agenda Management Software – $ 9,000
CAD & GIS Mapping Software and Map Updates – $ 13,000
Grant Research & Writing Consultancy – $ 48,000
Other Set Asides
Employee One-Time Compensation – $17,500
Transition Costs of PD from SO (if decided) – $350,000
Total One-Time Fund Balance Items – $2,000,000.
The appropriation of this $2 million of available fund balance now results in a projected General Fund reserve of 20% at June 30, 2015, instead of what would have been 34%.
PROPOSED NEW FINANCIAL POLICY
As in prior years, Staff has reviewed the City’s existing Comprehensive Statement of Financial Policies to determine if any updates are necessary and/or desirable. ln the past, a policy was established that for all special purpose funds, the budget would include appropriations of the projected available but otherwise unassigned balances. The Preliminary Budget included a proposed addition to extend a similar policy to the Capital Asset Lifecycle Replacement Reserves in each Lighting and Landscaping District. The new policy stated that 25% of the available replacement reserve balance, up to a maximum of $100,000, would be budgeted in a new “unassigned replacement reserve balance” account. The use of these funds would, like the other unassigned balances, require City Manager approval. Having received no objections this proposal at the budget work session, the policy proposal and proposed appropriations for FY 2014-2015 are included in the Recommended Budget.
GOALS AND OBJECTIVES FOR FISCAL YEAR 2014-2015
The Strategic Plan for 2014-2016 includes an extensive list of City goals and objectives with the following areas of focus:
- Business and Job Growth
- Planned, Quality Growth
- Community Infrastructure and Traffic Safety
- Downtown & Main Street Revitalization and Enhancement
- Public Safety
- Parks, Streetscapes and Recreational Opportunities
- Financial Stability and Sustainability
- Community Outreach, Communication and Participation
- Political Leadership and Stability
- Operational Excellence
The Proposed Budget reflects allocations to the City Council’s existing priorities, including public safety, infrastructure maintenance, economic development, and code enforcement. In addition, the following are some of the more significant goals and objectives for Fiscal Year 2014-2015:
- Continue to implement the City’s Economic Development Work Plan
- Expand Code Enforcement activities; begin inventorying the City’s major eyesores and prioritize them for abatement.
- Complete construction of ongoing capital projects, including:
– The Laurel Road widening project.
– Construction of the Civic Center Park Amphitheatre project
– The Raye Avenue improvement project.
– The East Cypress Widening Extension in coordination with Brookfield Homes.
– Planned roadway maintenance projects, including the major Main Street resurfacing project from Bridgehead to Big Break, and pavement rehabilitation projects at Cypress, Big Break and Rose A venue. - Complete the State-mandated Housing Element update
- Complete the Long-Term Police Services Delivery Plan project
- Obtain a Finding of Completion from the State so that the Successor Agency can move forward with the winding down of the Agency’s affairs; and prepare a Long Term Property Management and Disposition Plan for submittal to the Department of Finance for their approval.
LANDSCAPE MAINTENANCE CHALLENGE UPDATE
We continue to face the challenge of better ensuring the funding of our Lighting and Landscaping District maintenance costs. Current economic conditions still do not support additional assessments or taxes, and Staff now manages many of the funds simply to live within their means.
Staff has recently expanded the Asset Lifecycle Replacement Program to include reserving for the City’s tree pruning program (scheduled every 7 years), and the replacement of streetscapes (provided for on a 20 year cycle) in all of the landscaping funds. While this greatly increases the amount of reserves identified as needed over time, the costs are inevitable, and this change better accounts for the funding needed to maintain these assets effectively over the long-term.
Unfortunately, it also points out that many of the older landscaping zones are not sustainable over the long run. Until times are better, we will continue to do the best we can with the funds available, though it will be something we will have to address more aggressively in the future. More than 75% of the zones have assessments established and approved by the County prior to the City’s incorporation 15 years ago, that remain at their original levels because they include no cost of living/inflation factor.
CAPITAL PROJECTS
Presented separately is the detailed Proposed Capital Improvement Program (CIP) with new funds totaling $5.8 million. The Preliminary Budget proposed a total $4.6 million, almost all of which were directed towards infrastructure maintenance. New construction and improvement projects included:
- Construction of the Civic Center Park Amphitheater project, and
- The East Cypress Widening Extension in coordination with Brookfield Homes.
At the Council’s direction, the Recommended Budget includes the following additional $975,000 in projects making use of one-time General Fund available fund balance:
- $550,000 for the City’s Pavement Management Program
- $125,000 for Main Street Landscape Median Upgrades,
- $70,000 for the addition of parks security cameras,
- $80,000 for development of a Main Street Visioning Concepts Design, and
- $150,000 for the Highway 160 Entry Sign and Landscaping project.
CONCLUSION
Development of this year’s Budget has been an up and down process, with great initial optimism regarding new revenues from the ongoing economic recovery, followed by the difficult news of greater than expected police services contract costs, and the State’s denial of the Successor Agency’s administrative allowance.
Along with the accommodations necessary to adjust to these developments, the Recommended Budget maintains core service levels and allocates additional funds to the City’s highest priorities.
We thank you for your support and leadership in guiding Oakley to be the best it can be today and ensure it remains well positioned to shine in the years to come.
Respectfully submitted,
Bryan H. Montgomery
City Manager
